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Share Name | Share Symbol | Market | Type |
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White River Capital | AMEX:RVR | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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White River Capital, Inc.
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6051 El Tordo, P.O. Box 9876
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Rancho Santa Fe, California 92067
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Attention: Martin J. Szumski
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Chief Financial Officer
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(858) 997-6740
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Notice of Special Meeting of Shareholders | ||
To Be Held on February 11, 2013
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1.
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Merger Agreement Proposal.
To approve and adopt the Agreement and Plan of Merger dated as of November 15, 2012, by and among Coastal Credit Holdings, Inc. (“
Parent
”), Coastal Credit Merger Sub, Inc., a wholly-owned subsidiary of Parent (“
Merger Sub
”), and White River Capital, Inc. (“
White River
”), pursuant to which Merger Sub will be merged with and into White River, with White River surviving the merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are affiliated entities of Parthenon Capital Partners, a San Francisco and Boston based private equity firm.
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2.
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Shareholder Advisory (Non-Binding) Vote on Merger-Related Compensation.
To consider and approve, on a non-binding advisory basis, the compensation that may or will become payable to the named executive officers of White River in connection with the merger.
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3.
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Adjournment.
To approve the adjournment of the special meeting, if necessary, to permit the solicitation of additional proxies in the event there are not sufficient votes, in person or by proxy, to approve any of the above proposals.
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4.
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Other Matters.
To transact any other business as may properly come before the special meeting or any adjournments of the special meeting. The board of directors is not aware of any other business to come before the special meeting.
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By Order of the Board of Directors
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Martin J. Szumski
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Chief Financial Officer and Senior Vice President
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Rancho Santa Fe, California
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January 11, 2013
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TABLE OF CONTENTS
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Page
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SUMMARY
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1
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Parties to the Merger
|
1
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The Merger
|
2
|
The Special Meeting
|
2
|
Merger Consideration
|
2
|
Adjustment to Purchase Price
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3
|
Recommendation of White River’s Board of Directors; White River’s Reasons for the Merger
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3
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Opinion of White River’s Financial Advisor
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4
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Material U.S. Federal Income Tax Consequences of the Merger
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4
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Regulatory Approvals
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4
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Dissenters’ or Appraisal Rights
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5
|
Interests of Certain White River Directors and Executive Officers in the Merger
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5
|
Restrictions on Solicitations of Other Offers
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5
|
Conditions to Completion of the Merger
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5
|
Financing of the Merger
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6
|
Limited Guaranty
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6
|
Termination of the Merger Agreement
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6
|
Termination Fees and Reimbursement of Expenses
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7
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Additional Information
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8
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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE WHITE RIVER SPECIAL MEETING
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9
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CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION
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12
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THE SPECIAL MEETING OF WHITE RIVER’S SHAREHOLDERS
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14
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Date, Time, and Place
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14
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Purpose of the Special Meeting
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14
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Recommendation of White River’s Board of Directors
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14
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Record Date and Voting; Quorum
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14
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Vote Required
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15
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Voting Procedures
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15
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Other Business
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16
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Revocation of Proxies
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17
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Solicitation of Proxies; Expenses
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17
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Assistance
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17
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
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18
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PROPOSAL 1 – THE MERGER
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21
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General
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21
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Background of the Merger
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21
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White River’s Reasons for the Merger and Recommendation of the Board of Directors
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31
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Negotiations, Transactions, or Material Contacts
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33
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Opinion of the Financial Advisor to White River’s Board of Directors
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33
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Certain Projected Financial Information Related to Coastal Credit
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41
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Financing of the Merger
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43
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Limited Guaranty
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44
|
Interests of Certain White River Directors and Executive Officers in the Merger
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45
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Dividends and Distributions
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47
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Regulatory Approvals
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47
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Material U.S. Federal Income Tax Consequences of the Merger
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48
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Delisting and Deregistration of White River’s Common Stock
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50
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Dissenters’ or Appraisal Rights
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50
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Page
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EXPLANATORY NOTE REGARDING THE MERGER AGREEMENT
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51
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THE MERGER AGREEMENT
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51
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The Merger
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51
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Effective Time and Completion of the Merger
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51
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Merger Consideration
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52
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Adjustment to Purchase Price
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52
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Treatment of Performance Shares and Equity Incentive Plans
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55
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Payment Procedures
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55
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Representations and Warranties
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56
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Material Adverse Effect Definition
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58
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Conduct of Business Prior to Closing
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58
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Shareholders Meeting
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60
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Restrictions on Solicitations of Other Offers
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60
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Termination in Connection with a Superior Proposal
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61
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Agreement to Use Commercially Reasonable Efforts
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63
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Employee Benefit Matters
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64
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Indemnification and Insurance
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65
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Other Covenants
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65
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Conditions to Completion of the Merger
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65
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Termination of the Merger Agreement
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67
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Termination Fees and Reimbursement of Expenses
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69
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Expenses
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70
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Remedies
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70
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Amendment of the Merger Agreement
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70
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Extension of Time; Waiver
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70
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Governing Law
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70
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PROPOSAL 2 – NON-BINDING ADVISORY VOTE ON EXECUTIVE OFFICER MERGER-RELATED COMPENSATION ARRANGEMENTS
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71
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PROPOSAL 3 – ADJOURNMENT OF THE SPECIAL MEETING
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73
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MARKET PRICE AND DIVIDEND INFORMATION AND RELATED SHAREHOLDER MATTERS
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74
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OTHER MATTERS
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75
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SHAREHOLDER PROPOSALS FOR NEXT YEAR
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75
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WHERE YOU CAN FIND MORE INFORMATION
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75
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APPENDICES
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A
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Agreement and Plan of Merger dated November 15, 2012 by and among Coastal Credit Holdings, Inc., Coastal Credit Merger Sub, Inc., and White River Capital, Inc.
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B
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Limited Guaranty dated November 15, 2012 by Parthenon Investors IV, L.P. in favor of White River Capital, Inc.
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C
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Opinion of Milestone Advisors, LLC
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White River Capital, Inc.
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6051 El Tordo, P.O. Box 9876
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Rancho Santa Fe, California 92067
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(858) 997-6740
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Coastal Credit Holdings, Inc.
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Four Embarcadero Center, Suite 3610
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San Francisco, California 94111
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(415) 913-3900
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Coastal Credit Merger Sub, Inc.
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Four Embarcadero Center, Suite 3610
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San Francisco, California 94111
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(415) 913-3900
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·
|
each share of common stock of White River, without par value (the “
Common Stock
”), issued and outstanding immediately prior to the effective time of the merger (other than treasury shares and any shares owned by Parent, Merger Sub, or any wholly owned subsidiaries of Parent or White River (collectively, “
Excluded Shares
”)), as well as all outstanding and unvested restricted shares and performance shares of White River as of such time (“
Performance Shares
,” and, collectively with the Common Stock, the “
White River Common Stock
”), will convert into the right to receive an amount of cash, without interest and less any applicable withholding taxes, determined by dividing the aggregate purchase price to be paid by Merger Sub in the merger, as may be adjusted as described below, by the number of fully diluted shares of White River Common Stock as of the effective time of the merger (other than any Excluded Shares), which we refer to as the “
merger consideration
.” Before adjustments, the aggregate purchase price under the merger agreement is $79,500,000, which, based on 3,625,892 shares of White River Common Stock expected to be issued and outstanding at closing on a fully diluted basis, equates to a per share merger consideration of $21.93 per share; and
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·
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all shares of White River Common Stock so converted will, upon the completion of the merger, no longer be outstanding and will be automatically cancelled and shall cease to exist, and each holder of White River Common Stock shall cease to have any rights with respect thereto, except the right to receive the merger consideration upon surrender of the certificate(s) representing such holder’s shares of White River Common Stock (if such shares are certificated).
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·
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the merger is not closed by March 31, 2013, with certain exceptions; or
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·
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approval of the merger agreement by White River’s shareholders is not obtained, with certain exceptions.
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·
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at any time prior to the special meeting, White River concurrently enters into an acquisition agreement with respect to a competing acquisition proposal which the board of directors determines in good faith is a superior proposal to the merger agreement and that the failure to enter into such competing proposal would reasonably likely violate the directors’ fiduciary obligations under applicable law; provided that (i) White River provides prior written notice to Merger Sub of its intention to accept the superior proposal, (ii) within three business days thereafter, Merger Sub, Parent, and White River do not negotiate an adjustment to the merger agreement so that the third-party acquisition proposal is no longer a superior proposal to the merger agreement, and (iii) White River pays a termination fee of $3,975,000 to Merger Sub. If Merger Sub notifies White River in writing prior to the expiration of the three-day period described above that it shall modify its offered terms so that the competing acquisition proposal ceases to be a superior proposal, then White River shall not be permitted to enter into an alternative acquisition agreement, or permit the board to change its recommendation in favor of the merger agreement, with respect to the competing acquisition proposal. White River will have 48 hours to evaluate Merger Sub’s modified terms. However, in the event our board determines in good faith, after consultation with its financial advisor and upon advice from outside legal counsel, that consummation of Merger Sub’s modified transaction terms instead of the competing acquisition proposal would be reasonably likely to violate its fiduciary obligations under applicable law and not be in the best interests of White River, in accordance with the standards of conduct applicable to directors under the Indiana Business Corporation Law (“
IBCL
”), White River will be permitted to terminate the merger agreement in order to execute an alternative acquisition agreement with respect to the superior proposal; or
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·
|
at any time prior to the effective time of the merger, whether before or after shareholder approval is received, there has been a breach of any representation, warranty, covenant, or agreement made by Parent or Merger Sub in the merger agreement such that the closing condition regarding the accuracy of Parent’s and Merger Sub’s representations and warranties or performance of its covenants and agreements under the merger agreement would not be satisfied, and such breach or condition is not cured within the earlier of 30 days after written notice of such breach is given by White River to Parent or March 31, 2013.
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·
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(i) the board of directors of White River makes a “company adverse recommendation change” (as defined in the merger agreement) to its shareholders with respect to the merger, (ii) White River’s board of directors fails to reaffirm the recommendation to its shareholders in favor of the merger within five business days after Parent has requested in writing that it do so and the board continues to fail to reaffirm the recommendation as of the date the merger agreement is terminated, or (iii) any third party shall have commenced a tender or exchange offer or other transaction constituting or potentially constituting an acquisition proposal and White River shall not have sent to its shareholders pursuant to Rule 14e-2 under the Exchange Act, within 10 business days after such tender or exchange offer is first published, sent, or given, a statement disclosing that White River recommends rejection of such tender offer or exchange offer;
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·
|
White River breaches any of its covenants regarding non-solicitation, competing acquisition proposals, or the holding of the special meeting and solicitation of proxies in connection with the merger agreement (other than an immaterial breach not intended to result in a third-party acquisition proposal); or
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·
|
at any time prior to the effective time of the merger, whether before or after shareholder approval is received, there has been a breach of any representation, warranty, covenant, or agreement made by White River in the merger agreement such that the closing condition regarding the accuracy of White River’s representations and warranties or performance of its covenants and agreements under the merger agreement would not be satisfied, and such breach or condition is not cured within the earlier of 30 days after written notice of such breach is given by Parent to White River or March 31, 2013.
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·
|
any governmental body shall have issued an order or taken other action permanently enjoining, restraining, or prohibiting the merger, and such order or action shall have become final and nonappealable; provided that the party seeking to terminate the agreement in this regard shall not have initiated such proceeding or taken any action in support of such proceeding and such party shall have used its reasonable best efforts to prevent and oppose such order or action.
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Q:
|
What am I voting on?
|
A:
|
White River, Parent, and Merger Sub have entered into a merger agreement pursuant to which Merger Sub will merge with and into White River, with White River surviving the merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are affiliated entities of Parthenon. You are being asked to consider and vote upon the proposal to approve the merger agreement, as well as the proposal to approve, on a non-binding advisory basis, the compensation payable to the named executive officers of White River in connection with the merger.
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Q:
|
What matters will be voted on at the special meeting?
|
A:
|
You will be asked to consider and vote upon the following proposals at the special meeting:
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·
|
Adoption of the merger agreement;
|
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·
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A non-binding advisory proposal to approve the compensation that may or will become payable to the named executive officers of White River in connection with the merger; and
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·
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A proposal to adjourn the special meeting, if necessary, to permit the solicitation of additional proxies in the event there are not sufficient votes, in person or by proxy, to approve any of the above proposals.
|
Q:
|
As a shareholder of White River, what will I receive in the merger?
|
A:
|
If the merger is completed, for each share of White River Common Stock that you own immediately prior to the effective time of the merger, you will be entitled to receive an amount of cash, without interest and less any applicable withholding taxes, determined by dividing the aggregate purchase price to be paid by Merger Sub in the merger, as may be adjusted as described in this proxy statement, by the number of fully diluted shares of White River Common Stock as of the effective time of the merger (excluding any Excluded Shares). Before adjustments, the aggregate purchase price under the merger agreement is $79,500,000, which, based on 3,625,892 shares of White River Common Stock expected to be issued and outstanding at closing on a fully diluted basis, equates to a per share merger consideration of $21.93 per share. See “
Proposal 1 – The Merger – Material U.S. Federal Income Tax Consequences of the Merger
” beginning on page 48 for a more detailed description of the U.S. federal tax consequences of the merger. You should consult your own tax advisor for a full understanding of how the merger will affect your federal, state, local, and/or non-U.S. taxes.
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Q:
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What will happen in the merger?
|
A:
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In the merger, Merger Sub will be merged into White River and White River will continue as the surviving corporation and become a wholly owned subsidiary of Parent. As a result of the merger, the Common Stock of White River will no longer be publicly traded. In addition, the Common Stock of White River will be delisted from the NYSE MKT and deregistered under the Exchange Act, and White River will no longer be required to file reports with the SEC.
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Q:
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What is the required vote to approve and adopt the merger agreement proposal?
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A:
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The holders of at least a majority of the outstanding shares of Common Stock as of January 7, 2013, the record date for the special meeting, must vote to approve the merger agreement in order for the merger to be completed. Abstentions from voting and “broker non-votes” are not considered affirmative votes and, therefore, will have the same effect as a vote “against” the merger. As of the record date of the special meeting, White River’s executive officers and directors and their respective affiliates, as a group, beneficially owned or had the power to direct the voting of approximately 20.1% of the common stock of White River.
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Q:
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What is the required vote to approve the non-binding compensation proposal and the proposal to adjourn the special meeting, if necessary or appropriate?
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A:
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The approval of the non-binding compensation proposal and the proposal to adjourn the special meeting each requires more votes to be cast by White River’s shareholders in favor of the proposal than are cast against it. Abstentions and “broker non-votes” will have no effect on the outcomes of the proposals.
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Q:
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Why am I being asked to cast an advisory (non-binding) vote to approve the compensation payable to certain White River officers in connection with the merger?
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A:
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The SEC, in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, recently adopted rules that require White River to seek an advisory (non-binding) vote with respect to certain payments that will or may be made to White River’s named executive officers in connection with the merger.
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Q:
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What will happen if White River’s shareholders do not approve such compensation at the special meeting?
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A:
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Approval of the compensation payable in connection with the merger is not a condition to completion of the merger. The vote with respect to such compensation is an advisory vote and will not be binding on White River (or the surviving company that results from the merger) regardless of whether the merger agreement is approved. Accordingly, as the compensation to be paid to the White River executives in connection with the merger is contractual, such compensation will or may be payable if the merger is completed regardless of the outcome of the advisory vote.
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Q:
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What does the White River board of directors recommend?
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A:
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The board of directors of White River recommends that White River’s shareholders vote “FOR” the approval of the merger agreement, “FOR” the approval of the non-binding advisory resolution regarding the merger-related compensation payable to our named executive officers, and “FOR” any proposal of the White River board of directors to adjourn the special meeting, if necessary, to solicit additional proxies.
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Q:
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Do I have dissenters’ rights with respect to the merger?
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A:
|
Because the Common Stock of White River is traded on the NYSE MKT, White River’s shareholders do
not
have dissenters’ rights of appraisal under the Indiana Business Corporation Law.
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Q:
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What will happen if the merger is not completed?
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A:
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If the merger agreement is not adopted by our shareholders or if the merger is not completed for any other reason, our shareholders will not receive any payment for their shares of White River Common Stock pursuant to the merger agreement. Instead, we will remain a public company and our Common Stock will continue to be registered under the Exchange Act and listed and traded on the NYSE MKT. Under certain circumstances specified in the merger agreement, either we or Parent may be required to pay the other party a termination fee and/or an expense fee, depending on the nature and timing of the termination. See “
The Merger Agreement – Termination Fees and Reimbursement of Expenses
” beginning on page 69 for additional information.
|
Q:
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If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me?
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A:
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If you hold White River shares in street name with a broker, your broker will not be able to vote your shares without instructions from you on the proposal to approve the merger agreement proposal or the non-binding advisory resolution regarding the merger-related compensation payable to our named executive officers. You should follow the directions provided by your broker on how to vote your shares.
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Q:
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When do you expect the merger to occur?
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A:
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We expect to complete the merger promptly after White River’s shareholders approve the merger agreement at the special meeting and after the receipt of all requisite governmental and regulatory approvals, the expiration of applicable regulatory waiting periods, and the satisfaction or waiver of all other conditions to the merger. We currently expect this to occur in the first quarter of 2013, although delays may occur.
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Q:
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When and where is the White River special shareholders’ meeting?
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A:
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The special meeting will be held on Monday, February 11, 2013, at 9:00 a.m., Pacific time, at The Inn at Rancho Santa Fe, 5951 Linea Del Cielo, Rancho Santa Fe, California 92067.
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Q:
|
Who is entitled to vote at the special meeting?
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A:
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Holders of record of Common Stock at the close of business on January 7, 2013, which is the date White River’s board of directors has fixed as the record date for the special meeting, are entitled to vote at the special meeting.
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Q:
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What do I need to do now?
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A:
|
Please mail your signed proxy card in the enclosed return envelope or submit your vote by telephone or the Internet, as soon as possible, so your shares will be represented at the special meeting. To be sure that your vote is counted, please vote now even if you plan to attend the special meeting in person. Your proxy card will instruct the persons named on the proxy card to vote your shares at the special meeting as you direct. If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted “FOR” the approval of the merger agreement, “FOR” the non-binding advisory resolution regarding the merger-related compensation payable to our named executive officers, and “FOR” any proposal of the White River board of directors to adjourn the special meeting, if necessary, to solicit additional proxies.
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Q:
|
May I change my vote after I have mailed my signed proxy card?
|
A:
|
Yes. You may change your vote at any time before your proxy is voted at the special meeting. You may change your vote by submitting a new proxy with a later date or by voting in person at the special meeting. Alternatively, you may revoke your proxy altogether by notifying White River’s Corporate Secretary in writing before the special meeting that you have revoked your proxy. See “
The Special Meeting of White River’s Shareholders – Revocation of Proxies
” on page 17 below.
|
Q:
|
May I vote in person?
|
A:
|
Yes. You may attend the special meeting and vote your shares in person rather than completing, signing, and mailing a proxy card.
|
Q:
|
Why is it important for me to vote?
|
A:
|
We cannot complete the merger without the holders of at least a majority of the outstanding shares of Common Stock as of the record date voting in favor of the merger agreement.
If you do not vote or fail to give instructions to your broker or bank to vote on your behalf, it will have the same effect as a vote against the merger.
|
Q:
|
Do I need to do anything right now with my White River share certificates?
|
A:
|
No. As soon as practicable after the completion of the merger, you will receive a letter of transmittal describing how you may exchange your shares for the merger consideration (or, in the case of holders of Performance Shares, you will receive an acknowledgment of the conversion and exchange of the Performance Shares in the merger prior to closing). You must then send your completed letter of transmittal to Parent’s paying agent (or, in the case of Performance Shares, send your completed acknowledgment to White River) in order to receive the merger consideration. You should not send your share certificate until you receive the letter of transmittal or acknowledgment, as the case may be. If you own shares of our Common Stock that are held in “street name” by your broker, you will receive instructions from your broker as to how to surrender your “street name” shares and receive cash for those shares following the completion of the merger.
|
Q:
|
Who can help answer my questions?
|
A:
|
If you have more questions about the merger agreement or the merger, you should contact White River Capital, Inc., 6051 El Tordo, P.O. Box 9876, Rancho Santa Fe, California 92067, Attention: Corporate Secretary, (858) 997-6740.
|
Q:
|
Where can I find more information about White River?
|
A:
|
You can find more information about White River from the various sources described under the heading “
Where You Can Find More Information
” beginning on page 75 of this proxy statement.
|
·
|
Local, regional, national, and international economic and financial market conditions and the impact they may have on White River and its customers and their assessment of that impact.
|
·
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Changes in the level of nonperforming assets and charge-offs.
|
·
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Changes in estimates of future cash reserve requirements based upon the periodic review thereof under relevant banking and other regulatory and accounting requirements.
|
·
|
The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate and other policies of the Federal Reserve Board and the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
|
·
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Inflation, interest rate, securities market, and monetary fluctuations.
|
·
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Political instability.
|
·
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Acts of war or terrorism.
|
·
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Substantial increases in the cost of fuel.
|
·
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The timely development and acceptance of new products and services and perceived overall value of these products and services by others.
|
·
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Changes in consumer spending, borrowings, and savings habits.
|
·
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Changes in the financial performance and/or condition of borrowers.
|
·
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Technological changes.
|
·
|
Acquisitions and integration of acquired businesses.
|
·
|
The ability to increase market share and control expenses.
|
·
|
Changes in the competitive environment among consumer finance companies.
|
·
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Illiquidity in the capital markets and its impact on the fair value of assets.
|
·
|
The ability of White River, Coastal Credit, or the surviving corporation to obtain debt financing.
|
·
|
The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which White River and Coastal Credit must comply.
|
·
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The effect of changes in accounting policies and practices and auditing requirements, as may be adopted by the regulatory agencies, including the SEC, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other regulatory entities.
|
·
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Changes in the organization, compensation, and benefit plans of White River, Coastal Credit, or both.
|
·
|
The costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquires and the results of regulatory examinations or reviews.
|
·
|
Greater than expected costs or difficulties related to the integration of new products and lines of business.
|
·
|
The timing and terms of regulatory review and approval in connection with the merger.
|
·
|
Unforeseen actions by third parties that may delay the merger.
|
·
|
The amount of expenses to be incurred by White River and Coastal Credit in connection with the merger or otherwise prior to the consummation of the merger and final determination of the merger consideration.
|
·
|
to consider and vote on the adoption of the merger agreement;
|
·
|
to consider and vote on a non-binding advisory proposal to approve the compensation that may or will become payable to White River’s named executive officers in connection with the merger; and
|
·
|
to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.
|
·
|
“
FOR
” approval of the adoption of the merger agreement;
|
·
|
“
FOR
” approval of the non-binding advisory proposal to approve the compensation that may or will become payable to White River’s named executive officers in connection with the merger; and
|
·
|
“
FOR
” approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.
|
·
|
“
FOR
” approval of the proposal to adopt the merger agreement;
|
·
|
“
FOR
” approval of the non-binding advisory proposal to approve the compensation that may or will become payable to White River’s named executive officers in connection with the merger; and
|
·
|
“
FOR
” approval of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.
|
·
|
notifying our Corporate Secretary in writing at 6051 El Tordo, P.O. Box 9876, Rancho Santa Fe, California 92067, that you wish to revoke your proxy;
|
·
|
submitting a later dated proxy card; or
|
·
|
attending the special meeting and voting in person.
|
·
|
each of our current directors;
|
·
|
our Chief Executive Officer, and each of our two most highly compensated executive officers serving at the end of 2012 (other than our Chief Executive Officer) whose total compensation during 2012 exceeded $100,000 (together as a group, the “Named Executive Officers”);
|
·
|
all of our directors and executive officers as a group; and
|
·
|
each other person known by us to beneficially own more than five percent of the outstanding shares of our Common Stock.
|
Amount and Nature of Beneficial Ownership
as of January 7, 2013
|
||||||||
Name or Number
of Persons in Group
|
Sole Voting and/or Investment Power
|
Shared Voting and/or Investment Power
|
Total
|
Percent of Class
(1)
|
||||
Directors Who are Not
Named Executive Officers
|
||||||||
Thomas C. Heagy
Director
|
9,732
(2)
|
0
|
9,732
|
*
|
||||
Daniel W. Porter
Director
|
9,971
(2)
|
0
|
9,971
|
*
|
||||
John W. Rose
Director
|
136,862
(2), (3)
|
35,000
(4)
|
171,862
|
4.8%
|
||||
Richard D. Waterfield
Director
7221 Engle Road, Suite 250
Fort Wayne, Indiana 46804
|
10,386
(2)
|
218,862
(5)
|
229,248
|
6.5%
|
||||
Named Executive Officers
|
||||||||
John M. Eggemeyer, III
Chairman and Chief Executive Officer; Director
|
152,706
(2), (6)
|
310
(7)
|
153,016
|
4.2%
|
||||
William E. McKnight
President and Chief Executive Officer – Coastal Credit, LLC;
Director
3852 Virginia Beach Blvd.
Virginia Beach, Virginia 23452
|
195,749
(2)
|
0
|
195,749
|
5.5%
|
||||
Martin J. Szumski
Chief Financial Officer and Senior Vice President
|
11,500
(8)
|
0
|
11,500
|
*
|
||||
All Directors and Executive Officers as a group (7 persons)
|
526,906
|
254,172
|
781,078
|
21.6%
|
||||
Other 5% Beneficial Owners
|
||||||||
Franklin Mutual Advisors, L.L.C.
(9)
101 John F. Kennedy Parkway
Short Hills, New Jersey 07078
|
722,550
|
0
|
722,550
|
20.3%
|
(1)
|
For each individual or group disclosed in the table above, the figures in this column are based on 3,553,158 shares of our Common Stock issued and outstanding as of January 7, 2013, plus the number of shares of Common Stock each such individual or group has the right to acquire on or within 60 days after January 7, 2013 (including 67,733 Performance Shares over which such individual or group may be deemed to have investment power as described below).
|
(2)
|
Includes 909 shares of restricted common stock held by each director pursuant to a one-time grant on January 4, 2013 under White River’s 2005 Stock Incentive Plan. No director has voting rights with respect to any unvested restricted shares, but he may be deemed to have investment power over the shares. The restricted shares will vest in one installment, in full, upon the earlier to occur of: (i) the closing date of the merger; or (ii) the second business day following the “Determination Date” as defined in the White River Capital, Inc. Directors Stock Compensation Plan, amended as of May 6, 2010.
|
(3)
|
Includes 135,953 shares held in a margin account.
|
(4)
|
All of the shares are held of record by the Rose/Harnett Family Foundation with the Shenango Valley Foundation, an affiliate of the Community Foundation of Western PA and Eastern OH (the “
Foundation
”). The Foundation has agreed to cause such shares to be voted at any meeting of the shareholders of White River occurring in the six months after December 31, 2012 in the manner consistent with the recommendation of White River’s board of directors. Accordingly, the reported shares held by the Foundation may be regarded as being beneficially owned by Mr. Rose.
|
(5)
|
Includes 217,357 shares of Common Stock held in a limited liability company of which Mr. Waterfield is a member. Mr. Waterfield disclaims beneficial ownership of the portion of the reported shares in excess of his percentage economic interest in the limited liability company; also includes 1,505 shares of Common Stock held of record by Waterfield Foundation, Inc., of which Mr. Waterfield is an officer and director. Mr. Waterfield disclaims beneficial ownership of the shares held of record by Waterfield Foundation, Inc.
|
(6)
|
Includes (i) a one-time grant of 50,000 performance shares made to Mr. Eggemeyer on October 26, 2011 under White River’s 2005 Stock Incentive Plan; and (ii) 8,945 performance shares granted to Mr. Eggemeyer pursuant to a Stock Award Agreement dated October 26, 2011 between White River and Mr. Eggemeyer under the 2005 Stock Incentive Plan, in respect of White River’s declaration of a one-time special cash dividend of $4.00 per share payable on December 22, 2011. Mr. Eggemeyer does not have voting rights with respect to these 58,945 performance shares, but he may be deemed to have investment power over the shares. Subject to possible earlier forfeiture under certain circumstances, upon the occurrence of a “Vesting Event,” as defined in the 2005 Stock Incentive Plan, which includes a change in control of White River, Mr. Eggemeyer will become 100% vested in the performance shares that are unvested and have not been forfeited on the date of the Vesting Event. The merger will be a “Vesting Event” under this award.
|
(7)
|
All of the shares are held of record by Eggemeyer Advisory Corp., of which Mr. Eggemeyer is the sole shareholder.
|
(8)
|
Includes 3,334 shares of restricted common stock held by Mr. Szumski pursuant to a one-time grant on March 18, 2011 under White River’s 2005 Stock Incentive Plan. Mr. Szumski does not have voting rights with respect to any unvested restricted shares, but he may be deemed to have investment power over the shares. Under the terms of the grant, the remaining unvested restricted shares are scheduled to vest on December 31, 2013. However, any unvested portion of this award will vest upon the closing of the merger.
|
(9)
|
As reported in a Schedule 13G filed on October 28, 2005.
|
·
|
the business, earnings, operations, financial condition, management, prospects, and capital levels of White River, and information regarding the management, investment history, and available capital resources of Parthenon;
|
·
|
the current and prospective business and economic environments in which White River and Coastal Credit operate, including challenging national, regional, and local economic conditions, the competitive environment for specialized auto finance companies characterized by intensifying competition from new
entrants into the industry and large financial institutions offering consumer finance products, the regulatory burdens on consumer finance companies, and the uncertainties in the regulatory climate going forward;
|
·
|
the likelihood that acquisition opportunities for White River as a buyer are limited;
|
·
|
benefits afforded by the merger to White River and its shareholders, including, among other benefits, a very high probability of timely consummation of the transaction on terms featuring an all-cash liquidation opportunity for shareholders at a fair value, and strategic alignment of Coastal Credit with a business partner with strong financial and management resources which is expected to foster continued stability and growth of Coastal Credit’s business;
|
·
|
the belief of White River’s board that, after consideration of potential alternatives and extensive efforts to investigate interest among other potential bidders, the merger is expected to provide optimal benefits to White River and its shareholders relative to the range of possible alternatives, including continuing to operate White River and Coastal Credit on a stand-alone basis or pursuing a transaction with a different bidder;
|
·
|
White River’s management’s views on Coastal Credit’s expected full year 2012 performance and Coastal Credit’s long-term financial projections, and the board’s knowledge and understanding of the business, operations, management, financial condition, assets, liabilities, strategy, earnings, the changing nature of the industry in which Coastal Credit competes, and the prospects of Coastal Credit, including the prospects of Coastal Credit as an independent entity;
|
·
|
Parthenon’s access to managerial resources relative to that of Coastal Credit which, as a result, should improve Coastal Credit’s access to depth of management expertise;
|
·
|
the benefits of being part of a larger and more diversified organization and the risks of continuing to be an independent company, given White River’s limited financial resources and access to capital relative to Parthenon;
|
·
|
management’s risk-weighted assessment of various strategic alternatives available to White River indicating that a business combination with an organization such as Parthenon compared favorably to other alternatives;
|
·
|
the perceived compatibility of the business philosophies of White River and Parthenon, which the White River board believed would facilitate the continued growth of Coastal Credit and a favorable and stable environment for Coastal Credit’s personnel;
|
·
|
the financial and other terms and conditions of the merger agreement, including the fact that the per share merger consideration (assuming no adjustments) represents approximately 104.4% of White River’s tangible book value as of September 30, 2012, and provisions providing for payment of a $3,975,000 termination fee or $1,300,000 expense fee if the merger agreement is terminated under certain circumstances;
|
·
|
that the form of consideration to be paid to holders of White River Common Stock is cash, which will provide certainty of value and immediate liquidity to the holders of White River Common Stock;
|
·
|
the likelihood the merger would be completed, based on, among other things, Parthenon’s financial resources and the related absence of any significant financing uncertainty in connection with the merger, and the likelihood and anticipated timing of completing the merger in light of the scope of the closing conditions, including required clearances under applicable state finance company licensing laws and federal antitrust laws;
|
·
|
Parthenon’s long-term growth strategy for Coastal Credit’s business;
|
·
|
the oral opinion, which was later confirmed in writing, delivered by Milestone that the merger consideration to be received by White River’s shareholders pursuant to the merger agreement is fair, from a financial standpoint, to the shareholders;
|
·
|
the prospect that the earnings of the surviving corporation should enable it to continue utilizing the tax benefits of White River’s historical NOLs effectively, even though a change of ownership will occur that might curtail the rate at which the NOLs can be utilized;
|
·
|
the interests of White River’s directors and executive officers in the merger, in addition to their interests generally as shareholders, as described under “
– Interests of Certain White River Directors and Executive Officers in the Merger
;”
|
·
|
the likelihood that the regulatory approvals necessary to complete the transaction would be obtained; and
|
·
|
the effect of the merger on White River’s and Coastal Credit’s employees, customers, and the communities in which they conduct business.
|
·
|
the fact that the all-cash price, while providing certainty of value, will not allow White River’s shareholders to participate in potential appreciation in the value of White River’s or Coastal Credit’s business after the merger;
|
·
|
other conditions to the closing of the transactions contemplated by the merger agreement may not be satisfied;
|
·
|
the restrictions on White River’s ability to solicit or, subject to limited exceptions, engage in discussions or negotiations regarding alternative business combination transactions or other types of specified transactions;
|
·
|
the requirement that White River pay a termination fee of $3,975,000 to accept a superior proposal, which may discourage a competing proposal to acquire White River, which the board understood was a condition to Parent’s and Merger Sub’s willingness to enter into the merger agreement and understood, based on the advice of its financial advisors, was consistent with fees payable in similar transactions and was not so large as to prevent a prospective bidder from making a bid;
|
·
|
the business of Coastal Credit may suffer as a result of uncertainty surrounding the merger and the transactions contemplated by the merger agreement, including the risk that the merger and the transactions contemplated by the merger agreement create potential difficulties in customer relations and employee retention;
|
·
|
the possible occurrence of any event, change, or other circumstance that, if resulting in a White River material adverse effect, could give rise to the termination of the merger agreement;
|
·
|
other risks to consummation of the merger and the transactions contemplated by the merger agreement, including the risk that the merger and the transactions contemplated by the merger agreement will not be consummated within the expected time period;
|
·
|
White River would be required, if the merger is not completed under certain circumstances, to pay a $1,300,000 expense fee, which is intended to reimburse Parent and Merger Sub for their expenses associated with the merger agreement;
|
·
|
that an all-cash transaction will be taxable to certain of White River’s shareholders for U.S. federal income tax purposes; and
|
·
|
that restrictions in the merger agreement on the conduct of White River’s and Coastal Credit’s businesses prior to the consummation of the merger may delay or prevent White River or Coastal Credit from undertaking business opportunities that could arise prior to the consummation of the merger.
|
|
(i)
|
Reviewed certain publicly-available financial statements and other business and financial information of White River;
|
|
(ii)
|
Reviewed certain internal financial statements and other financial data and operating data concerning White River prepared by the management of White River;
|
|
(iii)
|
Reviewed certain financial projections of White River prepared by the management of White River;
|
|
(iv)
|
Discussed the past and current operations, financial condition and prospects of White River with management of White River and the management of its subsidiary Coastal Credit;
|
|
(v)
|
Performed various valuation and financial analyses based on the financial projections of White River prepared by the management of White River, including illustrative discounted cash flow and future terminal value analyses;
|
|
(vi)
|
Reviewed the reported prices, trading activity and trading multiples of White River and other publicly available information of White River;
|
|
(vii)
|
Compared the stock price performance, trading activity and trading multiples of White River to other publicly-traded companies that we deemed generally comparable to White River;
|
|
(viii)
|
Compared the financial performance of White River with that of certain other publicly-traded companies that we believe are generally comparable to White River;
|
|
(ix)
|
Reviewed the financial terms, to the extent publicly available, of certain acquisition transactions that we believe are generally comparable to the merger;
|
|
(x)
|
Reviewed the execution draft of the merger agreement dated November 14, 2012 and certain related documents; and
|
|
(xi)
|
Performed such other analyses and considered such other factors as we have deemed appropriate.
|
·
|
GAAP book value as of September 30, 2012;
|
·
|
Tangible book value as of September 30, 2012;
|
·
|
Adjusted GAAP book value as of September 30, 2012;
|
·
|
Adjusted tangible book value as of September 30, 2012;
|
·
|
Net income for the twelve months ended September 30, 2012; and
|
·
|
Net receivables balance as of September 30, 2012.
|
Financial Multiple Based on $21.93 Cash Per Share Merger Consideration
|
|||
Equity Value / GAAP book value
|
1.04x
|
||
Equity Value / Tangible book value
|
1.04x
|
||
Equity Value / Adjusted GAAP book value
|
1.38x
|
||
Equity Value / Adjusted tangible book value
|
1.38x
|
||
Equity Value / Trailing twelve months net income
|
8.93x
|
||
Equity Value / Net receivables
|
0.64x
|
·
|
the closing market price of White River’s common stock on November 12, 2012 (the “
Reference Date
”); and
|
·
|
the average closing market price per share of White River’s common stock for each of the 20-day and 60-day trading periods ended on the Reference Date.
|
|
Price for Period Ended
on the Reference Date
|
Implied
Premium
|
|||
Closing Price on Reference Date:
|
$22.00
|
-0.3%
|
|||
20-Trading Day Average:
|
$22.67
|
-3.3%
|
|||
60-Trading Day Average:
|
$22.36
|
-1.9%
|
|||
|
Micro-Cap Subprime Auto Finance Companies
|
|
Consumer Portfolio Services, Inc.
|
||
First Investors Financial Services Group, Inc.
|
||
Nicholas Financial, Inc.
|
||
Small-Cap Auto Finance Companies
|
||
America’s Car Mart, Inc.
|
||
Credit Acceptance Corp.
|
Comparable Public Company Trading Multiples
|
|||||
Price /
|
Price / Tangible
|
||||
Micro-Cap Subprime Auto Finance Comparables
|
LTM EPS
|
Book Value
|
|||
Consumer Portfolio Services Inc.
|
20.0x
|
NA
|
|||
First Investors Financial Services Group, Inc. (see note 1)
|
7.5x
|
0.89x
|
|||
Nicholas Financial Inc.
|
6.6x
|
1.00x
|
|||
Small-Cap Auto Finance Comparables
|
|||||
America's Car Mart, Inc.
|
12.6x
|
2.07x
|
|||
Credit Acceptance Corp.
|
10.5x
|
3.50x
|
|||
1: Pricing information for First Investors Financial Services Group, Inc. is as of the final trading day prior to the announcement of the company's acquisition by Aquiline Capital Partners (9/25/2012). |
Summary Comparable Public Company Trading Multiples
|
|||||
Micro-Cap Subprime Auto Finance Comparables
|
Range
|
Median
|
|||
Price / LTM EPS
|
6.6x - 20.0x
|
7.5x
|
|||
Price / Tangible Book Value
|
0.89x - 1.00x
|
0.95x
|
|||
Small-Cap Auto Finance Comparables
|
Range
|
Median
|
|||
Price / LTM EPS
|
10.5x - 12.6x
|
11.5x
|
|||
Price / Tangible Book Value
|
2.07x - 3.50x
|
2.78x
|
|||
All Auto Finance Comparables
|
Range
|
Median
|
|||
Price / LTM EPS
|
6.6x - 20.0x
|
10.5x
|
|||
Price / Tangible Book Value
|
0.89x - 3.50x
|
0.98x
|
White River Implied Valuation
|
|||||||
Implied Equity
|
Implied
|
||||||
Selected Range
|
Value ($M)
|
Price / Share
1
|
|||||
Price / LTM EPS
|
7.5x - 10.0x
|
$66.7 - $89.0
|
$18.41 - $24.54
|
||||
Price / Tangible Book Value
|
0.90x - 1.35x
|
$68.6 - $102.8
|
$18.91 - $28.37
|
||||
Price / Adjusted Tangible Book Value
|
0.90x - 1.35x
|
$51.9 - $77.9
|
$14.32 - $21.48
|
||||
1: Based on fully-diluted share count including the impact of accelerated vesting of restricted shares. |
Selected Precedent Transactions
|
||||
Announcement Date
|
Acquiror |
Target
|
||
9/25/2012
|
Aquiline Capital Partners LLC
|
First Investors Financial Services Group, Inc.
|
||
10/13/2011
|
TCF Financial Corporation
|
Gateway One Lending & Finance, LLC
|
||
12/27/2010
|
Pine Brook Road Partners/Management
|
United PanAm Financial Corp.
|
||
12/20/2010
|
Toronto-Dominion Bank
|
Chrysler Financial Corp.
|
||
7/21/2010
|
General Motors Corporation
|
AmeriCredit Corp.
|
||
6/20/2008
|
Banco Santander, S.A.
|
RoadLoans direct lending division
|
||
12/4/2006
|
AmeriCredit Corp.
|
Long Beach Acceptance Corp.
|
||
9/23/2006
|
Banco Santander Central Hispano, S.A.
|
Drive Financial Services LP
|
||
4/2/2006
|
Cerberus Capital Management, L.P.
|
General Motors Acceptance Corporation
|
||
11/7/2005
|
AmeriCredit Corp.
|
Bay View Acceptance Corporation
|
||
9/12/2005
|
Wachovia Corporation
|
WFS Financial Inc.
|
||
3/9/2005
|
White River Capital, Inc.
|
Coastal Credit, LLC
|
||
9/22/2004
|
Capital One Financial Corporation
|
Onyx Acceptance Corporation
|
||
3/31/2003
|
Consumer Portfolio Services, Inc.
|
TFC Enterprises, Inc.
|
||
11/18/2001
|
Consumer Portfolio Services, Inc.
|
MFN Financial Corp.
|
·
|
The transaction equity purchase price divided by the target’s net income for the four full fiscal quarters immediately preceding the announcement of the transaction;
|
·
|
The transaction equity purchase price divided by the target’s book value of equity;
|
·
|
The transaction equity purchase price divided by the target’s tangible book value of equity; and
|
·
|
The transaction equity purchase price divided by the target’s net receivables balance.
|
Precedent Transaction Multiples
|
|||||
Range
|
Median
|
||||
Price / LTM EPS
|
6.0x - 20.3x
|
10.4x
|
|||
Price / Book Value
|
0.46x - 3.13x
|
1.07x
|
|||
Price / Tangible Book Value
|
0.47x - 3.76x
|
1.40x
|
|||
Price / Net Receivables
|
0.07x - 2.08x
|
0.34x
|
White River Implied Valuation
|
|||||
Selected Range
|
Implied Equity
Value ($M) |
Implied
Price/Share 1 |
|||
Price / LTM EPS
|
8.4x - 12.4x
|
$74.7 - $110.3
|
$20.61 - $30.43
|
||
Price / Book Value
|
1.00x - 1.20x
|
$76.2 - $91.4
|
$21.01 - $25.21
|
||
Price / Adjusted Book Value
|
1.00x - 1.20x
|
$57.7 - $69.2
|
$15.91 - $19.09
|
||
Price / Tangible Book Value
|
1.30x - 1.50x
|
$99.0 - $114.3
|
$27.32 - $31.52
|
||
Price / Adjusted Tangible Book Value
|
1.30x - 1.50x
|
$75.0 - $86.5
|
$20.69 - $23.87
|
||
Price / Net Receivables
|
0.50x - 0.80x
|
$62.0 - $99.3
|
$17.11 - $27.38
|
||
1: Based on fully-diluted share count including the impact of accelerated vesting of restricted shares.
|
Sensitivity Analysis: Total Equity Value
|
|||||||
Equity Discount Rate (%)
|
|||||||
10.5%
|
13.0%
|
15.5%
|
18.0%
|
20.5%
|
|||
7.0x
|
$ 20.95
|
$ 19.31
|
$ 17.84
|
$ 16.52
|
$ 15.32
|
||
8.0x
|
$ 23.41
|
$ 21.57
|
$ 19.91
|
$ 18.41
|
$ 17.07
|
||
9.0x
|
$ 25.88
|
$ 23.82
|
$ 21.97
|
$ 20.31
|
$ 18.81
|
||
10.0x
|
$ 28.34
|
$ 26.07
|
$ 24.04
|
$ 22.20
|
$ 20.55
|
||
11.0x
|
$ 30.80
|
$ 28.33
|
$ 26.10
|
$ 24.10
|
$ 22.29
|
Original Coastal Credit Projections
($ in thousands)
|
||||||||||||||||||||
Twelve Months Ended December 31,
|
||||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||||||||
Total assets
|
$ | 136,147 | $ | 155,184 | $ | 177,191 | $ | 202,668 | $ | 231,878 | ||||||||||
Total liabilities
|
89,812 | 96,972 | 105,873 | 116,768 | 130,000 | |||||||||||||||
Total shareholders’ equity
|
46,335 | 58,212 | 71,318 | 85,901 | 101,878 | |||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 136,147 | $ | 155,184 | $ | 177,191 | $ | 202,668 | $ | 231,878 | ||||||||||
Interest on receivables
|
$ | 39,731 | $ | 46,317 | $ | 53,265 | $ | 61,254 | $ | 70,565 | ||||||||||
Interest expense
|
(2,538 | ) | (2,713 | ) | (2,939 | ) | (3,215 | ) | (3,560 | ) | ||||||||||
Net interest margin
|
37,193 | 43,604 | 50,326 | 58,039 | 67,005 | |||||||||||||||
Provision for loan losses
|
(4,927 | ) | (8,205 | ) | (10,684 | ) | (13,290 | ) | (16,721 | ) | ||||||||||
Net interest margin after provision for loan losses
|
32,265 | 35,399 | 39,642 | 44,749 | 50,283 | |||||||||||||||
Other expense
|
(14,061 | ) | (16,087 | ) | (18,331 | ) | (21,037 | ) | (24,304 | ) | ||||||||||
Income before income taxes
|
$ | 18,205 | $ | 19,312 | $ | 21,311 | $ | 23,712 | $ | 25,979 |
Revised 2012 Coastal Credit Projections
($ in thousands)
|
|||||
Twelve Months Ended
December 31, 2012 |
|||||
Total assets
|
$ | 131,390 | |||
Total liabilities
|
85,512 | ||||
Total shareholders’ equity
|
45,878 | ||||
Total liabilities and shareholders’ equity
|
$ | 131,390 | |||
Interest on receivables
|
$ | 37,048 | |||
Interest expense
|
(2,456 | ) | |||
Net interest margin
|
34,592 | ||||
Provision for loan losses
|
(4,786 | ) | |||
Net interest margin after provision for loan losses
|
29,806 | ||||
Other expense
|
(13,497 | ) | |||
Income before income taxes
|
$ | 16,309 |
·
|
filing articles of merger with the Secretary of State of the State of Indiana in accordance with the IBCL after the adoption of the merger agreement by our shareholders; and
|
·
|
complying with U.S. federal securities laws.
|
·
|
an individual citizen or resident of the United States;
|
·
|
a corporation (or other entity taxed as a corporation) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
|
·
|
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
|
·
|
a trust if (a) a U.S. court can exercise primary supervision over the administration of the trust and one or more “United States persons” within the meaning of the Code can control all substantial trust decisions, or (b) the trust was in existence on August 20, 1996 and has elected to continue to be treated as a United States person.
|
·
|
shares owned by White River as treasury stock, which shares will be cancelled without consideration in connection with the merger; and
|
·
|
shares owned by Parent or Merger Sub or any of Parent’s or White River’s wholly-owned subsidiaries, which shares will be cancelled without consideration in connection with the merger.
|
·
|
all fees and expenses of, and other amounts paid or payable by, White River (whether paid or payable by White River or Coastal Credit) whether arising or incurred in connection with the transactions contemplated by the merger agreement, the ordinary course of business, any alternative transaction involving White River and Coastal Credit, or otherwise (except as expressly excluded below);
|
·
|
any bonuses authorized by White River’s board of directors prior to November 15, 2012 (or after November 15, 2012 but prior to the closing with the approval of Merger Sub) and any change of control payments to be paid to employees, officers, or directors of White River or Coastal Credit contingent upon (or triggered in whole or in part by) the completion of the merger, including any phantom equity awards to be accelerated and paid in connection with the merger;
|
·
|
severance payments to which any officer of White River becomes entitled upon the consummation of the transactions contemplated by the merger agreement;
|
·
|
any payroll, social security, unemployment, or other taxes (excluding federal and state income taxes) to be paid by White River or Coastal Credit in connection with any of the foregoing items; and
|
·
|
fees and charges of outside legal counsel (not directly related to any litigation relating to the merger or the transactions contemplated by the merger agreement) and other professional advisors (including Milestone and Bridgeforce, Inc., a due diligence consultant to Coastal Credit), including fees and charges relating to the preparation, filing, and distribution of this proxy statement and related proxy materials to White River’s shareholders and the solicitation of proxies in connection therewith.
|
·
|
fees or expenses incurred by White River, Coastal Credit, Parent, or Merger Sub in connection with obtaining the consent of Wells Fargo to the merger, an expansion of the Wells Fargo LOC, or a new warehouse line of credit with another financial institution;
|
·
|
any premiums for director and officer insurance;
|
·
|
any premiums for a buyer-side representation and warranty insurance policy to be obtained by Merger Sub;
|
·
|
any costs (including legal fees and costs of investigation, settlement, or judgment) arising from any litigation relating to the merger or the transactions contemplated by the merger agreement;
|
·
|
federal and state income taxes;
|
·
|
New York Stock Exchange listing fees;
|
·
|
professional fees and expenses for financial audit and tax services incurred in the ordinary course of business and not directly related to the transactions contemplated by the merger agreement; and
|
·
|
any expenses incurred by or on behalf of Parent or Merger Sub (rather than White River or Coastal Credit).
|
December 2012
|
$4,319,000
|
|
January 2013
|
$4,717,000
|
|
February 2013
|
$5,087,000
|
|
March 2013
|
$5,491,000
|
$5,087,000 (February 2013 targeted figure)
|
|||
–
|
$4,717,000 (January 2013 targeted figure)
|
||
$370,000
|
|||
÷ | 28 (number of days in February) | ||
$13,214.29
|
|||
x | 10 (number of days between closing and month end) | ||
$132,142.90, which is then deducted from $5,087,000 (February 2013 targeted figure) to produce a Targeted Company Net Expense figure of $4,954,857.10.
|
·
|
due organization, good standing, and qualification to do business, and other corporate matters with respect to White River and Coastal Credit;
|
·
|
White River’s corporate authority and authorization to enter into and perform, and the enforceability of, the merger agreement;
|
·
|
the required shareholder approvals to adopt the merger agreement and approve the transactions contemplated by the merger agreement;
|
·
|
the absence of conflicts with, or defaults under, our organizational documents, permits, other contracts, and applicable laws;
|
·
|
White River’s and its subsidiaries’ capitalization and certain related matters;
|
·
|
White River’s subsidiaries;
|
·
|
documents filed with or furnished to the SEC and the accuracy of the information in those documents, including White River’s financial statements;
|
·
|
White River’s internal controls over financial reporting and disclosure controls and procedures;
|
·
|
the level of White River’s and Coastal Credit’s indebtedness and cash, and the net book value of White River and Coastal Credit, as of the dates specified in the merger agreement;
|
·
|
ownership of real and personal property;
|
·
|
leased real property;
|
·
|
the absence of certain undisclosed liabilities;
|
·
|
tax matters;
|
·
|
absence of any material adverse effect with respect to White River and Coastal Credit, taken as a whole, since December 31, 2011;
|
·
|
employee benefit matters;
|
·
|
required regulatory filings and consents and approvals of domestic and foreign governmental authorities;
|
·
|
compliance with laws and compliance with, and adequacy of, authorizations and permits;
|
·
|
pending or threatened litigation, arbitration, audits, hearings, and investigations;
|
·
|
the conduct of business in the ordinary course of business consistent with past practice since December 31, 2011, and the absence of certain actions taken since December 31, 2011;
|
·
|
certain material contracts;
|
·
|
insurance matters;
|
·
|
environmental matters;
|
·
|
employee and labor relations matters;
|
·
|
intellectual property;
|
·
|
transactions with affiliates;
|
·
|
brokers,’ finders,’ and certain other similar fees;
|
·
|
White River’s and its subsidiaries’ corporate records; and
|
·
|
this proxy statement, the information included or incorporated by reference in this proxy statement, and any other document filed by White River in connection with the merger not being false or misleading.
|
·
|
their due organization, good standing, and qualification to do business;
|
·
|
their authority and authorization to enter into and perform, and the enforceability of, the merger agreement;
|
·
|
the absence of conflicts with, or defaults under, their organizational documents, other contracts, and applicable laws;
|
·
|
Parent’s investment intent relative to U.S. securities laws;
|
·
|
absence of certain pending and threatened legal proceedings;
|
·
|
absence of brokers,’ finders,’ and certain other similar fees;
|
·
|
the sufficiency of cash, lines of credit, and other sources of immediately available funds to pay the aggregate merger consideration;
|
·
|
operations and assets of Merger Sub;
|
·
|
information furnished by White River to Parent and Merger Sub; and
|
·
|
the absence of any voting agreements with Parent, Merger Sub, or any of their affiliates pursuant to which any White River shareholder has made an agreement relating to any vote on the merger agreement.
|
·
|
changes in laws of general applicability to consumer finance companies or their holding companies or interpretations thereof by courts or governmental authorities, provided that such effect does not disproportionately impact the respective party and its subsidiaries when compared with similar businesses operating in the same industry;
|
·
|
changes in GAAP, provided that such effect does not disproportionately impact the respective party and its subsidiaries when compared with similar businesses operating in the same industry;
|
·
|
the impact of the announcement of the merger agreement or compliance with the express restrictions on operations of White River and Coastal Credit set forth in the merger agreement; or
|
·
|
the occurrence of any military or terrorist attack within the United States or any of its possessions or offices, provided that such effect does not disproportionately impact the respective party and its subsidiaries when compared with similar businesses operating in the same industry.
|
·
|
conduct its business only in the ordinary course consistent with past practice and use commercially reasonable efforts to preserve its business organization intact and maintain customer, supplier, creditor, lessor and business associate relationships;
|
·
|
maintain insurance with financially responsible or nationally recognized insurers in such amounts and against such risks and losses as are consistent with the insurance maintained by it in the ordinary course of business;
|
·
|
promptly provide Merger Sub with copies of all filings and communications with any state or federal governmental entities in connection with the merger agreement and the transactions contemplated by the merger agreement;
|
·
|
use commercially reasonable efforts to promptly obtain the consents required to consummate the merger, and to notify Merger Sub of any failure or anticipated failure to obtain any such consents;
|
·
|
use commercially reasonable efforts to maintain in effect or renew all existing licenses and permits required to operate their business; and
|
·
|
within the 30 days preceding the closing, take irrevocable action to liquidate phantom equity awards at White River and all similar agreements, methods, programs, and other arrangements sponsored by White River that are treated as having been deferred under a single plan.
|
·
|
amend its organizational documents;
|
·
|
repurchase, redeem, or otherwise acquire any of White River’s or its subsidiaries’ equity capital or any securities convertible into or exchangeable or exercisable for any shares of White River’s or its subsidiaries’ capital stock or other equity;
|
·
|
split, combine, or reclassify any shares of White River’s or its subsidiaries’ equity capital;
|
·
|
issue, sell or dispose of any of White River’s or its subsidiaries’ equity capital or any securities convertible into or exchangeable or exercisable for any shares of White River’s or its subsidiaries’ capital stock or other equity, or any options, warrants, calls, commitments or rights of any kind to purchase or acquire any shares of White River’s or its subsidiaries’ capital stock or other equity;
|
·
|
incur any indebtedness other than borrowings under the Wells Fargo LOC in the ordinary course of business;
|
·
|
repay principal on debts except in the ordinary course of business;
|
·
|
make any acquisition of, or investment in, whether by merging or consolidating with, purchasing or by any other manner, assets or stock of any other person or entity;
|
·
|
permit any of its assets to be subject to any liens or encumbrances, or transfer or otherwise dispose of any of its assets, other than the sale of inventory in the ordinary course of business;
|
·
|
terminate, establish, adopt, enter into, make any new grants or awards of equity-based, phantom equity or similar compensation or other benefits under, amend or otherwise materially modify any employee benefit plan or compensation arrangement, or increase the salary, wage, bonus or other compensation of any managers, directors, officers, or employees, except normal periodic performance reviews that result in ordinary course cash compensation increases, the provision of any benefits (other than equity-based, phantom equity, or similar compensation) under the existing terms of White River’s and Coastal Credit’s employee benefit plans and compensation arrangements consisted with past practice for newly hired, appointed, or promoted officers or employees, or amendments to any such plans as required by law;
|
·
|
implement any facility closings or employee layoffs that could implicate the WARN Act;
|
·
|
enter into, violate, materially amend or modify, or terminate any material contract;
|
·
|
declare, set aside, establish a record date for, make or pay any dividend or other distribution on its capital stock or other equity, make any other payments to its shareholders or equityholders (other than payments between White River and Coastal Credit), or enter into any agreement with respect to the voting of its capital stock or other equity;
|
·
|
change any credit practice or accounting methods or take certain actions relating to tax matters and other books and records;
|
·
|
enter into any contract with any related party or shareholder;
|
·
|
transfer or assign certain contracts to any affiliate other than White River or Coastal Credit;
|
·
|
settle or otherwise terminate any litigation or other claims and proceedings;
|
·
|
incur or commit to incur any capital expenditures in excess of $25,000 in the aggregate in any month;
|
·
|
commence any legal proceedings;
|
·
|
acquire, lease, or license any assets, other than in the ordinary course of business;
|
·
|
propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization; or
|
·
|
except as required by applicable legal requirements or GAAP, materially revalue any material assets, including writing off notes or accounts receivable.
|
|
(i)
|
complying with White River’s disclosure obligations under Rule 14d-9 or Rule 14e-2(a) under the Exchange Act;
|
|
(ii)
|
providing information in response to a request by a person who has made an unsolicited bona fide Acquisition Proposal or given written notification of its bona fide intent to make an Acquisition Proposal, at any time prior to, but not after, the receipt of the shareholder approval described in “–
Shareholders Meeting
” above, if our board of directors receives from the person so requesting such information an executed confidentiality and standstill agreement (which information shall be provided to Parent if not already provided to Parent);
|
|
(iii)
|
engaging in any negotiations or discussions with any such person who has made such unsolicited notification of its intent to make a bona fide written Acquisition Proposal; or
|
|
(iv)
|
subject to the provisions of the merger agreement governing the consideration of Acquisition Proposals (see “–
Termination in Connection with a Superior Proposal
” below), recommending such an Acquisition Proposal to the shareholders of White River.
|
·
|
withhold, withdraw, qualify, or modify (or publicly propose or resolve to withhold, withdraw, qualify, or modify), in a manner adverse to Parent or Merger Sub, the White River board’s “
board recommendation
,” which consists of (i) the board’s approval and adoption of the merger agreement and the transactions contemplated thereby, (ii) the board’s determination that the merger and the other transactions contemplated by the merger agreement are at a price and on terms that are fair and advisable and in the best interests of White River, and (iii) the board’s recommendation for the approval of the principal terms of the merger agreement and the merger by White River’s shareholders;
|
·
|
adopt, approve, or recommend, or publicly propose to adopt, approve, or recommend an Acquisition Proposal (defined below) made by an outside third party;
|
·
|
fail to publicly recommend against any Acquisition Proposal or fail to publicly reaffirm the White River board recommendation in favor of the merger, in each case within five business days after Parent so requests in writing;
|
·
|
fail to recommend against any Acquisition Proposal subject to Regulation 14D under the Exchange Act in a solicitation/recommendation statement on Schedule 14D-9 within 10 business days after the commencement of such Acquisition Proposal; or
|
·
|
cause or permit White River or Coastal Credit to enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement, or other similar agreement relating to any Acquisition Proposal.
|
·
|
the board determines in good faith, after consultation with its independent financial advisor and outside legal counsel that, in light of such intervening event, the failure of the board to effect such a Company Adverse Recommendation Change would be inconsistent with its fiduciary obligations under applicable law and not be in the best interests of White River, in accordance with the standards of conduct applicable to directors under the IBCL; and
|
·
|
White River shall provide notice to Merger Sub and engage in good faith negotiations with Merger Sub in the same manner as described above in connection with the consideration of a third party Acquisition Proposal, so that Parent may make such adjustments in the terms and conditions of the merger agreement in such a manner that obviates the need for White River to make a Company Adverse Recommendation Change as a result of the intervening event.
|
·
|
use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable legal requirements or otherwise to cause any of the conditions to the other party’s obligation to consummate the transactions contemplated by the merger agreement to be fully satisfied;
|
·
|
prepare and file promptly and fully all documentation to effect all necessary filings, and consult and fully cooperate with and provide reasonable assistance to each other in making all filings, meetings and appearances, with any governmental authority (including any required filings under applicable antitrust laws);
|
·
|
consult and fully cooperate with and provide reasonable assistance to each other in obtaining all approvals, consents, registrations, permits, authorizations and other confirmations from any governmental authority or third party necessary, proper or advisable (including antitrust filings) to consummate the transactions contemplated by the merger agreement;
|
·
|
cooperate in all respects with each other in connection with any filing or submission with a governmental authority in connection with the transactions contemplated by the merger agreement and in connection with any investigation or other inquiry by or before a governmental authority relating to the transactions contemplated by the merger agreement, including any proceedings initiated by a private party;
|
·
|
consult and cooperate with one another, and consider in good faith the views of one another, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party in connection with any governmental authorizations;
|
·
|
respond to any request for additional information or documentary material received from any governmental authority with respect to antitrust laws as promptly as practicable; and
|
·
|
resolve any objections as may be asserted by a governmental authority or other person with respect to the transactions contemplated by the merger agreement.
|
·
|
supply as promptly as practicable any additional information and documentary material or assistance requested by the other party in connection with any necessary filings pursuant to the HSR Act; and
|
·
|
with respect to Parent and Merger Sub only, use commercially reasonable efforts to obtain any approvals required under the HSR Act and to enable the expiration or termination of the applicable waiting periods under the HSR Act as promptly as practicable, and in any event prior to March 31, 2013. On December 11, 2012, the FTC granted early termination of the waiting period under the HSR Act.
|
·
|
Parent and Merger Sub are able to obtain an expansion of the Wells Fargo LOC from an original maximum available principal amount of $100 million to at least $140 million, including among other things, (A) a certification by White River that no default or event of default under such facility exists as of the closing date and as of immediately after the closing after giving effect to the transactions contemplated under the merger agreement, and (B) at least $21 million being available to be drawn under the facility as of the closing under Coastal Credit’s existing borrowing base, including for purposes of financing the merger consideration; or
|
·
|
Parent and Merger Sub have obtained a new warehouse line of credit with another financial institution with an original maximum available principal amount of at least $140 million, with at least $21 million of cash borrowings available to finance the merger consideration.
|
·
|
the filing of this proxy statement with the SEC (and cooperation in response to any comments from the SEC with respect to this proxy statement);
|
·
|
public announcements and filings relating to the merger;
|
·
|
cooperation by White River with Parent and Merger Sub (or their designees) to obtain debt financing in connection with the transactions contemplated by the merger agreement;
|
·
|
the termination of certain agreements between White River and its affiliates;
|
·
|
Merger Sub’s and its representatives’ access to White River’s and Coastal Credit’s employees, agents, properties, books, contracts, records and other information between the date of the merger agreement and the effective time of the merger;
|
·
|
Parent’s participation in the defense or settlement of any securityholder litigation against or relating to White River and/or its directors or affiliates related to the merger agreement or the transactions contemplated by the merger agreement; and
|
·
|
the payment of fees and expenses.
|
·
|
the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Common Stock at the special meeting in favor of the adoption of the merger agreement in accordance with applicable law and White River’s charter documents;
|
·
|
all applicable waiting periods under the HSR Act must have expired or been terminated; and
|
·
|
the absence of any law, order, or legal injunction in effect enjoining, restraining, preventing or prohibiting consummation of the merger or making the consummation of the merger illegal.
|
·
|
the representations and warranties of White River:
|
o
|
regarding White River’s and Coastal Credit’s organization and good standing, power and authority to conduct business, and qualification to do business must be true and correct in all respects as of the closing date as if made on and as of the closing date;
|
o
|
regarding the authorization of White River to enter into the merger agreement and to consummate or perform the transactions contemplated by the merger agreement, and that the merger agreement will be binding on White River, must be true and correct in all respects as of the closing date as if made on and as of the closing date;
|
o
|
regarding the disclosure of (i) any employee benefit plan or compensation arrangement or contract pursuant to which any amounts may become payable, (ii) any increase in any benefits otherwise payable under any employee benefit plan or compensation arrangement or contract, and (iii) any acceleration of the time of payment or vesting of any benefits under any employee benefit plan or compensation arrangement or contract, in each case as a result of or in connection with the entry into the merger agreement or the consummation of the transactions contemplated by the merger agreement, must be true and correct in all respects as of the closing date as if made on and as of the closing date;
|
o
|
regarding the capitalization and ownership of White River and Coastal Credit, the rights and obligations with respect to the equity securities of White River and Coastal, the subsidiaries and investments of White River, and the activities of Union Acceptance Company LLC (f/k/a Union Acceptance Corporation) during the period in which it was owned by White River, must be true and correct in all respects as of the closing date as if made on and as of the closing date (or, if given as of a specific time, at and as of such time);
|
o
|
regarding the indebtedness, cash holdings, and net book value of assets of White River and Coastal Credit must be true and correct in all respects as of the closing date as if made on and as of the closing date (or, if given as of a specific time, at and as of such time);
|
o
|
regarding the absence of any material adverse effect since December 31, 2011, must be true and correct in all respects as of the closing date as if made on and as of the closing date; and
|
o
|
regarding anything other than as described above, disregarding all qualifications and exceptions contained therein related to materiality or material adverse effect, must be true and correct as of the closing date as if made on and as of the closing date (or, if given as of a specific time, at and as of such time), except where the failure to be so true and correct would not have a material adverse effect;
|
·
|
White River must have performed and complied in all material respects with all covenants and agreements required by the merger agreement to be performed or complied with by White River on or prior to the closing date;
|
·
|
no legal requirement or proceeding (whether temporary, preliminary or permanent) related to the merger or the approval of the merger shall be pending or shall have been enacted, issued, promulgated, enforced or entered that either (i) prevents or prohibits consummation of the merger, or (ii) has caused White River and Coastal Credit to incur, or would otherwise reasonably be expected to cause them to incur, fees, expenses or other payment obligations (including without limitation, and without duplication, legal fees and settlement obligations and insurance deductibles or co-payment obligations) in the aggregate in excess of $3,000,000
(provided that such amount shall be determined after giving effect to a reduction for any such fees, expenses or other payment obligations of White River and Coastal Credit that would reasonably be expected to be paid or reimbursed under insurance held by them);
|
·
|
there must not have been any material adverse effect with respect to White River and Coastal Credit, taken as a whole, since the date of the merger agreement;
|
·
|
the Company Expense Adjustment described elsewhere in this proxy statement shall not operate to increase or decrease the aggregate purchase price to be paid under the merger agreement by more than $2 million (assuming for purposes of such calculation as if the $2 million cap on Company Allocable Expenses did not apply);
|
·
|
the change of control of Coastal Credit’s Florida Sales Finance Company License and Texas Motor Vehicle Sales Finance License must have been approved by appropriate governmental bodies in such respective jurisdictions in accordance with legal requirements, or approval of Coastal Credit’s temporary continued operation following the closing pending such approvals shall have been provided in writing by the applicable government bodies;
|
·
|
(i) the Wells Fargo Consent shall have been obtained, (ii) no default or event of default under the Wells Fargo LOC shall exist as of the closing date, and (iii) at least $10 million must be available to be drawn under the Wells Fargo LOC as of the closing date under Coastal Credit’s existing borrowing base (and White River shall have provided to Parent a certification that items (ii) and (iii) foregoing are true), unless:
|
o
|
Parent and Merger Sub are able to obtain an expansion of the Wells Fargo LOC from an original maximum available principal amount of $100 million to at least $140 million, including among other things, (A) a certification by White River that no default or event of default under such facility exists as of the closing date and as of immediately after the closing after giving effect to the transactions contemplated under the merger agreement, and (B) at least $21 million being available to be drawn under the facility as of the closing under Coastal Credit’s existing borrowing base, including for purposes of financing the merger consideration; or
|
o
|
Parent and Merger Sub have obtained a new warehouse line of credit with another financial institution with an original maximum available principal amount of at least $140 million, with at least $21 million of cash borrowings available to finance the merger consideration; and
|
·
|
White River must have delivered to Parent customary closing certificates and other deliveries.
|
·
|
the representations and warranties of Parent and Merger Sub set forth in the merger agreement, disregarding all qualifications and exceptions contained therein related to materiality or material adverse effect, must be true and correct in all material respects as of the closing date as if made on and as of the closing date (or, if given as of a specific date, at and as of such date);
|
·
|
Parent and Merger Sub must have performed and complied in all material respects with all covenants and agreements required by the merger agreement to be performed or complied with by Parent and Merger Sub on or prior to the closing date;
|
·
|
Parent or Merger Sub shall have deposited the portion of the purchase price payable to the paying agent with the paying agent and the portion of the purchase price payable to the surviving corporation with respect to the payment on Performance Shares with White River; and
|
·
|
Parent or Merger Sub must have delivered to White River customary closing certificates and other deliveries.
|
·
|
the merger is not closed by March 31, 2013, with certain exceptions; or
|
·
|
approval of the merger agreement by White River’s shareholders is not obtained, with certain exceptions.
|
·
|
at any time prior to the special meeting, White River concurrently enters into an acquisition agreement with respect to a competing acquisition proposal which the board of directors determines in good faith is a superior proposal to the merger agreement and that the failure to enter into such competing proposal would reasonably likely violate the directors’ fiduciary obligations under applicable law; provided that (i) White River provides prior written notice to Merger Sub of its intention to accept the superior proposal, (ii) within three business days thereafter, Merger Sub, Parent, and White River do not negotiate an adjustment to the merger agreement so that the third-party acquisition proposal is no longer a superior proposal to the merger agreement, and (iii) White River pays a termination fee of $3,975,000 to Merger Sub. If Merger Sub notifies White River in writing prior to the expiration of the three-day period described above that it shall modify its offered terms so that the competing acquisition proposal ceases to be a superior proposal, then White River shall not be permitted to enter into an alternative acquisition agreement, or permit the board to change its recommendation in favor of the merger agreement, with respect to the competing acquisition proposal. White River will have 48 hours to evaluate Merger Sub’s modified terms. However, in the event our board determines in good faith, after consultation with its financial advisor and upon advice from outside legal counsel, that consummation of Merger Sub’s modified transaction terms instead of the competing acquisition proposal would be reasonably likely to violate its fiduciary obligations under applicable law and not be in the best interests of White River, in accordance with the standards of conduct applicable to directors under the IBCL, White River will be permitted to terminate the merger agreement in order to execute an alternative acquisition agreement with respect to the superior proposal; or
|
·
|
at any time prior to the effective time of the merger, whether before or after shareholder approval is received, there has been a breach of any representation, warranty, covenant, or agreement made by Parent or Merger Sub in the merger agreement such that the closing condition regarding the accuracy of Parent’s and Merger Sub’s representations and warranties or performance of its covenants and agreements under the merger agreement would not be satisfied, and such breach or condition is not cured within the earlier of 30 days after written notice of such breach is given by White River to Parent or March 31, 2013.
|
·
|
(i) the board of directors of White River makes a Company Adverse Recommendation Change to its shareholders with respect to the merger, (ii) White River’s board of directors fails to reaffirm the White River board recommendation to its shareholders in favor of the merger within five business days after Parent has requested in writing that it do so and the board continues to fail to reaffirm the recommendation as of the date the merger agreement is terminated, or (iii) any third party shall have commenced a tender or exchange offer or other transaction constituting or potentially constituting an Acquisition Proposal and White River shall not have sent to its shareholders pursuant to Rule 14e-2 under the Exchange Act, within 10 business days after such tender or exchange offer is first published, sent, or given, a statement disclosing that White River recommends rejection of such tender offer or exchange offer;
|
·
|
White River breaches any of its covenants regarding non-solicitation, competing Acquisition Proposals, or the holding of the special meeting and solicitation of proxies in connection with the merger agreement (other than an immaterial breach not intended to result in a third-party Acquisition Proposal); or
|
·
|
at any time prior to the effective time of the merger, whether before or after shareholder approval is received, there has been a breach of any representation, warranty, covenant, or agreement made by White River in the merger agreement such that the closing condition regarding the accuracy of White River’s representations and warranties or performance of its covenants and agreements under the merger agreement would not be satisfied, and such breach or condition is not cured within the earlier of 30 days after written notice of such breach is given by Parent to White River or March 31, 2013.
|
·
|
any governmental body shall have issued an order or taken other action permanently enjoining, restraining, or prohibiting the merger, and such order or action shall have become final and nonappealable; provided that the party seeking to terminate the agreement in this regard shall not have initiated such proceeding or taken any action in support of such proceeding and such party shall have used its reasonable best efforts to prevent and oppose such order or action.
|
·
|
waive any inaccuracies in the representations and warranties of any other party to the merger agreement;
|
·
|
extend the time for the performance of any of the obligations or acts of any other party to the merger agreement; or
|
·
|
waive compliance by the other party to the merger agreement with any of the agreements contained therein or, except as otherwise provided in the merger agreement, waive any of such party’s conditions;
|
·
|
the merger closes on February 28, 2013;
|
·
|
with respect to compensation payable under the employment agreement of Mr. Szumski, it is assumed that Mr. Szumski’s employment is terminated by the surviving corporation without cause, or is terminated by Mr. Szumski for good reason, immediately following the closing of the merger; and
|
·
|
shares of White River Common Stock are valued at $21.93 per share, which is the fixed dollar amount per share that White River’s shareholders are to receive in the merger (before any purchase price adjustment), based on 3,625,892 shares of White River Common Stock expected to be issued and outstanding at closing on a fully diluted basis.
|
Name
|
Cash
($)
|
Equity
($)
|
Pension/ NQDC
($)
|
Perquisites/ Benefits
($)
|
Tax
Reimburse
ment
($)
|
Other ($)
|
Total
($)
|
|||||||||||||||||||||
John M. Eggemeyer, III
Chairman and Chief Executive Officer
|
$ | 203,333 | (1),(2) | $ | 1,312,664 | (5) | ----- | ----- | ----- | ----- | $ | 1,515,997 | ||||||||||||||||
William E. McKnight
President and Chief Executive Officer – Coastal Credit, L.L.C.
|
$ | 3,333 | (1),(3) | $ | 751,000 | (6) | ----- | ----- | ----- | ----- | $ | 754,333 | ||||||||||||||||
Martin J. Szumski
Chief Financial Officer and Senior Vice President
|
$ | 385,417 | (4) | $ | 73,115 | (7) | ----- | ----- | ----- | ----- | $ | 458,532 |
(1)
|
Includes the accelerated pro rata portion of the cash component for board of directors compensation to which each of Mr. Eggemeyer and Mr. McKnight would be entitled under the Directors Plan for two months of board service during 2013. Messrs. Eggemeyer and McKnight each are entitled to annual cash compensation of $20,000 for their service on the board of directors, which is ordinarily paid in quarterly installments. The amounts in this column for Messrs. Eggemeyer and McKnight are expected to be paid at or prior to the closing of the merger.
|
(2)
|
Includes a "single trigger" $200,000 one-time discretionary cash bonus award paid to Mr. Eggemeyer on December 28, 2012 in recognition of his service to White River in 2012, including his efforts in negotiating the merger.
|
(3)
|
Under the Second Amendment dated November 15, 2012 (the “
Second Amendment
”) to Mr. McKnight’s Employment Agreement with White River and Coastal Credit, neither the execution of the merger agreement nor the execution and implementation of the Second Amendment will constitute “good reason” or a “change of control” under his employment agreement, as amended. As a result, the merger will not trigger an entitlement to any cash severance payments in favor of Mr. McKnight that he otherwise would have been entitled to under his amended employment agreement for a termination of employment for “good reason.”
|
(4)
|
Includes for Mr. Szumski (i) a pro rata portion of the annual cash performance bonus in respect of 2013 in the amount of $15,417, representing the amount of the bonus to which Mr. Szumski would be entitled for two months of employment with White River during 2013; and (ii) two years of Mr. Szumski’s current annual base salary of $185,000. The foregoing amounts are payable to Mr. Szumski under his employment agreement assuming his employment is terminated by White River without cause in connection with a change of control of White River on or before the date that is one year after the occurrence of a change of control, or if Mr. Szumski terminates his employment for good reason in connection with a change of control of White River during the term of his employment agreement. This is a double-trigger arrangement payable in the event of a change of control conditioned upon a termination of employment without cause or a resignation for good reason following the change of control. Mr. Szumski’s annual cash performance bonus in respect of 2012 service in the amount of $92,500 was paid to Mr. Szumski prior to the date of this proxy statement and is not based on or otherwise related to the merger. Therefore, this amount is not considered “golden parachute compensation” under Item 402(t) and is not reflected in this table.
|
(5)
|
The amount in this column for Mr. Eggemeyer includes (i) the dollar value ($1,292,664) of performance share awards granted to Mr. Eggemeyer under the Stock Incentive Plan for 58,945 shares of common stock which will become fully vested and converted into the merger consideration on the effective date of the merger; and (ii) the dollar value ($20,000) of restricted stock awards granted to Mr. Eggemeyer under the Stock Incentive Plan on January 4, 2013, for 909 shares of common stock as partial consideration for board service during 2012, which will become fully vested and converted into the merger consideration on the effective date of the merger. These are single-trigger arrangements payable in the event of a change of control for which payment is not conditioned upon a termination or resignation of Mr. Eggemeyer. The shares disclosed in this paragraph are valued at $21.93 per share, which is the fixed dollar amount per share that White River’s shareholders are to receive in the merger (before any purchase price adjustment).
|
(6)
|
The amount in this column for Mr. McKnight includes (i) the dollar value ($731,000) of accelerated phantom stock awards for 33,333.33 shares of common stock which will become fully vested and payable to Mr. McKnight upon the closing of the merger under his Amended and Restated Terms of Long-Term Cash Incentive Award dated May 10, 2011, as amended on November 15, 2012; and (ii) the dollar value ($20,000) of restricted stock awards granted to Mr. McKnight under the Stock Incentive Plan on January 4, 2013, for 909 shares of common stock as partial consideration for board service during 2012, which will become fully vested and converted into the merger consideration on the effective date of the merger. These are single-trigger arrangements. The shares disclosed in this paragraph are valued at $21.93 per share, which is the fixed dollar amount per share that White River’s shareholders are to receive in the merger (before any purchase price adjustment).
|
(7)
|
The amount in this column for Mr. Szumski includes the dollar value ($73,115) of accelerated restricted stock awards granted under the Stock Incentive Plan for 3,334 shares of Common Stock which will be converted into the merger consideration on the effective date of the merger. This is a single-trigger arrangement. The shares disclosed in this paragraph are valued at $21.93 per share, which is the fixed dollar amount per share that White River’s shareholders are to receive in the merger (before any purchase price adjustment).
|
(8)
|
The following table quantifies, for each Named Executive Officer, the portion of the total amount of golden parachute compensation that is payable attributable to a double-trigger arrangement (i.e., amounts triggered by a change of control for which payment is conditioned upon the executive officer’s termination without cause or resignation for good reason within a limited time period following the change of control) and a single-trigger arrangement (i.e., amounts triggered by a change of control for which payment is not conditioned upon such a termination or resignation of the executive officer).
|
Name
|
Double Trigger
($)
|
Single Trigger
($)
|
|||||||
John M. Eggemeyer, III
|
----- | $ | 1,515,997 | ||||||
William E. McKnight
|
----- | $ | 754,333 | ||||||
Martin J. Szumski
|
$ | 385,417 | $ | 73,115 |
High
|
Low
|
Dividends
|
||||||||||
Fiscal year 2010:
|
||||||||||||
1
st
quarter ended 3/31/10
|
$ | 14.27 | $ | 11.10 | $ | 0.25 | ||||||
2
nd
quarter ended 6/30/10
|
$ | 15.50 | $ | 13.00 | $ | 0.25 | ||||||
3
rd
quarter ended 9/30/10
|
$ | 17.53 | $ | 13.64 | $ | 0.25 | ||||||
4
th
quarter ended 12/31/10
|
$ | 21.90 | $ | 16.10 | $ | 4.25 | ||||||
Fiscal year 2011:
|
||||||||||||
1
st
quarter ended 3/31/11
|
$ | 18.18 | $ | 16.32 | $ | 0.25 | ||||||
2
nd
quarter ended 6/30/11
|
$ | 19.60 | $ | 17.04 | $ | 0.25 | ||||||
3
rd
quarter ended 9/30/11
|
$ | 20.10 | $ | 18.00 | $ | 0.25 | ||||||
4
th
quarter ended 12/31/11
|
$ | 26.80 | $ | 18.81 | $ | 4.25 | ||||||
Fiscal year 2012:
|
||||||||||||
1
st
quarter ended 3/31/12
|
$ | 23.31 | $ | 20.25 | $ | 0.25 | ||||||
2
nd
quarter ended 6/30/12
|
$ | 23.00 | $ | 22.30 | $ | 0.25 | ||||||
3
rd
quarter ended 9/30/12
|
$ | 23.00 | $ | 21.50 | $ | 0.25 | ||||||
4
th
quarter ended 12/31/12
|
$ | 23.00 | $ | 20.80 | $ | 0.00 | ||||||
Fiscal Year 2013:
|
||||||||||||
1
st
quarter (through 1/10/13)
|
$ | 21.50 | $ | 21.17 | $ | 0.00 |
Date Dividend Declared
|
Record Date
|
Payment Date
|
Dividend Type
|
Cash Dividend Per Share
|
Total Dividend Paid (in thousands)
|
|||||
2/22/10
|
3/3/10
|
3/12/10
|
Quarterly Cash
|
$ 0.25
|
$ 995.6
|
|||||
5/6/10
|
5/17/10
|
5/28/10
|
Quarterly Cash
|
$ 0.25
|
$ 980.7
|
|||||
8/2/10
|
8/12/10
|
8/26/10
|
Quarterly Cash
|
$ 0.25
|
$ 938.7
|
|||||
11/2/10
|
11/12/10
|
11/22/10
|
Quarterly Cash
|
$ 0.25
|
$ 938.7
|
|||||
11/30/10
|
12/9/10
|
12/21/10
|
Special Cash
|
$ 4.00
|
$ 14,967.0
|
|||||
2/16/11
|
2/25/11
|
3/2/11
|
Quarterly Cash
|
$ 0.25
|
$ 926.7
|
|||||
5/5/11
|
5/16/11
|
5/31/11
|
Quarterly Cash
|
$ 0.25
|
$ 903.2
|
|||||
8/1/11
|
8/11/11
|
8/25/11
|
Quarterly Cash
|
$ 0.25
|
$ 903.2
|
|||||
10/28/11
|
11/7/11
|
11/21/11
|
Quarterly Cash
|
$ 0.25
|
$ 883.1
|
|||||
11/28/11
|
12/8/11
|
12/22/11
|
Special Cash
|
$ 4.00
|
$ 14,137.9
|
|||||
2/3/12
|
2/13/12
|
2/24/12
|
Quarterly Cash
|
$ 0.25
|
$ 884.8
|
|||||
5/11/12
|
5/22/12
|
6/5/12
|
Quarterly Cash
|
$ 0.25
|
$ 886.2
|
|||||
7/30/12
|
8/8/12
|
8/22/12
|
Quarterly Cash
|
$ 0.25
|
$ 886.2
|
1. D
EFINITIONS
|
1
|
|
2.
THE MERGER
|
12
|
|
2.1
|
THE MERGER
|
12
|
2.2
|
EFFECTIVE TIME, CLOSING
|
12
|
2.3
|
EFFECT OF THE MERGER
|
13
|
2.4
|
ARTICLES OF INCORPORATION, BY-LAWS
|
13
|
2.5
|
DIRECTORS AND OFFICERS
|
13
|
2.6
|
CONVERSION OF SECURITIES
|
13
|
2.7
|
NO DISSENTERS’ RIGHTS
|
14
|
2.8
|
SURRENDER OF SHARES; STOCK TRANSFER BOOKS
|
14
|
2.9
|
SUPPLEMENTAL ACTION
|
18
|
3.
CLOSING OBLIGATIONS
|
18
|
|
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
19
|
|
4.1
|
ORGANIZATION AND GOOD STANDING
|
19
|
4.2
|
AUTHORITY; NO CONFLICT
|
20
|
4.3
|
CAPITALIZATION
|
22
|
4.4
|
FINANCIAL STATEMENTS; REPORTS
|
23
|
4.5
|
OWNERSHIP OF PROPERTIES; ENCUMBRANCES
|
24
|
4.6
|
NO UNDISCLOSED LIABILITIES
|
25
|
4.7
|
TAXES
|
25
|
4.8
|
NO MATERIAL ADVERSE EFFECT
|
27
|
4.9
|
EMPLOYEE BENEFITS
|
27
|
4.10
|
COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
|
29
|
4.11
|
LEGAL PROCEEDINGS; ORDERS
|
30
|
4.12
|
ABSENCE OF CERTAIN CHANGES AND EVENTS
|
31
|
4.13
|
CONTRACTS
|
32
|
4.14
|
INSURANCE
|
35
|
4.15
|
ENVIRONMENTAL MATTERS
|
35
|
4.16
|
EMPLOYEES
|
35
|
4.17
|
LABOR RELATIONS; COMPLIANCE
|
36
|
4.18
|
INTELLECTUAL PROPERTY
|
37
|
4.19
|
AFFILIATE TRANSACTIONS
|
38
|
4.20
|
BROKERS OR FINDERS
|
38
|
4.21
|
BOOKS AND RECORDS
|
38
|
4.22
|
INFORMATION SUPPLIED
|
38
|
5.
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND BUYER
|
38
|
|
5.1
|
ORGANIZATION AND GOOD STANDING
|
39
|
5.2
|
AUTHORITY; NO CONFLICT
|
39
|
5.3
|
INVESTMENT INTENT
|
40
|
5.4
|
CERTAIN PROCEEDINGS
|
40
|
5.5
|
BROKERS OR FINDERS
|
40
|
5.6
|
FINANCIAL CAPACITY
|
40
|
5.7
|
OPERATIONS AND ASSETS OF BUYER
|
41
|
5.8
|
INFORMATION
|
41
|
5.9
|
VOTING AGREEMENTS
|
41
|
6.
CONDUCT OF BUSINESS PENDING CLOSING
|
42
|
|
6.1
|
COVENANTS OF THE COMPANY
|
42
|
6.2
|
NO SOLICITATION
|
44
|
6.3
|
EFFORTS
|
46
|
6.4
|
APPROVALS
|
47
|
6.5
|
PUBLIC ANNOUNCEMENTS
|
48
|
6.6
|
COOPERATION BY THE COMPANY
|
49
|
6.7
|
AFFILIATE AGREEMENTS
|
49
|
7.
ADDITIONAL AGREEMENTS
|
49
|
|
7.1
|
ACCESS TO COMPANY INFORMATION
|
49
|
7.2
|
BUYER COOPERATION
|
50
|
7.3
|
INDEMNIFICATION; DIRECTORS’ AND OFFICERS’ INSURANCE
|
50
|
7.4
|
PROXY; SHAREHOLDER APPROVAL
|
51
|
7.5
|
EMPLOYEE BENEFIT ARRANGEMENTS
|
52
|
7.6
|
TRANSACTION LITIGATION
|
53
|
8.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
|
54
|
|
8.1
|
THE PARENT AND BUYER
|
54
|
8.2
|
THE COMPANY
|
55
|
9.
TERMINATION
|
56
|
|
9.1
|
TERMINATION EVENTS
|
56
|
9.2
|
TERMINATION FEES
|
58
|
9.3
|
EFFECT OF TERMINATION
|
60
|
9.4
|
COOPERATION AFTER THE EFFECTIVE TIME
|
60
|
9.5
|
FURTHER ASSURANCES
|
60
|
9.6
|
EXPIRATION OF REPRESENTATIONS AND WARRANTIES
|
60
|
10.
GENERAL PROVISIONS
|
60
|
|
10.1
|
EXPENSES
|
60
|
10.2
|
SPECIFIC PERFORMANCE
|
61
|
10.3
|
GOVERNING LAW; JURISDICTION; WAIVER OF JURY
|
61
|
10.4
|
NOTICES
|
62
|
10.5
|
WAIVER
|
63
|
10.6
|
ENTIRE AGREEMENT AND MODIFICATION
|
63
|
10.7
|
ASSIGNMENTS, SUCCESSORS, AND THIRD-PARTY RIGHTS
|
63
|
10.8
|
SEVERABILITY
|
63
|
10.9
|
SECTION HEADINGS, CONSTRUCTION
|
63
|
10.10
|
TIME OF ESSENCE
|
64
|
10.11
|
COUNTERPARTS
|
64
|
10.12
|
DISCLOSURE LETTERS
|
64
|
December, 2012
|
$4,319,000
|
|
January, 2013
|
$4,717,000
|
|
February, 2013
|
$5,087,000
|
|
March, 2013
|
$5,491,000
|
2.1
|
THE MERGER
|
2.2
|
EFFECTIVE TIME, CLOSING
|
2.3
|
EFFECT OF THE MERGER
|
2.4
|
ARTICLES OF INCORPORATION, BY-LAWS
|
2.5
|
DIRECTORS AND OFFICERS
|
2.6
|
CONVERSION OF SECURITIES
|
2.7
|
NO DISSENTERS’ RIGHTS
|
2.8
|
SURRENDER OF SHARES; STOCK TRANSFER BOOKS
|
2.9
|
SUPPLEMENTAL ACTION
|
4.1
|
ORGANIZATION AND GOOD STANDING
|
4.2
|
AUTHORITY; NO CONFLICT
|
4.3
|
CAPITALIZATION
|
4.4
|
FINANCIAL STATEMENTS; REPORTS
|
4.5
|
OWNERSHIP OF PROPERTIES; ENCUMBRANCES
|
4.6
|
NO UNDISCLOSED LIABILITIES
|
4.7
|
TAXES
|
4.8
|
NO MATERIAL ADVERSE EFFECT
|
4.9
|
EMPLOYEE BENEFITS
|
4.10
|
COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
|
4.11
|
LEGAL PROCEEDINGS; ORDERS
|
4.12
|
ABSENCE OF CERTAIN CHANGES AND EVENTS
|
4.13
|
CONTRACTS
|
4.14
|
INSURANCE
|
4.15
|
ENVIRONMENTAL MATTERS
|
4.16
|
EMPLOYEES
|
4.17
|
LABOR RELATIONS; COMPLIANCE
|
4.18
|
INTELLECTUAL PROPERTY
|
4.19
|
AFFILIATE TRANSACTIONS
|
4.20
|
BROKERS OR FINDERS
|
4.21
|
BOOKS AND RECORDS
|
4.22
|
INFORMATION SUPPLIED
|
5.1
|
ORGANIZATION AND GOOD STANDING
|
5.2
|
AUTHORITY; NO CONFLICT
|
5.3
|
INVESTMENT INTENT
|
5.4
|
CERTAIN PROCEEDINGS
|
5.5
|
BROKERS OR FINDERS
|
5.6
|
FINANCIAL CAPACITY
|
5.7
|
OPERATIONS AND ASSETS OF BUYER
|
5.8
|
INFORMATION
|
5.9
|
VOTING AGREEMENTS
|
6.1
|
COVENANTS OF THE COMPANY
|
6.2
|
NO SOLICITATION
|
6.3
|
EFFORTS
|
6.4
|
APPROVALS
|
6.5
|
PUBLIC ANNOUNCEMENTS
|
6.6
|
COOPERATION BY THE COMPANY
|
6.7
|
AFFILIATE AGREEMENTS
|
7.1
|
ACCESS TO COMPANY INFORMATION
|
7.2
|
BUYER COOPERATION
|
7.3
|
INDEMNIFICATION; DIRECTORS’ AND OFFICERS’ INSURANCE
|
7.4
|
PROXY; SHAREHOLDER APPROVAL
|
7.5
|
EMPLOYEE BENEFIT ARRANGEMENTS
|
7.6
|
TRANSACTION LITIGATION
|
8.1
|
THE PARENT AND BUYER
|
8.2
|
THE COMPANY
|
9.1
|
TERMINATION EVENTS
|
9.2
|
TERMINATION FEES
|
9.3
|
EFFECT OF TERMINATION
|
9.4
|
COOPERATION AFTER THE EFFECTIVE TIME
|
9.5
|
FURTHER ASSURANCES
|
9.6
|
EXPIRATION OF REPRESENTATIONS AND WARRANTIES
|
10.1
|
EXPENSES
|
10.2
|
SPECIFIC PERFORMANCE
|
10.3
|
GOVERNING LAW; JURISDICTION; WAIVER OF JURY
|
10.4
|
NOTICES
|
THE COMPANY:
|
White River Capital, Inc.
|
|
6051 El Tordo
|
||
Rancho Santa Fe, CA 92067
|
||
Attn: John M. Eggemeyer, III, Chief Executive Officer
|
||
Telephone: 858-997-6740
|
||
Fax: 858-756-8301
|
||
WITH A COPY TO:
|
Barnes & Thornburg LLP
|
|
11 S. Meridian Street
|
||
Indianapolis, IN 46204
|
||
Attn: Eric R. Moy, Esq.
|
||
Telephone: 317-231-7298
|
||
Fax: 317-231-7433
|
||
PARENT OR BUYER:
|
Coastal Credit Holdings, Inc.
|
|
Four Embarcadero Center, Suite 3610
|
||
San Francisco, CA 94111
|
||
Attn: Brian P. Golson
Andrew C. Dodson |
||
Telephone: 415-913-3900
|
||
Fax: 415-913-3913
|
||
WITH A COPY TO:
|
Kirkland & Ellis LLP
|
|
300 N. LaSalle
|
||
Chicago, Illinois 60654
|
||
Attn: Jeffrey Seifman, P.C.
Shelly M. Hirschtritt, P.C. Tana M. Ryan |
||
Telephone: 312-862-2000
|
||
Fax: 312-862-2200
|
10.5
|
WAIVER
|
10.6
|
ENTIRE AGREEMENT AND MODIFICATION
|
10.7
|
ASSIGNMENTS, SUCCESSORS, AND THIRD-PARTY RIGHTS
|
10.8
|
SEVERABILITY
|
10.9
|
SECTION HEADINGS, CONSTRUCTION
|
10.10
|
TIME OF ESSENCE
|
10.11
|
COUNTERPARTS
|
10.12
|
DISCLOSURE LETTERS
|
BUYER:
|
COMPANY:
|
|||||
COASTAL CREDIT MERGER SUB, INC.
|
WHITE RIVER CAPITAL, INC.
|
|||||
By:
|
/s/ Andrew C. Dodson |
By:
|
/s/ John M. Eggemeyer, III | |||
Name:
|
Andrew C. Dodson |
John M. Eggemeyer, III
|
||||
Title:
|
Vice President |
Chief Executive Officer
|
||||
PARENT
:
|
||||||
COASTAL CREDIT HOLDINGS, INC.
|
||||||
By: | /s/ Andrew C. Dodson | |||||
Name:
|
Andrew C. Dodson | |||||
Title:
|
Vice President | |||||
THE COMPANY:
|
White River Capital, Inc.
|
|
6051 El Tordo
|
||
Rancho Santa Fe, CA 92067
|
||
Attn: John M. Eggemeyer, III, Chief Executive Officer
|
||
Telephone: 858-997-6740
|
||
Fax: 858-756-8301
|
||
WITH A COPY TO:
|
Barnes & Thornburg LLP
|
|
11 S. Meridian Street
|
||
Indianapolis, IN 46204
|
||
Attn: Eric R. Moy, Esq.
|
||
Telephone: 317-231-7298
|
||
Fax: 317-231-7433
|
||
GUARANTOR:
|
Parthenon Investors IV, L.P.
|
|
Four Embarcadero Center, Suite 3610
|
||
San Francisco, CA 94111
|
||
Attn: Brian P. Golson
Andrew C. Dodson
|
||
Telephone: 415-913-3900
|
||
Fax: 415-913-3913
|
||
WITH A COPY TO:
|
Kirkland & Ellis LLP
|
|
300 N. LaSalle
|
||
Chicago, Illinois 60654
|
||
Attn: Jeffrey Seifman, P.C.
Shelly M. Hirschtritt, P.C. Tana M. Ryan |
||
Telephone: 312-862-2000
|
||
Fax: 312-862-2200
|
GUARANTOR:
|
|||
PARTHENON INVESTORS IV, L.P.
|
|||
By: PCP Partners IV, L.P.
|
|||
Its: General Partner
|
|||
By: PCP Managers, LLC
|
|||
Its: General Partner
|
|||
By:
|
/s/ Brian P. Golson | ||
Name: Brian P. Golson
|
|||
Title: Managing Member
|
|||
COMPANY:
|
|||
WHITE RIVER CAPITAL, INC.
|
|||
By:
|
/s/ John M. Eggemeyer, III | ||
Name: John M. Eggemeyer, III
|
|||
Title: Chief Executive Officer
|
|
1775 Eye Street NW, Suite 800
Washington, D.C. 20006
|
(i)
|
Reviewed certain publicly-available financial statements and other business and financial information of the Company;
|
(ii)
|
Reviewed certain internal financial statements and other financial data and operating data concerning the Company prepared by the management of the Company;
|
(iii)
|
Reviewed certain financial projections of the Company prepared by the management of the Company;
|
(iv)
|
Discussed the past and current operations, financial condition and prospects of the Company with management of the Company and the management of its subsidiary Coastal Credit, LLC (“Coastal Credit”);
|
(v)
|
Performed various valuation and financial analyses based on the financial projections of the Company prepared by the management of the Company, including illustrative discounted cash flow and future terminal value analyses;
|
(vi)
|
Reviewed the reported prices, trading activity and trading multiples of the Company and other publicly available information of the Company;
|
(vii)
|
Compared the stock price performance, trading activity and trading multiples of the Company to other publicly-traded companies that we deemed generally comparable to the Company;
|
(viii)
|
Compared the financial performance of the Company with that of certain other publicly-traded companies that we believe are generally comparable to the Company;
|
(ix)
|
Reviewed the financial terms, to the extent publicly available, of certain acquisition transactions that we believe are generally comparable to the Merger;
|
(x)
|
Reviewed the execution draft of the Merger Agreement dated November 14, 2012 and certain related documents; and
|
(xi)
|
Performed such other analyses and considered such other factors as we have deemed appropriate.
|
IMPORTANT SPECIAL MEETING INFORMATION |
Electronic Voting Instructions
|
Available 24 hours a day, 7 days a week!
|
|
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
|
|
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR
|
|
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time on February 11, 2013.
|
|
|
Vote by Internet
·
Go to www.investorvote.com
·
Or scan the QR code with your smartphone
·
Follow the steps outlined on the secured website
|
Vote by Telephone
·
Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone
·
Follow the instructions provided by the recorded message
|
Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
|
ý
|
A Voting Items
|
|||||||||
1.
Approval of the Agreement and Plan of Merger dated November 15, 2012 by and among Coastal Credit Holdings, Inc., Coastal Credit Merger Sub, Inc., and White River Capital, Inc. (the “Merger Agreement”), pursuant to which Coastal Credit Merger Sub, Inc. will be merged with and into White River Capital, Inc. (the “Merger”).
The Board of Directors recommends a vote
FOR
this proposal.
|
|||||||||
For
|
Against
|
Abstain
|
|||||||
o
|
o
|
o
|
2.
Approval, on an advisory (non-binding) basis, of the compensation of the named executive officers of White River Capital, Inc. based on or related to the Merger and the agreements and understandings concerning such compensation.
The Board of Directors recommends a vote
FOR
this proposal.
|
||||
For
|
Against
|
Abstain
|
||
o
|
o
|
o
|
3. Approval of the adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes present at the Special Meeting in person or by proxy to approve the Merger Agreement and Merger described in Proposal 1.
The Board of Directors recommends a vote
FOR
this proposal.
|
|||||
For
|
Against
|
Abstain
|
|||
o
|
o
|
o
|
B Non-Voting Items
|
|||||||||||
Change of Address
– Please print new address below.
|
|||||||||||
C Authorized Signatures – This section must be completed for your vote to be counted. – Date and Sign Below
|
|||||||||||
Please sign exactly as your name appears. Joint owners should each sign personally. Where applicable, indicate your official position or representation capacity.
|
Date (mm/dd/yyyy) – Please print date below.
|
Signature 1 – Please keep signature within the box.
|
Signature 2 – Please keep signature within the box.
|
||
|
1 Year White River Capital Chart |
1 Month White River Capital Chart |
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