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Share Name | Share Symbol | Market | Type |
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CAI International Inc | NYSE:CAI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 56.00 | 0 | 01:00:00 |
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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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CAI INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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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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(1)
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Title of each class of securities to which transaction applies:
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(i) Common Stock, par value $0.0001 per share, of CAI International, Inc.; 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.0001 per share, of CAI International, Inc. (the “Series A Preferred Stock”); and (iii) 8.50% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.0001 per share, of CAI International, Inc. (the “Series B Preferred Stock”).
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(2)
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Aggregate number of securities to which transaction applies:
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As of July 6, 2021: (i) 17,357,549 shares of common stock issued and outstanding (including 20,433 shares of common stock that are unvested outstanding restricted stock awards); (ii) 2,199,610 shares of Series A Preferred Stock that will be converted into the right to receive a liquidation preference consisting of $25.00 per share, plus accrued and unpaid dividends; (iii) 1,955,000 shares of Series B Preferred Stock that will be converted into the right to receive a liquidation preference consisting of $25.00 per share, plus accrued and unpaid dividends; (iv) 168,151 shares of common stock issuable pursuant to outstanding awards of stock options with an exercise price below $56.00 per share; (v) 90,697 shares of common stock issuable pursuant to outstanding awards of restricted stock units (the “RSUs”); and (vi) 52,930 shares of common stock issuable pursuant to outstanding awards of performance-based restricted stock units (assuming target achievement of all performance-based vesting criteria) (the “PRSUs”).
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(3)
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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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Solely for the purposes of calculating the filing fee, the maximum aggregate value of the transaction was determined based upon the sum of: (i) 17,357,549 shares of common stock (including 20,433 shares of common stock that are unvested outstanding restricted stock awards) multiplied by $56.00 per share; (ii) 2,199,610 shares of Series A Preferred Stock multiplied by $25.0289 (consisting of the liquidation preference of $25.00 per share, plus $0.0289 per share of accrued and unpaid dividends on such Series A Preferred Stock as of July 6, 2021); (iii) 1,955,000 shares of Series B Preferred Stock multiplied by $25.0289 (consisting of the liquidation preference of $25.00 per share, plus $0.0289 per share of accrued and unpaid dividends on such Series B Preferred Stock as of July 6, 2021); (iv) 168,151 shares of common stock issuable pursuant to outstanding awards of stock options with an exercise price below $56.00 per share, multiplied by $38.11 per share (which is the difference between $56.00 and the weighted average per share exercise price of such stock options); (v) 90,697 shares of common stock issuable pursuant to outstanding awards of RSUs multiplied by $56.00; and (vi) 52,930 shares of common stock issuable pursuant to outstanding awards of PRSUs (assuming target achievement of all performance-based vesting criteria) multiplied by $56.00.
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In accordance with Exchange Act Rule 0-11, as amended, the filing fee of $118,969.13 was determined by multiplying the proposed maximum aggregate value of the transaction of $1,090,459,408.84 by 0.0001091.
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(4)
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Proposed maximum aggregate value of transaction:
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$1,090,459,408.84
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(5)
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Total fee paid:
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$118,969.13
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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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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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(i)
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adopt the Merger Agreement (the “Merger Proposal”);
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(ii)
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adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and
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(iii)
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approve, on a non-binding, advisory basis, certain compensation that will be, or may become, payable to our named executive officers in connection with the Merger.
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(1)
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“FOR” the adoption of the Merger Agreement;
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“FOR” the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and
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“FOR” the approval, on a non-binding, advisory basis, of certain compensation that will be, or may become, payable to our named executive officers in connection with the Merger.
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Sincerely,
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Timothy B. Page
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President and Chief Executive Officer, Chief Financial Officer and Director
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1.
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To consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of June 17, 2021, by and among Mitsubishi HC Capital Inc., a Japanese corporation (“Parent”), Cattleya Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, relating to the proposed acquisition of the Company by Parent (the “Merger Proposal”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of Parent. A copy of the Merger Agreement is attached as Annex A to the proxy statement.
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To consider and vote on a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (the “Adjournment Proposal”).
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To consider and vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will be, or may become, payable to our named executive officers in connection with the Merger (the “Compensation Proposal”).
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“FOR” the Merger Proposal;
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(2)
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“FOR” the Adjournment Proposal; and
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(3)
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“FOR” the Compensation Proposal.
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By Order of the Board of Directors,
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Timothy B. Page
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President and Chief Executive Officer, Chief Financial Officer and Director
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Annexes
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•
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each share of common stock that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares (as defined in “The Merger—Merger Consideration” beginning on page 36)) will cease to be outstanding and will be converted into the right to receive $56.00, in cash, without interest, subject to deductions of any applicable withholding taxes (the “Common Merger Consideration”);
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each share of Series A Preferred Stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (i) the liquidation preference of $25.00 per share; plus (ii) the aggregate amount of all accrued and unpaid dividends on such Series A Preferred Stock as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes (the “Series A Merger Consideration”); and
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each share of Series B Preferred Stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (i) the liquidation preference of $25.00 per share; plus (ii) the aggregate amount of all accrued and unpaid dividends on such Series B Preferred Stock as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes (the “Series B Merger Consideration”).
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each stock option that was granted pursuant to the CAI International, Inc. 2007 Equity Incentive Plan, as amended from time to time or the CAI International, Inc. 2019 Incentive Plan, as amended from time to time (each, an “Equity Incentive Plan” and collectively, the “Equity Incentive Plans”), that remains outstanding immediately prior to the Effective Time (each, an “Option”) that has a per share exercise price that is less than $56.00, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of common stock subject to such Option multiplied by (y) the excess of the Common Merger Consideration over the applicable per share exercise price of the Option (the “Option Merger Consideration”), subject to any applicable withholding taxes; and
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each Option that has a per share exercise price that is equal to or greater than $56.00 will, to the extent not exercised as of immediately prior to the Effective Time, be automatically cancelled at the Effective Time with no payment made therefor and will cease to represent a right to purchase shares of common stock.
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the approval of the holders of a majority the outstanding shares of common stock entitled to vote at the Special Meeting as of the Record Date (the “Stockholder Approval”) having been obtained;
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any waiting period applicable to the consummation of the Merger under the HSR Act and the laws of other applicable countries pertaining to pre-merger notification having expired, been terminated or otherwise concluded in a manner favorable to the Merger (without the imposition of a Burdensome Condition (as defined in “The Merger Agreement—Filings and Efforts to Consummate the Merger” beginning on page 97));
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the absence of certain governmental proceedings;
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the receipt and obtainment of all Key Contract Consents and the Migration will not cause any default under certain contracts for which the Key Contract Consents have not been obtained; and
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the taking or obtainment, as applicable, of all actions, consents or permissions required prior to the Migration Commencement Time.
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the accuracy of the representations and warranties of the Company, subject to certain exceptions (including, but not limited to, material adverse effect qualifications regarding their accuracy and matters contained in the disclosure schedule delivered by the Company to Parent at or before the execution and delivery by the Company of the Merger Agreement (the “Company Disclosure Schedule”));
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the Company performing each of its material obligations required to be performed by it under the Merger Agreement; and
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since the date of the Merger Agreement and prior to the Migration Commencement Time, there having not occurred any fact, circumstance, occurrence, effect, change, event or development that has had a Company Material Adverse Effect (as defined in “The Merger Agreement—Material Adverse Effect Definitions” beginning on page 89).
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the accuracy of the representations and warranties of each of Parent and Merger Sub, subject to certain exceptions (including, but not limited to, material adverse effect qualifications regarding their accuracy); and
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each of Parent and Merger Sub performing all material obligations required to be performed by each of Parent and Merger Sub under the Merger Agreement at or prior to the Bring-Down Date.
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the accuracy of the representations and warranties of the Company, subject to certain exceptions (including, but not limited to, material adverse effect qualifications regarding their accuracy and matters contained in the Company Disclosure Schedule);
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the Company performing each of its material obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date or the Effective Time; and
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the parties having received from the applicable governmental authorities reasonably satisfactory evidence of the completion of the Migration pursuant to the applicable laws of Barbados, Bermuda and Delaware, (ii) the Migration having occurred with respect to each of the Migrating Subsidiaries and (iii) the having made the Migration Filings in accordance with the terms of the Merger Agreement.
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the accuracy of the representations and warranties of each of Parent and Merger Sub, subject to certain exceptions (including, but not limited to, material adverse effect qualifications regarding their accuracy); and
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each of Parent and Merger Sub performing in all material respects all material obligations required to be performed by each of Parent and Merger Sub under the Merger Agreement at or prior to the Closing Date or the Effective Time.
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Treatment of Company Equity Awards. Certain of our directors and executive officers hold equity awards, the treatment of which is described in “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger—Treatment of Options, RSUs, PRSUs and RSAs” beginning on page 65;
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Severance Benefits. Our named executive officers are entitled to certain severance benefits under their respective pre-existing employment or service agreements with us if their employment terminates in certain circumstances, which are described in “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger—Employment Agreements and Service Agreement” beginning on page 67;
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Employment Arrangements with Parent. Certain of our officers, including our named executive officers (collectively, the “Key Executives”), have entered into binding term sheets with Parent (each, a “Term Sheet” and, collectively, the “Term Sheets”), pursuant to which, among other things, such officers are expected to continue their employment following the day on which the closing of the Merger (the “Closing”) occurs (the “Closing Date”) and, in certain cases, receive increased salaries, as well as certain cash bonus retention awards that are subject to vesting, in each chase, as further described in “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger—Employment Arrangements with Parent” beginning on page 68; and
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Indemnification Rights. Our directors and executive officers are entitled to continued indemnification pursuant to the Merger Agreement, our organizational documents and certain indemnification agreements, as well as directors’ and officers’ liability insurance, which is described in “The Merger— Interests of the Company’s Directors and Executive Officers in the Merger—Insurance and Indemnification of Directors and Executive Officers” beginning on page 71.
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•
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solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Alternative Proposal or the making of any proposal that could reasonably be expected to lead to any Alternative Proposal; or
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subject to certain exceptions described below, (i) engage in any discussions with, or provide non-public information relating to the Company or any subsidiary to, any third party that is seeking to make, has made or could reasonably be expected to make, an Alternative Proposal, (ii) except where the Board (or a committee thereof) makes a good faith determination, after consultation with outside legal counsel and its financial advisor, that the failure to do so would be inconsistent with its fiduciary duties under applicable law, grant any waiver under any standstill agreement with respect to any class of equity securities of the Company or any of its subsidiaries, or (iii) enter into any agreement (including any letter of intent or term sheet) relating to any Alternative Proposal.
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The Board (or any committee thereof) may effect a Company Adverse Recommendation Change in response to an Alternative Proposal if it complies with certain requirements, including, but not limited to, complying with its obligations set forth in “—Alternative Proposals,” providing Parent at least four business days prior written notice of its intent to make a Company Adverse Recommendation Change, negotiating with Parent in good faith to make adjustments in the terms and conditions of the Merger Agreement so that the Alternative Proposal leading to the proposed Company Adverse Recommendation Change ceases to constitute a Superior Proposal, providing Parent with notice of any material amendments or material proposed amendments as to price and other material terms thereof, determining in good faith, after consulting with outside legal counsel and the Company’s financial advisor, that such Alternative Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Parent to the terms and conditions of the Merger Agreement, and, in the case of a Company Adverse Recommendation Change in connection with the Company’s entry into, or public announcement of its
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The Board (or any committee thereof) may effect a Company Adverse Recommendation Change in response to an Intervening Event (as defined in “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events” beginning on page 93) if it complies with certain procedures, including, but not limited to, promptly notifying Parent, privately and in writing, at least two business days (the “Company Adverse Recommendation Notice Period”) before effecting the Company Adverse Recommendation Change, and which notice must include a reasonably detailed description of the underlying facts giving rise to the Intervening Event, and the reasons for taking, such action and negotiating in good faith with Parent during the Company Adverse Recommendation Notice Period to make such adjustments to the Merger Agreement so that the underlying facts giving rise to, and the reasons for taking such action, cease to constitute an Intervening Event, if Parent, in its discretion, proposes in good faith to make such adjustments. Furthermore, the Board must determine in good faith, after consulting with outside legal counsel and its financial advisor and taking into account any adjustments made by Parent during the Company Adverse Recommendation Notice Period, that the failure to effect such Company Adverse Recommendation Change would be inconsistent with its fiduciary duties under applicable law. For more information, please see “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events” beginning on page 93).
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•
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by mutual written consent of Parent and the Company;
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by either Parent or the Company:
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subject to certain conditions, if the Merger has not been consummated on or before February 28, 2022 (or such later date as agreed to by the parties) (the “End Date”) (the “End Date Termination Provision”);
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subject to certain conditions, if any governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced, or entered any law or order making illegal, permanently enjoining, or otherwise permanently prohibiting the consummation of the Merger or the other transactions contemplated thereby, and such law or order has become final and nonappealable; or
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if the Stockholder Approval has not been obtained at the Special Meeting (unless such Special Meeting has been adjourned or postponed, in which case at the final adjournment or postponement thereof); provided that in the event the Board has made a Company Adverse Recommendation Change, the Company may only terminate the Merger Agreement pursuant to this sub-bullet if it has paid the Termination Fee to Parent (the “Stockholder Approval Termination Provision”).
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•
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by the Company:
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○
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if prior to the receipt of the Stockholder Approval the Board (or a committee thereof) authorizes the Company, in accordance with the terms of the Merger Agreement, to enter into a Company Acquisition Agreement (as defined in “The Merger Agreement— Alternative Proposals; Change in Recommendation; Intervening Events” beginning on page 93) in respect of a Superior Proposal; provided, that the Company substantially concurrently enters into such Company Acquisition Agreement and pays the Termination Fee to Parent (the “Superior Proposal Termination Provision”);
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subject to certain conditions, if there has been a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in the Merger Agreement such that certain of the Company’s conditions to the occurrence of the Migration Commencement Time or to the Closing of the Merger would not be satisfied and, in any such case, such breach is incapable of being cured by the End Date;
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if (i) all of the conditions set forth in “The Merger Agreement—Conditions to the Contribution, Migration Filings and Merger—Conditions to Each Party’s Obligation to Effect the Merger”
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if the Merger has not been consummated within 70 days of the later of (i) the earliest date on which the Contribution is permitted to be made pursuant to the terms of the Merger Agreement and (ii) the date of the Contribution.
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•
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by Parent (with any termination by Parent also being an effective termination by Merger Sub):
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if (i) a Company Adverse Recommendation Change has occurred or (ii) after public announcement of an Alternative Proposal, the Board has failed to reaffirm the Board Recommendation within 10 business days after the receipt of any written request to do so from Parent, provided that Parent may only make such request once with respect to any particular Alternative Proposal or any material publicly announced amendment or modification thereto, or (iii) the Company or the Board has breached its obligations regarding the Special Meeting (as discussed in “The Merger Agreement—Proxy Statement and Special Meeting” beginning on page 93) or the restrictions on its ability to solicit, initiate, facilitate or encourage Alternative Proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding Alternative Proposals (as discussed in “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events” beginning on page 93) in any material respect; provided that Parent will not have the right to terminate the Agreement pursuant to this bullet after the Stockholder Approval is obtained (the “Parent Termination Provision”); or
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subject to certain conditions, if there has been a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in the Merger Agreement such that certain of Parent’s and Merger Sub’s conditions to the occurrence of the Migration Commencement Time or to the occurrence of the Merger would not be satisfied and, in any such case, such breach is incapable of being cured by the End Date.
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•
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by Parent because a Company Adverse Recommendation Change has occurred or the Company has breached its obligations regarding the matters set forth in “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events” beginning on page 93;
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•
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by the Company, prior to the receipt of the Stockholder Approval, enter into a Company Acquisition Agreement in respect of a Superior Proposal;
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•
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the Company or Parent terminate the Merger Agreement pursuant to the Stockholder Approval Termination Provision and the Board has made a Company Adverse Recommendation Change; or
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•
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if (i) the Merger Agreement is terminated by Parent or the Company pursuant to the End Date Termination Provision or the Stockholder Approval Termination Provision, (ii) prior to the time of the Special Meeting (or adjournment or postponement thereof) at which at vote was taken to adopt the Merger Agreement but the Stockholder Approval was not obtained, an Alternative Proposal has been publicly made, commenced, submitted or announced and not publicly and irrevocably withdrawn at least five business days prior to such Special Meeting and (iii) the Company consummates a transaction with respect to any Alternative Proposal
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Q:
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Why am I receiving this proxy statement and proxy card or voting instruction form?
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A:
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On June 17, 2021, the Company entered into the Merger Agreement providing for the merger of Merger Sub, a wholly-owned subsidiary of Parent, with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent. You are receiving this proxy statement and form of proxy card or voting instruction form in connection with the solicitation of proxies by the Board in favor of the Merger Proposal and the other matters to be voted on at the Special Meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares with respect to those matters.
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Q:
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What is the proposed transaction?
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The proposed transaction is the merger of Merger Sub with and into the Company pursuant to the Merger Agreement. Following the Effective Time, the Company would be privately held as a wholly-owned subsidiary of Parent.
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Q:
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What will I receive in the Merger?
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A:
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If the Merger is completed, you will be entitled to receive $56.00, in cash, without interest, subject to deductions of any applicable withholding taxes, for each share of our common stock that you own. For example, if you own 100 shares of common stock, you will be entitled to receive $5,600, in cash in exchange for your shares of common stock, without interest, subject to deductions of any applicable withholding taxes. In addition, the holders our Preferred Stock will receive the liquidation preference of $25.00 per share plus the aggregate amount of all accrued and unpaid dividends on such Preferred Stock that they own as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes. Neither you, nor the holders of our Preferred Stock, will be entitled to receive shares in the surviving corporation or in Parent.
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What will the holders of Options, RSUs, PRSUs, RSAs and ESPP Rights receive in the Merger?
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The Board has taken such actions as are necessary to cause (i) the performance conditions of each PRSU to be deemed satisfied at 100% of the relevant target level of achievement (notwithstanding any contrary provision in any agreement or document governing or evidencing the relevant PRSU) and (ii) each Option, PRSU, RSU and RSA to become fully vested and free of any applicable forfeiture restrictions, in each of clauses (i) and (ii), effective as of immediately prior to the Effective Time.
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each Option that has a per share exercise price that is less than the Common Merger Consideration, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of common stock subject to such Option multiplied by (y) the excess of $56.00 over the applicable per share exercise price of the Option, subject to any applicable withholding taxes;
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each Option that has a per share exercise price that is equal to or greater than $56.00 will, to the extent not exercised as of immediately prior to the Effective Time, be automatically cancelled at the Effective Time with no payment made therefor and will cease to represent a right to purchase shares of common stock;
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each RSU and PRSU will be cancelled and automatically converted at the Effective Time into the right to receive $56.00, in cash, without interest, for each share of common stock subject to the RSU or PRSU, subject to any applicable withholding taxes; and
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each RSA will become fully vested and free of any applicable forfeiture restrictions, effective as of immediately prior to the Effective Time and each such share of common stock will cease to be outstanding and will be converted into the right to receive $56.00, in cash, without interest, subject to any applicable withholding taxes.
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Q:
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How does the Common Merger Consideration compare to the market price of the common stock?
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A:
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The relationship of the Common Merger Consideration to the trading price of our common stock on the NYSE constituted a premium of approximately (i) 47% over the closing share price of our common stock on the NYSE on June 17, 2021, the last trading day prior to the date the Merger Agreement was publicly announced, and (ii) 31% over the volume weighted average price of our common stock on the NYSE during the 60 trading days up to, and including, June 17, 2021.
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Where and when is the Special Meeting?
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The Special Meeting will take place on [•], 2021, at [•], Pacific Time. The Special Meeting will be held entirely online live via audio webcast due to the public health impact of the COVID-19 pandemic and to support the health and well-being of our directors, employees, stockholders, and other stakeholders. You will be able to attend and participate in the Special Meeting online by visiting www.virtualshareholdermeeting.com/CAI2021SM, where you will be able listen to the Special Meeting live, submit questions, and vote. Please note that the Special Meeting will not be held at a physical location and you will not be able to attend the Special Meeting by your physical presence. The Special Meeting will begin promptly at [•], Pacific Time. Online check-in will begin at [•], Pacific Time, and you should allow ample time for the online check-in procedures.
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May I attend the Special Meeting and vote via the Virtual Special Meeting Website? What do I need in order to be able to attend the Special Meeting online?
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Yes. All common stockholders of record as of the Record Date or their duly authorized proxies may attend the Special Meeting and vote via the Virtual Special Meeting Website. Beneficial owners of shares are invited to attend the Special Meeting via the Virtual Special Meeting Website.
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Who is entitled to vote at the Special Meeting?
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Holders of the outstanding shares of common stock as of the Record Date are entitled to notice of, and to vote at, the Special Meeting. Each share of common stock is entitled to one vote per share. Therefore, a total of [•] votes are eligible to be cast at the Special Meeting.
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What matters will be voted on at the Special Meeting?
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You will be asked to consider and vote on the following proposals:
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to adopt the Merger Agreement;
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adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting; and
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approve, on a non-binding, advisory basis, certain compensation that will be, or may become, payable to our named executive officers in connection with the Merger.
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What vote of our common stockholders is required to approve the Merger Proposal?
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Under the DGCL, stockholders holding at least a majority of the outstanding shares of common stock entitled to vote at the Special Meeting on the Record Date must affirmatively vote “FOR” the Merger Proposal. In addition, under the Merger Agreement, the receipt of such required vote is a condition to the consummation of the Merger. A failure to vote your shares, an abstention from voting or a broker non-vote will have the same effect as a vote “AGAINST” the Merger Proposal. Because none of the proposals to be voted on at the Special Meeting are routine matters for which brokers may have discretionary authority to vote, we do not expect any broker non-votes at the Special Meeting.
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What vote is required to approve each of the Adjournment Proposal and the Compensation Proposal?
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Approval of each of the Adjournment Proposal and the Compensation Proposal requires the affirmative vote of a majority of the shares present in person (including by means of remote communication) or represented by proxy and entitled to vote on such proposal at the Special Meeting as of the Record Date.
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What is “Merger-related compensation”?
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“Merger-related compensation” is certain compensation that is based on or otherwise relates to the Merger and may become payable to our named executive officers under our existing plans or agreements, which is the subject of the Compensation Proposal. See “Proposal 3: Advisory Vote on Merger-Related Named Executive Officer Compensation” beginning on page 109.
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Why am I being asked to cast a non-binding, advisory vote to approve “Merger-related compensation” payable to CAI’s named executive officers under its plans or agreements?
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In accordance with the rules promulgated under Section 14A of the Exchange Act, we are providing you with the opportunity to cast a non-binding, advisory vote on the compensation that may be payable to our named executive officers in connection with the Merger.
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What will happen if the common stockholders do not approve the Compensation Proposal at the Special Meeting?
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Approval of the Compensation Proposal is not a condition to the completion of the Merger. The vote with respect to the Compensation Proposal is on an advisory basis and will not be binding on CAI or Parent. Further, the underlying compensation plans and agreements are contractual in nature and are not, by their terms, subject to stockholder approval. Accordingly, payment of the “Merger-related compensation” is not contingent on common stockholder approval of the Compensation Proposal.
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How many votes am I entitled to cast for each share that I own?
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Each share of common stock is entitled to one vote per share.
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What is a quorum?
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A quorum is necessary to hold a valid Special Meeting. A quorum will be present if holders of a majority of the issued and outstanding shares of common stock entitled to vote at the Special Meeting on the Record Date are represented via the Virtual Special Meeting Website or by proxy, regardless of whether the proxy has authority to vote on the Merger Proposal. If a quorum is not present at the Special Meeting, the Special Meeting may be adjourned or postponed from time to time until a quorum is obtained.
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How does the Board recommend that I vote?
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The Board unanimously recommends that our common stockholders vote “FOR” the Merger Proposal, “FOR” the Adjournment Proposal and “FOR” the Compensation Proposal.
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Why is the Board recommending that I vote “FOR” the Merger Proposal?
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After careful consideration and after consultation with the Company’s legal and financial advisors, the Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to and in the best interests of the Company and its stockholders on the terms and conditions set forth in the Merger Agreement; (ii) adopted resolutions approving and declaring the advisability of the Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and conditions set forth in the Merger Agreement; and (iii) adopted resolutions recommending that the stockholders of the Company entitled to vote adopt the Merger Agreement and directing that the Merger Agreement and the transactions contemplated thereby, including the Merger, be submitted to the stockholders of the Company entitled to vote for adoption. In reaching its decision to approve the Merger Agreement and to unanimously recommend approval of each of the Merger Proposal, the Adjournment Proposal and the Compensation Proposal, the Board consulted with our management, as well as the Company’s legal and financial advisors, and considered the terms of the Merger Agreement. The Board also considered each of the items set forth under “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 53.
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What effects will the Merger have on the Company?
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Our common stock is currently registered under the Exchange Act and is quoted on the NYSE under the symbol “CAI.” In addition, our Series A Preferred Stock and our Series B Preferred Stock are currently registered under the Exchange Act and quoted on the NYSE under the symbols “CAI-PA” and “CAI-PB,” respectively. As a result of the Merger, the Company will cease to be a publicly traded company and will be wholly-owned by Parent. Following the consummation of the Merger, the registration of our common stock (and our Preferred Stock) and our reporting obligations under the Exchange Act will be terminated. In addition, upon the consummation of the Merger, our common stock (and our Preferred Stock) will no longer be listed on any stock exchange or quotation system, including the NYSE.
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What happens if the Merger is not consummated?
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If the Merger Proposal is not approved by the required vote of our common stockholders, or if the Merger is not consummated for any other reason, our stockholders will not receive any payment for their shares in connection with the Merger. Instead, we will remain an independent public company and shares of our common stock (and Preferred Stock) will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will continue to file periodic and current reports with the SEC. In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, among other things, the risks described in the risk factors included in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 1, 2021, which is incorporated by reference herein, as updated by our subsequent filings with the SEC.
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What do I need to do now? How do I vote my shares?
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We urge you to read this proxy statement carefully, including its annexes and the documents referred to, or incorporated by reference, in this proxy statement, and to consider how the Merger affects you. Your vote is important. If you are a common stockholder of record, that is, if your shares are registered in your name with Computershare Trust Company, N.A., our transfer agent, there are four ways to vote:
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by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;
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by visiting the Internet at the address on your proxy card;
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by calling toll-free (within the U.S. or Canada) the phone number on your proxy card; or
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by attending the Special Meeting and voting via the Virtual Special Meeting Website (however, simply attending the Special Meeting will not cause your shares to be voted).
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What happens if I do not vote?
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The vote on the Merger Proposal is based on the total number of outstanding shares of common stock entitled to vote at the Special Meeting as of the Record Date, not just the shares that are voted. If you do not vote, it will have the same effect as a vote “AGAINST” the Merger Proposal.
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Should I send in my stock certificates or other evidence of ownership now?
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No. If you hold your shares in certificated form and in your name as a stockholder of record, then shortly after the Merger is completed, you will receive a letter of transmittal from the paying agent for the Merger with detailed written instructions for exchanging your shares for the applicable Merger Consideration. If your shares are held in “street name” by your broker, bank, trustee or other nominee, you may receive instructions from your broker, bank, trustee or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the applicable Merger Consideration. Do not send in your certificates, if any, now or with your proxy card.
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I hold my shares in certificated form but do not know where my stock certificate is—how will I get the applicable Merger Consideration for my shares?
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If the Merger is completed, the transmittal materials you will receive after the completion of the Merger will include the procedures that you must follow if you cannot locate your stock certificate, including signing an affidavit attesting to the loss of your stock certificate. The paying agent may also require that you provide a bond in customary amount or an indemnity agreement in order to cover any potential loss.
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What happens if I sell my shares before completion of the Merger?
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If you transfer your shares, you will have transferred your right to receive the applicable Merger Consideration in the Merger. In order to receive the applicable Merger Consideration, you must hold your shares through completion of the Merger.
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Am I entitled to exercise appraisal rights instead of receiving the applicable Merger Consideration for my shares?
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Dissenting stockholders of record, which includes both holders of shares of common stock and Preferred Stock, as applicable, as registered in the records of the Company, who do not vote in favor of the Merger Proposal (to the extent they are entitled to vote on the Merger Proposal) and otherwise comply with the requirements of Section 262 of the DGCL are entitled to statutory appraisal rights under Delaware law in connection with the Merger. This means that if you comply with the requirements of Section 262 of the DGCL, you are entitled to have the “fair value” (as defined pursuant to Section 262 of the DGCL, which is reproduced in its entirety as Annex C to this proxy statement) of your shares determined in accordance with Delaware law and to receive payment based on that valuation instead of receiving the applicable Merger Consideration. The ultimate amount you would receive in an appraisal proceeding may be more than, the same as or less than the amount you would have received under the Merger Agreement. Failure to strictly comply with Section 262 of the DGCL may result in your waiver of, or inability to exercise, appraisal rights. See “The Merger—Appraisal Rights” beginning on page 72 and the text of the Delaware appraisal rights statute, Section 262 of the DGCL, which is reproduced
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
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If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by the Company.
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If my broker holds my shares in “street name,” will my broker vote my shares for me?
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No. Your broker, bank, trustee or other nominee is permitted to vote your shares on any proposal currently scheduled to be considered at the Special Meeting only if you instruct your broker, bank, trustee or other nominee how to vote. You should follow the procedures provided by your broker, bank, trustee or other nominee to vote your shares. Without instructions, your shares will not be voted on such proposals, which will have the same effect as if you voted “AGAINST” the Merger Proposal, but will have no effect on either the Adjournment Proposal or the Compensation Proposal.
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What is a proxy?
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A proxy is your legal designation of another person, which we refer to as a “proxy holder,” to vote your shares. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares is called a “proxy card.” Timothy B. Page, our President and Chief Executive Officer, Chief Financial Officer and Director, and Steven J. Garcia, our Vice President, Chief Legal Officer, are the proxy holders for the Special Meeting, with full power of substitution.
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Can I revoke my proxy?
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Yes. You can revoke your proxy at any time before the vote is taken at the Special Meeting. If you are a common stockholder of record, you may revoke your proxy by notifying the Company’s Secretary in writing at Steuart Tower, 1 Market Plaza, Suite 2400, San Francisco, California 94105, or by submitting a new proxy by telephone, the Internet or mail, in each case, dated after the date of the proxy being revoked. In addition, you may revoke your proxy by attending the Special Meeting and voting via the Virtual Special Meeting Website (however, simply attending the Special Meeting will not cause your proxy to be revoked). Please note that if you hold your shares in “street name” and you have instructed a broker, bank, trustee or other nominee to vote your shares, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank, trustee or other nominee to revoke your voting instructions.
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If a common stockholder gives a proxy, how are the shares voted?
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Regardless of the method you use to vote, the proxy holders will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted “FOR,” “AGAINST” or “ABSTAIN” from voting on all, some or none of the specific items of business to come before the Special Meeting.
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How are votes counted?
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For the Merger Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions and broker non-votes, if any, will have the same effect as votes “AGAINST” this proposal.
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What should I do if I receive more than one set of voting materials?
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Please sign, date and return (or grant your proxy electronically over the Internet or by telephone) each proxy card and voting instruction card that you receive.
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Who will solicit and pay the cost of soliciting proxies?
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We have engaged Georgeson LLC (“Georgeson”) to assist in the solicitation of proxies for the Special Meeting. We estimate that we will pay Georgeson a fee of approximately $20,000 and will reimburse Georgeson for reasonable out-of-pocket expenses and will indemnify it and its affiliates against certain claims, liabilities, losses, damages and expenses. We may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to beneficial owners and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
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Where can I find the voting results of the Special Meeting?
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We intend to publish the final voting results of the Special Meeting in a Current Report on Form 8-K to be filed with the SEC within four business days after the Special Meeting. All reports that we file with the SEC are publicly available when filed. See “Where You Can Find More Information” beginning on page 116.
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Will I have to pay taxes on the applicable Merger Consideration I receive?
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The receipt of cash in exchange for shares pursuant to the Merger generally will be a taxable transaction for U.S. federal income tax purposes. You are urged to read “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 77 for a more detailed discussion of the U.S. federal income tax consequences of the Merger. Because individual circumstances may differ, you are urged to consult your own tax advisors regarding the particular tax consequences to you of the exchange of shares for cash pursuant to the Merger, in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws).
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What is householding and how does it affect me?
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The SEC permits companies to send a single set of proxy materials to any household at which two or more stockholders reside, unless contrary instructions have been received and only if the applicable stockholder provides advance notice and follows certain procedures.
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When do you expect the Merger to be completed?
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We are working toward completing the Merger as quickly as reasonably practicable. Assuming timely satisfaction of necessary closing conditions, including the approval by our common stockholders of the Merger Proposal and completion of the Migration, we currently expect to complete the Merger in the late third quarter or early fourth quarter of 2021. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions, including completion of the Migration, each as described in “The Merger Agreement—Conditions to the Contribution, Migration Filings and Merger” beginning on page 101, many of which are outside of our control.
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If the Merger is completed, how will I receive the cash for my shares?
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If the Merger is completed and you are not exercising appraisal rights and your shares are held in book-entry, the paying agent will issue and deliver to you a check or wire transfer for your shares without any further action on your part. If the Merger is completed and you are not exercising appraisal rights, and you are a stockholder of record with your shares held in certificated form, you will receive a letter of transmittal with instructions on how to send your shares to the paying agent in connection with the Merger. The paying agent will issue and deliver to you a check or wire transfer for your shares after you comply with these instructions. Please do not send your stock certificates with your proxy card. See “The Merger Agreement—Exchange and Payment Procedures” beginning on page 86.
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What happens if the market price of shares of our common stock significantly changes before the Closing?
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Parent is not obligated to change the Common Merger Consideration as a result of a change in the market price of our common stock.
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Do any of the Company’s directors or officers have interests in the Merger that may differ from those of the Company’s stockholders generally?
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In considering the unanimous recommendation of the Board with respect to the Merger Proposal, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of stockholders generally. In (i) evaluating and negotiating the Merger Agreement; (ii) approving and declaring the advisability of the Merger Agreement and the transactions contemplated thereby, including the Merger, on the terms and conditions set forth in the Merger Agreement; and (iii) recommending that the stockholders of the Company entitled to vote adopt the Merger Agreement and directing that the Merger Agreement and the transactions contemplated thereby, including the Merger, be submitted to the stockholders of the Company entitled to vote for adoption, the Board was aware of and considered these interests to the extent that they existed at the time, among other matters. For more information, see “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 65.
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Are there any other risks to me from the Merger that I should consider?
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Yes. There are risks associated with all business combinations, including the Merger. For further details, see “Cautionary Note Regarding Forward-Looking Statements” beginning on page 27.
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Who can help answer my other questions?
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If you have more questions about the Merger, require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please contact Georgeson, which is acting as our proxy solicitor in connection with the Merger.
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submitting a new proxy with a later date, by using the telephone or Internet proxy submission procedures described above, or by completing, signing, dating and returning a new proxy card by mail to the Company;
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attending the Special Meeting and voting via the Virtual Special Meeting Website (however, simply attending the Special Meeting will not cause your proxy to be revoked); or
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delivering to the Secretary of the Company a written notice of revocation to: c/o CAI International, Inc., Steuart Tower, 1 Market Plaza, Suite 2400, San Francisco, California 94105.
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each share of common stock that is issued and outstanding immediately prior to the Effective Time (other than any shares of common stock or Preferred Stock (i) owned by Parent or Merger Sub or any other subsidiary of Parent, (ii) which are held immediately prior to the Effective Time by a stockholder who did not vote in favor of the Merger and who is entitled to demand and properly demands appraisal of such shares pursuant to, and who complies in all respects with, the provisions of Section 262 of the DGCL (“Dissenting Shares”), or (iii) owned by the Company in treasury or by any direct or indirect wholly-owned subsidiary of the Company (collectively, the “Excluded Shares”)) will cease to be outstanding and will be converted into the right to receive $56.00, in cash, without interest, subject to deductions of any applicable withholding taxes (the “Common Merger Consideration”);
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each share of Series A Preferred Stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum
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each share of Series B Preferred Stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (i) the liquidation preference of $25.00 per share; plus (ii) the aggregate amount of all accrued and unpaid dividends on such Series B Preferred Stock as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes.
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each Option that has a per share exercise price that is less than the Common Merger Consideration, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of common stock subject to such Option multiplied by (y) the excess of $56.00 over the applicable per share exercise price of the Option, subject to any applicable withholding taxes; and
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each Option that has a per share exercise price that is equal to or greater than $56.00 will, to the extent not exercised as of immediately prior to the Effective Time, be automatically cancelled at the Effective Time with no payment made therefor and will cease to represent a right to purchase shares of common stock.
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the Board’s understanding of the Company’s business, assets, financial condition, liquidity position and results of operations, its competitive position and historical and prospective performance, and the nature of the industry in which the Company competes.
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the fact that the all-cash Merger Consideration will provide certainty of value and liquidity to stockholders, while eliminating the effect of long-term business and execution risks to stockholders.
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the relationship of the $56.00 per share Common Merger Consideration to the trading price of our common stock on the NYSE, including that the Common Merger Consideration constituted a significant premium of approximately (i) 47% over the closing share price of our common stock on the NYSE on June 17, 2021, the last trading day prior to the date the Merger Agreement was publicly announced, and (ii) 31% over the volume weighted average price of our common stock on the NYSE during the 60 trading days up to, and including, June 17, 2021.
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the relationship of the $56.00 per share Common Merger Consideration to the discounted cash flow net present value of the Company.
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the relationship of the $56.00 per share Common Merger Consideration to public comparable data of price to book value.
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the current and historical market prices of our common stock, including the market performance of our common stock relative to those of other participants in our industry and the general market.
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the evaluation of multiple strategic alternatives and the solicitation of bids from multiple strategic and financial sponsor parties, as discussed under “—Background of the Merger.”
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the Board’s belief that, if any third parties were interested in exploring a transaction with the Company, such potential acquirers were contacted by Centerview or would have been motivated to approach the Company.
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the advantages of entering into the Merger Agreement in comparison with the risks of remaining an independent public company, including, but not limited to, the risks and uncertainties with respect to:
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achieving the Company’s growth plans in light of the current and foreseeable market conditions, including the risks and uncertainties in the U.S. and global economy generally and the Company’s industry specifically, and risks related to the current stage of the economic cycle and macroeconomic challenges that could result in a market downturn in the coming months or years, in each case, especially in light of COVID-19;
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competing with the Company’s competitors in a market with increasing container leasing industry consolidation and container shipping company consolidation as well as the risk that potential opportunities could diminish in the future as the Company’s competitors continue to pursue acquisitions;
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competing for lessees in a market with likely further container shipping company consolidation;
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the increasing importance of operational scale and financial resources in maintaining efficiency and remaining competitive in the container leasing industry;
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achieving projected fiscal year 2021 performance and long-term financial projections as a standalone company is unlikely to result in value to the Company’s stockholders that would exceed, on a present-value basis, the value of the applicable Merger Consideration; and
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the various additional risks and uncertainties that are set forth in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 1, 2021, which is incorporated by reference herein, as updated by our subsequent filings with the SEC.
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our ability to service, pay down or pay off our high debt levels while maintaining our operations and funding current and future capital expenditures.
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its belief, based on discussions and negotiations with Parent, that $56.00 per share was the highest price Parent would be willing to pay.
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the fact that the Company sought out and engaged other potential purchasers and the Board determined that there were no other potential purchasers that would be reasonably likely to engage in a transaction in the near term at a price per share equal to or greater than the price being offered by Parent and on other acceptable terms.
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the extensive arm’s length negotiations with Parent.
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the likelihood that the Merger will be consummated, based on, among other things:
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the Board’s evaluation of the conditions to the Merger;
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that the condition to closing related to the accuracy of the Company’s representations and warranties, is generally subject to a Company Material Adverse Effect qualification, as described under “The Merger Agreement—Representations and Warranties;”
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the absence of a financing condition;
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Parent’s representation that it has and will have sufficient financial resources to pay the aggregate Merger Consideration and consummate the Merger;
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the Board’s and management’s assessment, after discussion with representatives of Centerview, that Parent has the financial capability to complete the Merger;
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that the Company will be permitted to continue to pay quarterly dividends on its Preferred Stock and on its common stock (not to exceed $0.30 per share of common stock per quarter), solely to the extent made on payment dates that correspond to record dates on June 28, 2021, September 27, 2021, and December 27, 2021, between signing and Closing under the Merger Agreement;
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the relative likelihood of obtaining required regulatory approvals;
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the relative likelihood of completing the Migration, including the obtainment of the Migration Contract Consents, within the required timeframe such that the Closing can take place prior to the End Date;
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that the End Date under the Merger Agreement is expected to allow for sufficient time to complete the Merger, obtain required regulatory approvals and complete the Migration;
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the Company’s ability to elect tax treatment that will be neutral to it in the event the Migration is completed, but the Merger is not completed; and
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the remedies available under the Merger Agreement to the Company in the event of a breach by Parent, including, but not limited to, our ability, under certain circumstances pursuant to the Merger Agreement, to seek specific performance to prevent breaches of the Merger Agreement, and to enforce specifically the terms of the Merger Agreement, as described under “The Merger Agreement—Specific Performance.”
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the terms of the Merger Agreement and the related agreements, including, but not limited to:
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the Company’s ability to consider and respond to, under certain circumstances specified in the Merger Agreement, an Alternative Proposal;
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the Board’s right, after complying with the terms of the Merger Agreement, to terminate the Merger Agreement in order to enter into an agreement with respect to a Superior Proposal upon payment of the Termination Fee and the Merger Agreement Expenses, as described under “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events” and “The Merger Agreement—Termination Fees and Treatment of Expenses;” and
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Parent’s obligation to pay the Parent Termination Fee and Merger Agreement Expenses under certain circumstances. For more information, see “The Merger Agreement—Termination Fees and Treatment of Expenses.”
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•
|
that the Merger would be subject to the approval of the Company’s stockholders holding at least a majority of the outstanding shares of common stock to vote at the Special Meeting as of the Record Date, and the stockholders would be free to reject the Merger.
|
•
|
the availability of appraisal rights and payment of fair value under Delaware law to registered holders of shares, and beneficial owners of shares whose nominees follow the required statutory procedures, who timely file a written objection to the Merger Agreement, do not vote in favor of the Merger Proposal (to the extent they are entitled to do so) and comply with all of the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have a Delaware court determine the fair value of their shares, which may be more than, less than, or the same as the amount such stockholders would have received under the Merger Agreement.
|
•
|
the Board’s view that the Merger Agreement was the product of arm’s-length negotiations and contained overall reasonable terms and conditions.
|
•
|
the timing of the Merger and the risk that if the Board did not accept Parent’s offer at the time it was made, the Board might not have had another opportunity to do so.
|
•
|
the opinion of Centerview rendered to the Board on June 17, 2021, which was subsequently confirmed by delivery of a written opinion dated such date that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Common Merger Consideration to be paid to the holders of shares of common stock (other than as specified in such opinion) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below under the caption “—Opinion of Centerview Partners LLC.”
|
•
|
the fact that the announcement and pendency of the Merger, or the risks and costs to the Company if the Merger does not close, could result in the diversion of management and employee attention (including efforts and consequences relating to the Migration), and potentially have a negative effect on the Company’s business and relationships with customers, suppliers and vendors.
|
•
|
the effect of a public announcement of the Company entering into the Merger Agreement on the Company’s operations, stock price and employees and its ability to attract and retain key management and personnel while the Merger is pending.
|
•
|
the fact that stockholders will not participate in any future earnings or growth of the Company and will not benefit from any appreciation in value of the Company, including any appreciation in value that could be realized as a result of improvements to our operations.
|
•
|
the unlikely possibility that Parent will be unable to pay the aggregate Merger Consideration on the Closing Date.
|
•
|
the requirement that the Company pay Parent the Termination Fee of $35.0 million and the Merger Agreement Expenses in an amount not to exceed $5.0 million, upon certain termination circumstances. For more information, see “The Merger Agreement—Termination Fees and Treatment of Expenses.”
|
•
|
the possibility that the amounts that may be payable by the Company upon the termination of the Merger Agreement, as set forth in “The Merger Agreement—Termination Fees and Treatment of Expenses,” could discourage other potential acquirers from making a competing bid to acquire the Company.
|
•
|
the restrictions on the Company’s conduct of business prior to the consummation of the Merger, including the requirement that it conduct its business in the ordinary course, subject to specific limitations, which may delay or prevent the Company from undertaking business opportunities that may arise before the completion of the Merger and that, absent the Merger Agreement, the Company might have pursued.
|
•
|
the fact that an all-cash transaction would be taxable to the Company’s stockholders that are U.S. Holders for U.S. federal income tax purposes.
|
•
|
the fact that under the terms of the Merger Agreement, the Company is unable to solicit other acquisition proposals.
|
•
|
the fact that, by reason of the factors described immediately above, the likelihood of any third party submitting to the Board or the Company (on an unsolicited basis pursuant to the “window shop” exceptions to the Company’s no-solicitation covenant in the Merger Agreement) an Alternative Proposal constituting or reasonably likely to lead to a Superior Proposal is materially diminished.
|
•
|
the risk that, while the Merger is expected to be completed, there can be no assurance that all conditions to the parties’ obligations to complete the Merger, including the Migration, will be satisfied, and as a result, it is possible that the Merger may not be completed even if approved by the Company’s common stockholders.
|
•
|
the risk that the Company is required to complete the Migration as a condition to Parent and Merger Sub’s obligation to close the Merger, and that it is possible that after completing the Migration, Parent could default on its obligation to close the Merger.
|
•
|
the fact that notwithstanding any Company Adverse Recommendation Change, unless the Merger Agreement has been earlier terminated in accordance with the terms thereof, the Merger Agreement will, subject to certain exceptions, be submitted to the Company’s common stockholders at the Special Meeting. For more information, see “The Merger Agreement—Alternative Proposals; Change in Recommendation; Intervening Events.”
|
•
|
the significant costs involved in connection with entering into the Merger Agreement and completing the Merger and the substantial time and effort of the Company’s management required to complete the Merger, which may disrupt the Company’s business operations.
|
•
|
the fact that the Company’s business, operations, financial results and liquidity position could suffer in the event that the Merger is not consummated.
|
•
|
the risk that the Merger might not be completed and the effect of the resulting public announcement of termination of the Merger Agreement on the trading price of the Company’s common stock on the NYSE.
|
•
|
the risk of litigation arising in respect of the Merger Agreement, the Merger, or the other transactions contemplated by the Merger Agreement.
|
•
|
the fact that the completion of the Merger will require antitrust and other regulatory approvals in the United States and certain other countries, including the requirement of Parent and the Company to use their reasonable best efforts to defend through litigation on the merits any claim asserted in any court with respect to the transactions contemplated by the Merger Agreement by the FTC, the DOJ or any other applicable governmental authority.
|
•
|
the risk that the Migration may not be completed within the required timeframe such that the Closing can take place prior to the End Date.
|
•
|
the fact that if the Merger is not consummated and the Migration has been completed, the Company will have to take certain steps in order to modify its legal and tax structure in order to avoid possible negative tax consequences.
|
•
|
the risk that the Company may not obtain the Migration Contract Consents such that the Closing can take place prior to the End Date.
|
•
|
the fact that there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.
|
•
|
a draft of the Merger Agreement dated June 16, 2021, referred to in this summary of Centerview’s opinion as the “Draft Agreement”;
|
•
|
Annual Reports on Form 10-K of the Company for the years ended December 31, 2020, December 31, 2019 and December 31, 2018;
|
•
|
certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company;
|
•
|
certain publicly available research analyst reports for the Company;
|
•
|
certain other communications from the Company to its stockholders; and
|
•
|
certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company, including certain financial forecasts, analyses and projections relating to the Company prepared by management of the Company and furnished to Centerview by the Company for purposes of Centerview’s analysis, which are referred to in this summary of Centerview’s opinion as the “Company Forecasts,” and which are collectively referred to in this summary of Centerview’s opinion as the “Company Internal Data.”
|
•
|
Textainer Group Holdings Limited
|
•
|
Triton International Limited
|
•
|
Selected Public Company Analysis. Using the same P/BV reference range for the Company as described above, Centerview noted the Company’s first quarter 2021 book value, excluding deferred tax liabilities, implied a per share equity value range for each share of common stock of $44.21 to $51.25 per share of common stock.
|
•
|
Historical Stock Price Trading Analysis. Centerview reviewed the historical closing trading prices of the shares of common stock for the 52-week period prior to June 15, 2021, which reflected low and high closing trading prices during such 52-week period of $15.63 to $48.73 per share of common stock.
|
•
|
cost per standard cargo unit (new container pricing) of $2,989 in fiscal year 2021, $2,275 in fiscal year 2022 and $2,100 in each of fiscal years 2023, 2024 and 2025;
|
•
|
average utilization per fiscal year of 99.6% in fiscal year 2021, 98.8% in fiscal year 2022 and 98.0% in each of fiscal years 2023, 2024 and 2025;
|
•
|
base fleet per diem rate per standard cargo unit as of the end of each fiscal year of $0.552 in fiscal year 2021, $0.544 in fiscal year 2022, $0.535 in fiscal year 2023, $0.527 in fiscal year 2024 and $0.520 in fiscal year 2025;
|
•
|
cash on cash return for new investment of 10.5% in each of fiscal years 2021 through 2025;
|
•
|
new finance lease unlevered internal rate of return of 7.5% in each of fiscal years 2021 through 2025;
|
•
|
total container investment per year of:
|
○
|
with respect to the base case, $1,100 million in fiscal year 2021 and $600.0 million in each of fiscal years 2022, 2023, 2024 and 2025; and
|
○
|
with respect to the upside case, $1,300 million in fiscal year 2021 and $700.0 million in each of fiscal years 2022, 2023, 2024 and 2025;
|
•
|
gain on sale of containers of $16.3 million in fiscal year 2021, $9.0 million in fiscal year 2022, $9.5 million in fiscal year 2023, $10.0 million in fiscal year 2024 and $10.5 million in fiscal year 2025;
|
•
|
handling cost as a percentage of total operating lease revenue of 1.0% in each of fiscal years 2021 through 2025;
|
•
|
repair costs as a percentage of total operating lease revenue of 2.0% in each of fiscal years 2021 through 2025;
|
•
|
other expenses as a percentage of total operating lease revenue of 1.5% in each of fiscal years 2021 through 2025; and
|
•
|
depreciation expense per standard cargo unit on new investment of $13.88 in fiscal year 2021, $9.30 in fiscal year 2022 and $8.18 in each of fiscal years 2023, 2024 and 2025.
|
($ in millions)
|
| |
Fiscal Year Ending December 31,
|
||||||||||||
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Net Income to Common Stockholders
|
| |
$129
|
| |
$124
|
| |
$128
|
| |
$144
|
| |
$155
|
Capital Expenditures
|
| |
$(1,124)
|
| |
$(645)
|
| |
$(599)
|
| |
$(600)
|
| |
$(600)
|
After-Tax Levered Free Cash Flow(1)
|
| |
$3
|
| |
$53
|
| |
$71
|
| |
$87
|
| |
$105
|
($ in millions)
|
| |
Fiscal Year Ending December 31,
|
||||||||||||
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Net Income to Common Stockholders
|
| |
$132
|
| |
$132
|
| |
$138
|
| |
$156
|
| |
$169
|
Capital Expenditures
|
| |
$(1,324)
|
| |
$(741)
|
| |
$(699)
|
| |
$(700)
|
| |
$(700)
|
After-Tax Levered Free Cash Flow(1)
|
| |
$3
|
| |
$54
|
| |
$73
|
| |
$91
|
| |
$109
|
(1)
|
After-tax levered free cash flow is a non-GAAP financial measure and was calculated by Centerview as net income to common stockholders, plus depreciation and amortization, capital expenditures, container sales proceeds, net, principal payments, change in debt, deferred taxes, bad debt expense, amortization of debt issuance costs and change in net working capital.
|
•
|
each Option that has a per share exercise price that is less than the Common Merger Consideration, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of common stock subject to such Option multiplied by (y) the excess of $56.00 over the applicable per share exercise price of the Option, subject to any applicable withholding taxes; and
|
•
|
each Option that has a per share exercise price that is equal to or greater than $56.00 will, to the extent not exercised as of immediately prior to the Effective Time, be automatically cancelled at the Effective Time with no payment made therefor and will cease to represent a right to purchase shares of common stock.
|
•
|
the Effective Time is July 6, 2021, the latest practicable date prior to the date of this proxy statement;
|
•
|
the relevant price per share of our common stock is $56.00, which is equal to the Common Merger Consideration;
|
•
|
performance conditions of each PRSU being deemed satisfied at 100% of the relevant target level of achievement (notwithstanding any contrary provision in any agreement or document governing or evidencing the relevant PRSU); and
|
•
|
the number of outstanding unvested Options, RSUs, PRSUs and RSAs held by each named individual is as of July 6, 2021, noting that no Options, RSUs, PRSUs or RSAs have been granted to directors or executive officers between June 17, 2021 and July 6, 2021. The actual number of Options, RSUs, PRSUs and RSAs that will be cancelled and extinguished in exchange for the right to receive the Option Merger Consideration, RSU and PRSU Merger Consideration or RSA Merger Consideration, as applicable, will depend on the number of Options, RSUs, PRSUs and RSAs that are outstanding and unvested, in each case, that are held by such individuals at the actual Effective Time. The following table does not capture vesting that would occur between July 6, 2021 and the Closing or attempt to forecast any grants, dividends, deferrals or forfeitures following the date of this proxy statement.
|
Name
|
| |
Number of
Unvested
Options
(#)
|
| |
Aggregate
Value of
Unvested
Options
($)
|
| |
Number of
Unvested
RSUs
(#)
|
| |
Aggregate
Value of
Unvested
RSUs
($)(1)
|
| |
Number of
Unvested
PRSUs
(#)
|
| |
Aggregate
Value of
Unvested
PRSUs
($)(1)
|
| |
Number of
Unvested
RSAs
(#)
|
| |
Aggregate
Value of
Unvested
RSAs
($)(2)
|
Executive Officers
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Timothy B. Page
|
| |
—
|
| |
—
|
| |
14,873
|
| |
832,888
|
| |
17,441
|
| |
976,696
|
| |
—
|
| |
—
|
Daniel J. Hallahan
|
| |
—
|
| |
—
|
| |
9,708
|
| |
543,648
|
| |
11,622
|
| |
650,832
|
| |
—
|
| |
—
|
Camille G. Cutino
|
| |
—
|
| |
—
|
| |
5,256
|
| |
294,336
|
| |
6,218
|
| |
348,208
|
| |
—
|
| |
—
|
Non-Employee Directors
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Kathryn G. Jackson
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,699
|
| |
207,144
|
Andrew S. Ogawa
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,699
|
| |
207,144
|
David G. Remington
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,302
|
| |
296,912
|
Gary M. Sawka
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,699
|
| |
207,144
|
John H. Williford
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,699
|
| |
207,144
|
|
| |
—
|
| |
—
|
| |
29,837
|
| |
1,670,872
|
| |
35,281
|
| |
1,975,736
|
| |
20,098
|
| |
1,125,488
|
(1)
|
Represents the sum of the number of shares of common stock subject to unvested RSUs or PRSUs, as applicable, multiplied by $56.00.
|
(2)
|
Represents the sum of the number of shares of common stock subject to unvested RSAs, multiplied by $56.00.
|
•
|
50% of the Page Retention Award will vest in two equal tranches, or $365,625 on December 31, 2022, and $365,625 on December 31, 2023; and
|
•
|
50% of the Page Retention Award, or $731,250, will vest upon the completion of the audit of a two-year performance period ending December 31, 2023,
|
•
|
50% of the Hallahan Retention Award will vest in two equal tranches, or $159,305 on December 31, 2022, and $159,305 on December 31, 2023; and
|
•
|
50% of the Hallahan Retention Award, or $318,608, will vest upon the completion of the audit of a two-year performance period ending December 31, 2023,
|
•
|
50% of the Cutino Retention Award will vest in two equal tranches, or $96,562 on December 31, 2022, and $96,563 on December 31, 2023; and
|
•
|
50% of the Cutino Retention Award, or $193,125, will vest upon the completion of the audit of a two-year performance period ending December 31, 2023,
|
•
|
the Effective Time is July 6, 2021, the latest practicable date prior to the date of this proxy statement;
|
•
|
the relevant price per share of our common stock is $56.00, which is equal to the Common Merger Consideration;
|
•
|
performance conditions of each PRSU being deemed satisfied at 100% of the relevant target level of achievement (notwithstanding any contrary provision in any agreement or document governing or evidencing the relevant PRSU);
|
•
|
each such named executive officer’s employment is (i) with respect to Mr. Page and Ms. Cutino, terminated without “Cause” or for “Good Reason;” or (ii) with respect to Mr. Hallahan, terminated for any reason other than in connection with various circumstances that generally constitute a “bad leaver” termination (clause (i) and (ii) together, a “Qualifying Termination”) on July 6, 2021, in each case, immediately following the Effective Time;
|
•
|
that each named executive officer’s base salary rate and annual target bonus remain unchanged from those in effect as of the date of this proxy statement; and
|
•
|
equity awards that are outstanding as of July 6, 2021, remain outstanding through the consummation of the Merger.
|
Name
|
| |
Cash
($)(1)
|
| |
Equity
($)(2)
|
| |
Perquisites /
Benefits
($)(3)
|
| |
Total
($)
|
Timothy B. Page
|
| |
1,281,116
|
| |
1,809,584
|
| |
61,585
|
| |
3,152,285
|
Daniel J. Hallahan(4)
|
| |
596,069
|
| |
1,194,480
|
| |
—
|
| |
1,790,549
|
Camille G. Cutino
|
| |
689,719
|
| |
642,544
|
| |
36,279
|
| |
1,368,542
|
(1)
|
The amounts in this column represent aggregate cash severance payments that Messrs. Page and Hallahan and Ms. Cutino would be entitled to receive pursuant to their respective employment or service agreements upon a “double-trigger” Qualifying Termination in connection with or within 24 months following a “Change in Control” or “Change of Control,” in each case, as applicable, which consist of the following:
|
Name
|
| |
Cash
Severance
Payments
($)
|
| |
Annual
Bonus
Payment
($)
|
| |
Total
($)
|
Timothy B. Page
|
| |
1,100,000
|
| |
181,116
|
| |
1,281,116
|
Daniel J. Hallahan
|
| |
424,757
|
| |
171,312
|
| |
596,069
|
Camille G. Cutino
|
| |
618,000
|
| |
71,719
|
| |
689,719
|
(2)
|
The amounts in this column represent the aggregate applicable Merger Consideration that each named executive officer would receive with respect to Options, RSUs and PRSUs for which vesting is accelerated in connection with the Merger, calculated by (i) with respect to in-the-money Options, multiplying the number of each such Option by the Common Merger Consideration less the applicable per share exercise price of such Option and (ii) with respect to RSUs and PRSUs, multiplying the number of such RSUs or PRSUs by the Common
|
Name
|
| |
Number of
Options
(#)
|
| |
Aggregate
Value of
Options
($)(a)
|
| |
Number of
RSUs
(#)
|
| |
Aggregate
Value of
RSUs
($)(b)
|
| |
Number of
PRSUs
(#)
|
| |
Aggregate
Value of
PRSUs
($)(b)
|
Executive Officers
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Timothy B. Page
|
| |
—
|
| |
—
|
| |
14,873
|
| |
832,888
|
| |
17,441
|
| |
976,696
|
Daniel J. Hallahan
|
| |
—
|
| |
—
|
| |
9,708
|
| |
543,648
|
| |
11,622
|
| |
650,832
|
Camille G. Cutino
|
| |
—
|
| |
—
|
| |
5,256
|
| |
294,336
|
| |
6,218
|
| |
348,208
|
(a)
|
Represents the sum of (x) the aggregate number of shares of common stock subject to unvested Options that have a per share exercise price that is less than the Common Merger Consideration multiplied by (y) the excess of $56.00 over the applicable per share exercise price of the Option.
|
(b)
|
Represents the sum of the number of shares of common stock subject to unvested RSUs or PRSUs, as applicable, multiplied by $56.00.
|
(3)
|
With respect to each of Mr. Page and Ms. Cutino, this amount represents “double trigger” COBRA health benefits for whichever of the following periods is the shortest: (A) the longer of (i) the remaining term of such named executive officer’s employment agreement or (ii) 18 months following the applicable date of termination; or (B) until such named executive officer is no longer entitled to COBRA continuation coverage under the Company’s group health plans, that such named executive officer may become entitled to receive under their respective employment agreement upon a Qualifying Termination. See “—Employment Agreements and Service Agreement.” Mr. Hallahan is not entitled to any perquisites or benefits under the Hallahan Employment Agreement in connection with a Qualifying Termination.
|
(4)
|
For Mr. Hallahan, all dollar amounts in the tables and footnotes above were converted from pound sterling to U.S. dollars using an exchange rate of 1.3806 as of July 6, 2021.
|
•
|
to the extent you are entitled to vote, you must NOT vote “FOR,” or otherwise consent in writing to, the Merger Proposal. Because a proxy that is signed and submitted but does not otherwise contain voting instructions will, unless revoked, be voted in favor of the Merger Proposal, if you submit a proxy and wish to exercise your appraisal rights, you must include voting instructions to vote your shares “AGAINST,” or as an abstention with respect to, the Merger Proposal;
|
•
|
you must continuously hold your shares of common stock and/or Preferred Stock from the date of making the demand through the Effective Time. You will lose your appraisal rights if you transfer your shares of common stock and/or Preferred Stock before the Effective Time;
|
•
|
prior to the taking of the vote on the Merger Proposal at the Special Meeting, you must deliver a proper written demand for appraisal of your shares of common stock and/or Preferred Stock; and
|
•
|
you, another stockholder, an appropriate beneficial owner or the surviving corporation must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of your shares of common stock and/or Preferred Stock within 120 days after the Effective Time. The surviving corporation is under no obligation to file any such petition in the Delaware Court of Chancery and has no intention of doing so. Accordingly, it is the obligation of stockholders to initiate all necessary action to properly demand their appraisal rights in respect of shares of common stock and/or Preferred Stock, as applicable, within the time prescribed in Section 262 of the DGCL.
|
•
|
a citizen or individual resident of the United States;
|
•
|
a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
|
•
|
a trust if (i) a court within the United States is able to exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or
|
•
|
an estate the income of which is subject to U.S. federal income tax regardless of its source.
|
•
|
gain on such shares is effectively connected with the Non-U.S. Holder’s conduct of a U.S. trade or business (and, if required by any applicable income tax treaty, is attributable to a United States permanent establishment or fixed base of the Non-U.S. Holder);
|
•
|
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year in which the Merger occurs and certain other conditions are satisfied; or
|
•
|
the Company is or has been a U.S. real property holding corporation (“USRPHC”) as defined in Section 897 of the Code at any time during the five-year period preceding the Merger or, if shorter, the Non-U.S. Holder’s holding period for its shares of our capital stock, as applicable, and one of the circumstances below applies to you.
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shares held by Parent or Merger Sub or any other subsidiary of Parent, which shares will be automatically cancelled without consideration;
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shares held immediately prior to the Effective Time of the Merger by a stockholder who did not vote in favor of the Merger and who is entitled to demand and has properly demanded appraisal of such shares pursuant to, and who have complied in all respects with, the provisions of Section 262 of the DGCL, and which shares will be entitled to payment of the fair value of such shares as may be determined to be due to such holders pursuant to Section 262 of the DGCL (unless and until such holder has failed to perfect or has effectively withdrawn or lost rights of appraisal under Section 262 of the DGCL); and
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treasury shares owned directly by the Company or any direct or indirect wholly-owned subsidiary of the Company, which shares will be automatically cancelled without consideration (collectively, the “Excluded Shares”).
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each Option that has a per share exercise price that is less than $56.00, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate number of shares of common stock subject to such Option multiplied by (y) the excess of $56.00 over the applicable per share exercise price of the Option (the “Option Merger Consideration”), subject to any applicable withholding taxes; and
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each Option that has a per share exercise price that is equal to or greater than $56.00 will, to the extent not exercised as of immediately prior to the Effective Time, be automatically cancelled at the Effective Time with no payment made therefor and will cease to represent a right to purchase shares of common stock.
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corporate matters related to the Company and its subsidiaries, such as due organization and good standing;
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qualification to conduct business, corporate power and authority to carry on the Company’s businesses, and to enter into the Merger Agreement and consummate the transactions contemplated by the Merger Agreement;
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the capital structure of the Company and its subsidiaries, including as it relates to shares of common stock issuable upon the vesting or settlement of RSUs, PRSUs and Options and shares of common stock available and reserved for issuance (but not issued) under the ESPP;
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the due execution and delivery by, and enforceability of the Merger Agreement against, the Company;
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the resolutions of the Board approving and regarding the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement;
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the absence of violations of, or conflicts with, the governing documents of the Company and its subsidiaries, applicable laws and orders and certain agreements to which the Company or its subsidiaries are a party, as a result of the Company entering into and performing under the Merger Agreement and consummating the transactions contemplated by the Merger Agreement (the “No Conflicts or Consents Representation and Warranty”);
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governmental authorizations required in connection with the Merger;
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the vote required of the stockholders of the Company for the adoption of the Merger Agreement;
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the Company’s filings with and other documents furnished to the SEC since January 1, 2019 and the financial statements included or incorporated by reference therein;
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the Company’s disclosure controls and procedures and internal controls over financial reporting;
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the absence of undisclosed liabilities;
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the absence of certain changes or events;
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tax matters;
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employee benefits matters;
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absence of certain litigation;
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compliance with applicable laws, licenses and permits;
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environmental matters and compliance with environmental laws by the Company and its subsidiaries;
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material contracts of the Company and its subsidiaries;
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real property;
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intellectual property;
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labor and employment matters;
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the inapplicability of state takeover statutes or regulations to the Merger;
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finders’ and brokers’ fees and expenses;
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the opinion of Centerview with respect to the fairness of the Common Merger Consideration;
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privacy and data security;
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insurance matters;
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certain matters related to the container leases of the Company and its subsidiaries; and
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anti-corruption, sanction and export controls matters.
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corporate matters related to Parent and Merger Sub, such as due organization and good standing;
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qualification to conduct business, corporate power and authority to carry on Parent’s and Merger Sub’s respective businesses, and to enter into the Merger Agreement and consummate the transactions contemplated by the Merger Agreement;
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the due execution and delivery by, and the enforceability of the Merger Agreement against, Parent and Merger Sub;
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the resolutions of the boards of directors of Parent and Merger Sub approving the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement;
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the absence of violations of, or conflicts with, the governing documents of Parent and Merger Sub, applicable laws and orders and certain agreements to which Parent or Merger Sub is a party, as a result of Parent and Merger Sub entering into and performing under the Merger Agreement and consummating the transactions contemplated by the Merger Agreement;
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governmental authorizations required in connection with the Merger;
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absence of certain litigation;
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finders’ and brokers’ fees and expenses;
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operation and ownership of Merger Sub;
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ownership of shares of the Company’s common stock; and
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sufficiency of funds to satisfy the obligations of Parent and Merger Sub under the Merger Agreement and in connection with the consummation of the transactions contemplated by the Merger Agreement.
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any fact, circumstance, occurrence, effect, change, event or development that, individually or in the aggregate, has:
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resulted or would reasonably be expected to result in a material delay or impediment to the ability of the Company to consummate the Merger or the other transactions contemplated by the Merger Agreement; or
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had or would reasonably be expected to have a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, but excluding, in certain circumstances, any facts, circumstances, occurrences, effects, changes, events or developments arising from:
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conditions affecting the United States economy generally;
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political conditions (or changes in such conditions) in the United States (including the State of Delaware or any state in which the Company or its subsidiaries operate), declared or undeclared acts of war, sabotage or terrorism, epidemics, pandemics or other contagion, including COVID-19 (including any escalation or general worsening of any of the foregoing) or national or international emergency in the United States or any other country or region of the world occurring after the date of the Merger Agreement;
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changes in the financial, credit, banking or securities markets in the United States or any other country or region in the world (including any disruption thereof and any decline in the price of any security or any market index) and including changes or developments in or relating to currency exchange or interest rates;
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changes required by GAAP (or interpretations thereof by Financial Accounting Standards Board or any governmental authority);
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changes in any laws (or interpretations thereof by a governmental authority);
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changes that are generally applicable to the industries in which the Company and its subsidiaries operate;
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any failure by the Company to meet any internal or publicly available projections, forecasts or revenue or earnings predictions or any decline in the market price or trading volume of the capital stock of the Company (provided that the underlying causes of any such failure or decline may be considered in determining whether a Company Material Adverse Effect has occurred to the extent not otherwise excluded by another exception);
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the negotiation, execution or delivery of the Merger Agreement, the performance by Company and its subsidiaries of their obligations hereunder or the public announcement as to the identity of the parties to the Merger Agreement or pendency of the Merger or any of the other transactions contemplated thereby, including the impact of such public announcement on relationships, contractual or otherwise with customers, suppliers or employees of the Company and its subsidiaries (it being understood that this will not apply to any representation or warranty set forth in the No Conflicts or Consents Representation and Warranty or the conditions to Parent’s and Merger Sub’s obligation to commence the Migration Filing or consummate the Closing set
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changes in the Company’s credit rating (provided that the underlying causes of such decline may be considered in determining whether a Company Material Adverse Effect has occurred to the extent not otherwise excluded by another exception);
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the occurrence of natural disasters or weather conditions adverse to the business being carried on by the Company and its subsidiaries;
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stockholder litigation arising from or relating to the Merger Agreement or the Merger, including any action alleging or asserting any misrepresentation or omission in any documents (including exhibits and all other information incorporated therein) filed with or furnished to the SEC; or
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any action taken or refrained from being taken by the Company that is required to be taken or prohibited from being taken, respectively pursuant to the Merger Agreement, or is taken or refrained from being taken with the prior written consent or at the express direction of Parent;
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will, and will cause our subsidiaries to conduct our and their respective business only in the ordinary course of business consistent with past practice, and use our commercially reasonable efforts to (i) preserve intact our present business organization, (ii) maintain in effect all of our material permits, and (iii) maintain satisfactory relationships with our customers, lenders, suppliers, licensors, licensees, distributors and others having material business relationships with us; and
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will not, and will not permit our subsidiaries to:
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declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination thereof) in respect of, any of our capital stock, other equity interests or voting securities, other than (x) dividends and distributions by one of our direct or indirect wholly-owned subsidiaries to its parent, (y) dividends on our common stock (not to exceed $0.30 per share per quarter) solely to the extent made on payment dates that correspond to record dates on June 28, 2021, September 27, 2021, and December 27, 2021, and (z) dividends on the Preferred Stock pursuant to the certificate of designations;
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split, combine, subdivide, recapitalize or reclassify any of our capital stock, securities convertible into or exchangeable or exercisable for any of our capital stock or any other equity interests;
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issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for our capital stock, other equity interests or voting securities other than the issuance of common stock upon
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issue, deliver, sell, grant, pledge or otherwise encumber or subject to any lien, or authorize any of the foregoing with respect to any shares of capital stock of the Company or any of its subsidiaries, other than the issuance of shares of common stock upon the exercise of Options or vesting of PRSUs or RSUs or purchase rights under the ESPP in existence as of the date of the Merger Agreement or issued after the Merger Agreement in compliance and in accordance with the terms of the Merger Agreement; any new Options, RSUs, PRSUs or other equity interests of the Company or any of its subsidiaries, other than in compliance and in accordance with the terms of the Merger Agreement; any other securities convertible into or exchangeable or exercisable for capital stock or other equity interests in the Company or any of its subsidiaries; or any other warrants, calls, options or other rights to acquire any capital stock or other equity interests in the Company or any of its subsidiaries;
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amend the Company’s certificate of incorporation or bylaws or the organizational documents of any of its subsidiaries (whether by merger, consolidation or otherwise);
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make or adopt any material change in its accounting methods, principles or practices, except as required by a change in GAAP or applicable law (or interpretations thereof by any governmental authority);
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directly or indirectly acquire, whether by merger, consolidation, acquisition of stocks or assets or otherwise, any equity interest in, or any business or assets of, any third party, subject to certain exceptions, including, but not limited to, (i) acquisitions in the ordinary course of business consistent with past practice; (ii) acquisitions pursuant to Contracts or purchase orders in existence on the date of the Merger Agreement in accordance with the terms thereof; (iii) acquisitions of shipping containers in connection with sale/leaseback transactions in an amount not to exceed $50,000,000 in the aggregate; provided that the Company will provide advance notice to Parent of the entry into any such transaction in excess of $30,000,000 in the aggregate; or (iv) acquisitions of shipping containers in an amount not to exceed $50,000,000; provided that the Company will provide advance notice to Parent of the entry into any such transaction in excess of $20,000,000;
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sell, lease, license, mortgage, sell and leaseback or otherwise subject to any lien, or otherwise dispose of any of our properties or assets, including shipping containers, or any interests therein, subject to certain exceptions, including, but not limited to, those pursuant to material contracts in existence on the date of the Merger Agreement in accordance with the terms thereof; in an amount not to exceed $5,000,000 in the aggregate, except for disposal by sale in the ordinary course of business of trading or end-of-useful life shipping containers that are not on lease;
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create, incur, issue, refinance, assume, guarantee or become obligated with respect to any additional indebtedness or cancel any indebtedness or waive any rights of value under existing indebtedness, subject to certain exceptions, including, but not limited to, (i) the incurrence of additional indebtedness (except as permitted in the Merger Agreement) not to exceed $50,000,000 in the aggregate which is capable of being repaid in full on or after the Effective Time at any time without any penalty or premium; and (ii) the refinancing of existing indebtedness in an amount no greater than $67,000,000 in the aggregate at no greater than the interest rate in effect with respect to the current indebtedness and on other terms no less favorable in the aggregate;
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enter into any collective bargaining agreement;
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settle or compromise, or offer or propose to settle or compromise, (i) any litigation, investigation, arbitration, proceeding or other claim or dispute, or release, dismiss or otherwise dispose of any claim, liability, obligation or arbitration other than settlements, releases, dismissals, dispositions or compromises of litigation that involve the payment of monetary damages (excluding monetary damages that are fully covered by the Company’s insurance policies) in an amount not in excess of $500,000 individually or $1,000,000 in the aggregate by the Company or its subsidiaries and do not (a) involve injunctive relief or impose restrictions on the business or operations of the Company and its subsidiaries, or (b) knowingly involve any admission of any material violations of law; (ii) stockholder litigation or dispute against the Company or any of its officers or directors; or (iii) any litigation, arbitration, proceeding, or dispute that relates to the Merger Agreement or the transactions contemplated thereby, in each case, subject to the terms of the Merger Agreement;
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make, change or revoke any material election with respect to taxes; file any amended material tax return; settle or compromise any material tax claim, audit or assessment; prepare or file any material tax return in a manner inconsistent with past practice; adopt or change any material tax accounting method; change any material tax accounting period; enter into any closing agreement with respect to any material tax or surrender any right to claim a material tax refund; offset or reduction in tax; consent to any extension or waiver of the limitations period applicable to any material tax claim or assessment (other than any such extensions or waivers automatically granted); or, if it would have the effect of materially increasing the tax liability or materially reducing any tax asset of the Company or any of its subsidiaries, Parent or any affiliate of Parent, take or omit to take any other action outside the ordinary course of business;
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except in the ordinary course of business consistent with past practice (i) enter into, terminate or materially amend or modify any material contract (other than as permitted by the Merger Agreement) or contract that, if in effect on the date of the Merger Agreement, would have been a material contract or (ii) waive in any material respect any term of, or waive any material default under, or release, settle or compromise any material claim by or against the Company or any of its subsidiaries or material liability or obligation owing to the Company or any of its subsidiaries under, any material contract;
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adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation or other reorganization of the Company or any of its subsidiaries other than the transactions contemplated by the Merger Agreement;
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subject to certain exceptions, incur any capital expenditure or any obligations or liabilities in respect thereof, except in an amount no greater than $1,100,000,000 in the aggregate for fiscal year 2021;
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subject to certain exceptions, make any loans, advances or capital contributions to, or investments in, any other person, other than in the ordinary course of business consistent with past practice;
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fail to maintain existing material insurance policies or comparable replacement policies;
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except for non-exclusive licenses granted in the ordinary course of business consistent with past practice or the expiration or lapse of non-material Company intellectual property by its terms, sell, lease, license, sublicense, modify, terminate, abandon or permit to lapse, transfer or dispose of, create or incur any lien (other than permitted liens) on, or otherwise fail to take any action necessary to maintain, enforce or protect any Company intellectual property;
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subject to certain exceptions or as required by the terms of a Company benefit plan in effect on the date of the Merger Agreement or applicable law, (i) grant or increase any severance, retention or termination pay to, or enter into, amend or renew any severance, retention, termination, employment, consulting, retirement, deferred compensation, change in control, transaction bonus or other similar contract with any current or former service provider or increase benefits payable under any existing severance or termination pay policies or employment or consulting agreements, (ii) discretionarily accelerate the vesting or payment or otherwise amend the terms of any equity or equity-based awards (including all currently outstanding Company equity awards) held by any current or former service provider, (iii) establish, adopt, enter into or materially amend or alter the prior interpretation of any Company benefit plan or any collective bargaining agreement, (iv) increase the compensation, bonus or other benefits provided to any current or former service provider (other than annual increases in
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enter into, amend in any material respect, assign, terminate, or otherwise waive any material right under, any real property lease; or
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agree to take any of the foregoing actions.
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solicit, initiate, or knowingly take any action to facilitate or encourage the submission of any Alternative Proposal or the making of any proposal that could reasonably be expected to lead to any Alternative Proposal;
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subject to certain exceptions described below:
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conduct or engage in any discussions or negotiations with, disclose or afford access to any non-public information relating to the Company, or any of its subsidiaries, to, or to knowingly assist, participate in, knowingly facilitate, or knowingly encourage any effort by, any third party that is seeking to make, or has made, any Alternative Proposal;
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except where the Board (or a committee thereof) makes a good faith determination, after consultation with outside legal counsel and its financial advisor, that the failure to do so would be inconsistent with its fiduciary duties under applicable law, amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its subsidiaries; or
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failing to make, withdrawing, amending, modifying or materially qualifying, in a manner adverse to Parent, its unanimous recommendation that the common stockholders of the Company vote to adopt the Merger Agreement;
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failing to include the Board’s unanimous recommendation that the common stockholders of the Company vote to adopt the Merger Agreement a in the Proxy Statement that is mailed to the Company’s common stockholders;
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recommending an Alternative Proposal;
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failing to recommend against acceptance of any tender offer or exchange offer for shares of common stock within 10 business days after the commencement of such offer;
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making any public statement materially inconsistent with the Board’s unanimous recommendation that the common stockholders of the Company vote to adopt the Merger Agreement; or
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resolving or agreeing to take any of the foregoing actions.
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the Company notifies Parent, in writing, at least four business days before making a Company Adverse Recommendation Change or terminating the Merger Agreement pursuant to the Superior Proposal Termination Provision and entering into a Company Acquisition Agreement, of its intention to take such action with respect to a Superior Proposal;
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the Company provides with such notice the most current version of the proposed agreement reflecting the Superior Proposal and any material documents related thereto, and summarizes in reasonable detail any material terms and conditions of such Superior Proposal that are not reflected in the proposed agreement with respect to such Superior Proposal and the identity of the third party making such Superior Proposal;
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during the period of four business days after which the Company provides notice to Parent, the Company makes its representatives reasonably available, negotiates with Parent in good faith, and causes its representatives to negotiate with Parent in good faith, to make such adjustments in the terms and conditions of the Merger Agreement so that such Alternative Proposal ceases to constitute a Superior Proposal, if Parent, in its discretion, proposes in good faith to make such adjustments (and in the event that, after commencement of such period, there is any material revision to the terms of a Superior Proposal, including any revision in price, the Company must provide a new notice to Parent at least three business days before the Company effects a Company Adverse Recommendation Change (it being understood that there may be multiple extensions)); and
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the Board (or a committee thereof) determines in good faith, after consulting with outside legal counsel and its financial advisor, that such Alternative Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Parent to the terms and conditions of the Merger Agreement during the period after which the Company provides notice to Parent.
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an event, change, effect, development or occurrence, or any consequence thereof that becomes known to the Board after the date of the Merger Agreement that (i) was not known, (or if known, the consequences of which were not reasonably foreseeable), to the Board as of or prior to the date of the Merger Agreement and did not result from a breach of the Merger Agreement by the Company and (ii) does not relate to or involve an Alternative Proposal (an “Intervening Event”) occurs;
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the Board (or such committee) determines in good faith, after consulting with outside legal counsel and its financial advisor that the failure to effect such Company Adverse Recommendation Change would be inconsistent with its fiduciary duties under applicable law;
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prior to effecting the Company Adverse Recommendation Change, the Company promptly notifies Parent, in writing, at least two business days before taking such action of the Board’s (or such committee’s) intent to consider such action, and which notice shall include a reasonably detailed description of the underlying facts giving rise to the Intervening Event, and the reasons the Board (or such committee) proposes to take, such action;
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during such two business day period after the Company provides notice to Parent, the Company negotiates with Parent in good faith to make such adjustments in the terms and conditions of the Merger Agreement so that the underlying facts giving rise to the Intervening Event, and the reasons the Board (or such committee) proposes to take such action, cease to constitute circumstances causing the Board to propose making a Company Adverse Recommendation Change, if Parent, in its discretion, proposes in good faith to make such adjustments; and
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the Board (or such committee) determines in good faith, after consulting with outside legal counsel and its financial advisor and taking into account any adjustments made by Parent during such two business day period after the Company provides notice to Parent, that the failure to effect such Company Adverse Recommendation Change would be inconsistent with its fiduciary duties under applicable law.
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making an appropriate and complete filing of a Notification and Report Form pursuant to the HSR Act with respect to the Merger and the other transactions contemplated by the Merger Agreement within 15 business days of the date of the Merger Agreement, which filings were made on July 9, 2021;
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making such other filings with any other governmental entities that may be required under applicable regulatory laws, including without limitation, any such filings required pursuant to the regulatory laws of (i) the Republic of Korea and Turkey and (ii) any other countries outside of the United States, in each case, pertaining to pre-merger notification and regulation of terms and conditions of merger transactions, as reasonably promptly as practicable;
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not extending any waiting period under the HSR Act, or enter into any agreement with the FTC, the DOJ or any other governmental authority not to consummate the transactions contemplated by the Merger Agreement, except with the prior written consent of the other party to the Merger Agreement (which will not be unreasonably withheld, conditioned or delayed); and
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supplying any additional information or documentation that may be requested pursuant to the HSR Act or any other regulatory law and using reasonable best efforts to take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under the HSR Act and any other applicable regulatory law as soon as practicable (including complying with any “second request” for information or similar request pursuant to any other applicable regulatory law).
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cooperate with each other in connection with any communication, filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party;
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keep each other informed with respect to any communications received from any governmental authority or in connection with any proceeding by a private party;
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consult with each other in advance of any meeting or conference with any governmental authority or, in connection with any proceeding initiated by a private party, such private party;
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subject to certain exceptions, permit the other to review in advance any submission, filing or communication to any governmental authority; and
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use reasonable best efforts to defend through litigation on the merits any claim asserted in any court with respect to the Merger or other transactions contemplated by the Merger Agreement by any applicable governmental authority.
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coordination of press releases and other public announcements or filings relating to the Merger;
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the delisting of the Company’s common stock and Preferred Stock from NYSE and deregistration under the Exchange Act;
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notification of, consultation with and participation by Parent in connection with the defense or settlement of any stockholder litigation against the Company, its subsidiaries or their respective directors or officers relating to the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement; and
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the cooperation of parties to use commercially reasonable efforts in connection with Parent obtaining any debt financing in connection with this Agreement, including the furnishing of pertinent information;
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actions to cause to be exempt under Rule 16b-3 promulgated under the Exchange Act any disposition of Company equity securities (including derivative securities) resulting from the transactions contemplated by the Merger Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act immediately prior to the Effective Time;
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the delivery of an updated Company Disclosure Schedule with respect to the Company’s equity awards five business days prior to the Closing Date;
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the delivery to Parent of resignation letters, effective as of the Effective Time, of the directors of the Company and those directors, managers, or officers of any subsidiary of the Company as requested by Parent at least five business days prior to Closing;
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prior to the Migration Commencement Time, the liquidation of CAL Funding III Limited; and
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the delivery of an updated list of the Company’s service providers 10 business days prior to the Effective Time.
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the Stockholder Approval having been obtained;
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any waiting period applicable to the consummation of the Merger under the HSR Act and the laws of other applicable countries pertaining to pre-merger notification having expired, been terminated or otherwise concluded in a manner favorable to the Merger (without the imposition of a Burdensome Condition);
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no governmental authority having jurisdiction over the Company, Parent or Merger Sub having enacted, issued, promulgated, enforced, or entered any laws or orders, whether temporary, preliminary or permanent, that make illegal, enjoin, or otherwise prohibit consummation of the Merger or the other transactions contemplated by the Merger Agreement or that imposes a Burdensome Condition;
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the receipt and obtainment of all Key Contract Consents and the Migration will not cause any default under certain contracts for which the Key Contract Consents have not been obtained; and
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the taking or obtainment, as applicable, of all actions, consents or permissions required prior to the Migration Commencement Time.
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the representations and warranties of the Company set forth in the Merger Agreement (except for the representations and warranties with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) Company subsidiaries, (iii) capital structure, (iv) authority, execution and delivery and enforceability, (v) the Stockholder Approval, (vi) anti-takeover provisions, (vii) brokers’ fees and expenses and (viii) Centerview’s opinion) must be true and correct (without giving effect to any limitation as to “materiality” or Company Material Adverse Effect set forth therein) at and as of the date of the Merger Agreement and at and as of the Migration Commencement Time as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or Company Material Adverse Effect set forth therein) has not had and would not reasonably be expected to have a Company Material Adverse Effect;
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the representations and warranties of the Company set forth in the Merger Agreement with respect to (i) capital structure and (ii) the Stockholder Approval must be true and correct on the date of the Merger Agreement and at and as of the Migration Commencement Time as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except for any failures of such representations and warranties to be so true and correct that, individually or in the aggregate, are de minimis in nature and amount;
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the representations and warranties of the Company with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) Company subsidiaries, (iii) authority, execution and delivery and enforceability, (iv) anti-takeover provisions, (v) brokers’ fees and expenses and (vi) Centerview’s opinion must be true and correct in all respects at and as of the date of the Merger Agreement and at and as of the Migration Commencement Time as if made at and as of such time;
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the Company performing each of its material obligations required to be performed by it under the Merger Agreement at or prior to the Migration Commencement Time;
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since the date of the Merger Agreement and prior to the Migration Commencement Time, there has not occurred any fact, circumstance, occurrence, effect, change, event or development that has had a Company Material Adverse Effect; and
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Parent will have received a certificate, dated as of the Bring-Down Date and executed by the Chief Executive Officer or Chief Financial Officer of the Company confirming that the conditions set forth in the
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•
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the representations and warranties of Parent and Merger Sub (except for the representations and warranties with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) authority, execution and delivery and enforceability, and (iii) brokers’ fees and expenses) must be true and correct (without giving effect to any limitation as to “materiality” or Parent Material Adverse Effect set forth therein) at and as of the date of the Merger Agreement and at and as of the Migration Commencement Time as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect;
|
•
|
the representations and warranties of Parent and Merger Sub with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) authority, execution and delivery and enforceability, and (iii) brokers’ fees and expenses must be true and correct in all respects at and as of the date of the Merger Agreement and at and as of the Migration Commencement Time as if made at and as of such time;
|
•
|
each of Parent and Merger Sub performing all material obligations required to be performed by each of Parent and Merger Sub under the Merger Agreement at or prior to the Migration Commencement Time; and
|
•
|
the Company will have received a certificate, dated as of the Bring-Down Date and executed by an executive officer of Parent confirming that, subject to certain exceptions, the conditions set forth in the first, second and third bullets above have been satisfied (with references therein to the Migration Commencement Time being deemed to be references to the Bring-Down Date).
|
•
|
the representations and warranties of the Company set forth in the Merger Agreement (except for the representations and warranties with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) Company subsidiaries, (iii) capital structure, (iv) authority, execution and delivery and enforceability, (v) the Stockholder Approval, (vi) anti-takeover provisions, (vii) brokers’ fees and expenses and (viii) Centerview’s opinion) must be true and correct (without giving effect to any limitation as to “materiality” or Company Material Adverse Effect set forth therein) as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except (i) where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or Company Material Adverse Effect set forth therein) has not had and would not reasonably be expected to have a Company Material Adverse Effect resulting from the Company having taken any action or omitted to take any action; or (ii) where the failure of such representations and warranties to be true and correct arises out of, results from or relates to the Migration;
|
•
|
the representations and warranties of the Company set forth in the Merger Agreement with respect to (i) capital structure and (ii) the Stockholder Approval must be true and correct on as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except for any failures of such representations and warranties to be so true and correct that, individually or in the aggregate, are de minimis in nature and amount;
|
•
|
the representations and warranties of the Company with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) Company subsidiaries, (iii) authority, execution and delivery and enforceability, (iv) anti-takeover provisions, (v) brokers’ fees and expenses and (vi) Centerview’s opinion must be true and correct in all respects as of the Closing Date as if made at and as of such time;
|
•
|
the Company performing each of its material obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date or the Effective Time;
|
•
|
Parent will have received a certificate, dated as of the Closing Date and executed by the Chief Executive Officer or Chief Financial Officer of the Company confirming that the conditions set forth in the first, second, third and fourth bullets immediately above, have been satisfied;
|
•
|
(i) the parties having received from the applicable governmental authorities reasonably satisfactory evidence of the completion of the Migration pursuant to the applicable laws of Barbados, Bermuda and Delaware, (ii) the Migration having occurred with respect to each of the Migrating Subsidiaries and (iii) the having made the Migration Filings in accordance with the terms of the Merger Agreement; and
|
•
|
the Company having delivered to Parent (i) a certificate certifying that the shares are not U.S. real property interests within the meaning of Section 897(c) of the Code, which certificate will be provided pursuant to Treasury Regulation Sections 1.1445-2(c)(3), will conform to Treasury Regulations Section 1.897-2(h), and shall be in a form reasonably satisfactory to Parent and (ii) a notice to the Internal Revenue Service, signed by the Company, that satisfies the requirements of Treasury Regulations Section 1.897-2(h)(2) (the “FIRPTA Certificate Condition”).
|
•
|
the representations and warranties of Parent and Merger Sub (except for the representations and warranties with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) authority, execution and delivery and enforceability, and (iii) brokers’ fees and expenses) must be true and correct (without giving effect to any limitation as to “materiality” or Parent Material Adverse Effect set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or Parent Material Adverse Effect set forth therein), individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect;
|
•
|
the representations and warranties of Parent and Merger Sub with respect to (i) the first sentence of the representation and warranty regarding organization, standing and power, (ii) authority, execution and delivery and enforceability, and (iii) brokers’ fees and expenses must be true and correct in all respects at and as of the Closing Date as if made at and as of such time;
|
•
|
each of Parent and Merger Sub performing in all material respects all material obligations required to be performed by each of Parent and Merger Sub under the Merger Agreement at or prior to the Closing Date or the Effective Time; and
|
•
|
the Company will have received a certificate, dated as of the Closing Date and executed by an executive officer of Parent confirming that the conditions set forth in the first, second and third bullets above have been satisfied.
|
•
|
by mutual written consent of the Company and Parent;
|
•
|
by either the Company or Parent:
|
○
|
if the Merger has not been consummated on or before February 28, 2022 or such later date as agreed to by the parties) (the “End Date”); provided, however, such right will not be available to any party whose breach of any representation, warranty, covenant, or agreement set forth in the Merger Agreement has been the cause of, or resulted in, the failure of the Merger to be consummated on or before the End Date;
|
○
|
if any governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered any final, nonappealable law or order making illegal, permanently enjoining, or otherwise permanently prohibiting the consummation of the Merger or the other transactions contemplated by the Merger Agreement; provided, however, that such right of termination is not available to any party whose breach of any representation, warranty, covenant or agreement set forth in the Merger Agreement has been the cause of, or resulted in, the issuance, promulgation, enforcement, or entry of any such law or order; or
|
○
|
if the Merger Agreement has been submitted to the common stockholders of the Company for adoption at the Special Meeting and the Stockholder Approval has not been obtained (unless such Special Meeting has been adjourned or postponed, in which case at the final adjournment or postponement thereof); provided that in the event the Board has made a Company Adverse Recommendation Change, the Company may only terminate the Agreement pursuant to this bullet if it has paid to Parent the Termination Fee.
|
•
|
by the Company:
|
○
|
if prior to the receipt of the Stockholder Approval the Board (or a committee thereof) authorizes the Company, in accordance with the terms of the Merger Agreement, to terminate the Merger Agreement and enter into a Company Acquisition Agreement in respect of a Superior Proposal; provided, that in the event of such termination, the Company substantially concurrently enters into such Company Acquisition Agreement, and has paid the Termination Fee to Parent;
|
○
|
if there exists a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in the Merger Agreement such that certain of the Company’s conditions to the occurrence of the Migration Commencement Time or to the Closing of the Merger would not be satisfied and such breach is not capable of being cured by the End Date and the Company has provided Parent at least 30 days’ written notice prior to such termination stating the Company’s intention to terminate the Merger Agreement; provided that the Company shall not have the right to so terminate the Merger Agreement if the Company is in material breach of any representation, warranty, covenant or obligation under the Merger Agreement, which breach has not been cured and such breach would prevent satisfaction of the conditions to Closing;
|
○
|
if (i) all of the conditions set forth in “—Conditions to the Contribution, Migration Filings and Merger—Conditions to Each Party’s Obligation to Effect the Merger” and “—Conditions to the Contribution, Migration Filings and Merger—Conditions to Obligations of Parent and Merger Sub to Effect the Merger” (other than those conditions that by their nature are to be satisfied at the Closing, but subject to such conditions being able to be satisfied) have been satisfied or waived by Parent, (ii) the Company stood ready, willing and able to consummate the Closing on the date required by the terms of the Merger Agreement and the Company has given Parent a written notice on or after such date confirming such fact and (iii) Parent and Merger Sub have failed to consummate the Merger within 10 business days following the later of the date when it is required to consummate the Merger pursuant to the terms of the Merger Agreement and the receipt of such notice; provided, that notwithstanding anything in the End Date Termination Provision to the contrary, no party will be permitted to terminate the Merger Agreement pursuant to the End Date Termination Provision during any such 10 business day period; or
|
○
|
if the Merger has not been consummated within 70 days of the later of (i) the earliest date on which the Contribution is permitted to be made pursuant to the terms of the Merger Agreement and (ii) the date of the Contribution.
|
•
|
by Parent:
|
○
|
if (i) a Company Adverse Recommendation Change has occurred or (ii) after public announcement of an Alternative Proposal, the Board has failed to reaffirm the Board Recommendation within 10 business days after the receipt of any written request to do so from Parent, provided that Parent may only make such request once with respect to any particular Alternative Proposal or any material publicly announced amendment or modification thereto, or (iii) the Company or the Board has breached its obligations regarding the Special Meeting (as discussed in “—Proxy Statement and Special Meeting”) or the restrictions on its ability to solicit, initiate, facilitate or encourage Alternative Proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding Alternative Proposals (as discussed in “—Alternative Proposals; Change in Recommendation; Intervening Events”) in any material respect; provided that Parent will not have the right to terminate the Agreement pursuant to this bullet after the Stockholder Approval is obtained; or
|
○
|
if there exists a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in the Merger Agreement such that certain of Parent’s and Merger Sub’s conditions to the occurrence of the Migration Commencement Time or to the occurrence of the Merger would not be satisfied and such breach is not capable of being cured by the End Date and Parent has provided the Company at least 30 days’ written notice prior to such termination stating Parent’s intention to terminate the Merger Agreement; provided, that Parent shall not have the right to so terminate the Merger Agreement if Parent or Merger Sub is in material breach of any representation, warranty, covenant or obligation under the Merger Agreement, which breach has not been cured.
|
•
|
Parent terminates the Merger Agreement pursuant to the Parent Termination Provision;
|
•
|
the Company terminates the Merger Agreement prior to receipt of the Stockholder Approval in order to accept a Superior Proposal;
|
•
|
the Company or Parent terminate the Merger Agreement pursuant to the Stockholder Approval Termination Provision and the Board has made a Company Adverse Recommendation Change; or
|
•
|
if (i) the Merger Agreement is terminated by Parent or the Company pursuant to the End Date Termination Provision or the Stockholder Approval Termination Provision, (ii) prior to the time of the Special Meeting (or adjournment or postponement thereof) at which at vote was taken to adopt the Merger Agreement but the Stockholder Approval was not obtained, an Alternative Proposal has been publicly made, commenced, submitted or announced and not publicly and irrevocably withdrawn at least five business days prior to such Special Meeting and (iii) the Company consummates a transaction with respect to any Alternative Proposal within 12 months after such termination, or signs a definitive agreement with respect to any Alternative Proposal within 12 months after such termination and such transaction is subsequently consummated, then the Company must pay Parent, within two business days following such consummation, the Termination Fee; provided that, solely for purposes of this paragraph, all references to “15%” in the definition of Alternative Proposal will be deemed to be references to “50%.”
|
•
|
extend the time for the performance of any of the obligations or acts of the other parties to the Merger Agreement;
|
•
|
waive any inaccuracies in the representations and warranties of any other party contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement; or
|
•
|
subject to the rights and restrictions on amendment described above, waive compliance with any of the agreements or conditions contained in the Merger Agreement.
|
○
|
Timothy B. Page, President and Chief Executive Officer and Chief Financial Officer;
|
○
|
Daniel J. Hallahan, Senior Vice President, Global Marketing; and
|
○
|
Camille G. Cutino, Senior Vice President, Operations and Human Resources.
|
|
| |
Common Stock
Price
|
| |
Cash
Dividend
Per Share
|
|||
|
| |
High
|
| |
Low
|
| ||
Year Ended December 31, 2019
|
| |
|
| |
|
| |
|
First quarter
|
| |
$26.63
|
| |
$21.24
|
| |
—
|
Second quarter
|
| |
$26.30
|
| |
$21.79
|
| |
—
|
Third quarter
|
| |
$26.01
|
| |
$17.87
|
| |
—
|
Fourth quarter
|
| |
$29.51
|
| |
$20.06
|
| |
—
|
|
| |
|
| |
|
| |
|
Year Ended December 31, 2020
|
| |
|
| |
|
| |
|
First quarter
|
| |
$29.57
|
| |
$10.13
|
| |
—
|
Second quarter
|
| |
$22.82
|
| |
$12.78
|
| |
—
|
Third quarter
|
| |
$28.36
|
| |
$15.51
|
| |
$0.25
|
Fourth quarter
|
| |
$35.76
|
| |
$25.21
|
| |
$0.25
|
|
| |
|
| |
|
| |
|
Year Ending December 31, 2021
|
| |
|
| |
|
| |
|
First quarter
|
| |
$50.21
|
| |
$30.20
|
| |
$0.30
|
Second quarter
|
| |
$56.17
|
| |
$37.30
|
| |
$0.30
|
Third quarter (through July 9, 2021)
|
| |
$56.10
|
| |
$55.50
|
| |
[•]
|
•
|
each person known to us who beneficially owned more than 5% of our common stock;
|
•
|
each of our named executive officers and directors; and
|
•
|
all executive officers and directors as a group.
|
Name and Address of Beneficial Owner
|
| |
Number of Shares
Beneficially
Owned
|
| |
Percentage of Class
Beneficially
Owned
|
Beneficial Owners of 5% or More of our Common Stock:
|
| |
|
| |
|
Dimensional Fund Advisors LP(1)
|
| |
1,435,666
|
| |
8.3%
|
Park West Asset Management LLC(2)
|
| |
1,364,843
|
| |
7.9%
|
Magnetar Financial LLC(3)
|
| |
1,271,983
|
| |
7.3%
|
BlackRock, Inc.(4)
|
| |
1,219,998
|
| |
7.0%
|
Wellington Management Group LLP(5)
|
| |
1,120,404
|
| |
6.5%
|
Wellington Trust Company, N.A.(6)
|
| |
1,096,641
|
| |
6.3%
|
Andrew S. Ogawa(7)
|
| |
1,087,592
|
| |
6.3%
|
Aristotle Capital Boston, LLC(8)
|
| |
1,056,877
|
| |
6.1%
|
The Vanguard Group(9)
|
| |
887,208
|
| |
5.1%
|
Named Executive Officers and Directors:
|
| |
|
| |
|
Kathryn G. Jackson(10)
|
| |
25,578
|
| |
*
|
Andrew S. Ogawa(7)
|
| |
1,087,592
|
| |
6.3%
|
David G. Remington(11)
|
| |
79,406
|
| |
*
|
Gary M. Sawka(12)
|
| |
87,611
|
| |
*
|
John H. Williford(13)
|
| |
24,912
|
| |
*
|
Timothy B. Page(14)
|
| |
46,216
|
| |
*
|
Camille G. Cutino(15)
|
| |
22,169
|
| |
*
|
Daniel J. Hallahan(16)
|
| |
36,329
|
| |
*
|
All directors and executive officers as a group (8 persons)(17)
|
| |
1,409,813
|
| |
8.1%
|
(1)
|
Based solely on a Schedule 13G/A filed with the SEC on February 12, 2021. The address for Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746.
|
(2)
|
Based solely on a Schedule 13G/A filed with the SEC on February 16, 2021. The address for Park West Asset Management LLC is 900 Larkspur Landing Circle, Suite 165, Larkspur, California 94939.
|
(3)
|
Based solely on a Schedule 13D filed with the SEC on June 29, 2021. The address of Magnetar Financial LLC is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois 60201.
|
(4)
|
Based solely on a Schedule 13G/A filed with the SEC on January 29, 2021. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
|
(5)
|
Based solely on a Schedule 13G/A filed with the SEC on February 3, 2021. The address of Wellington Management Group LLP is 280 Congress Street, Boston, Massachusetts 02210.
|
(6)
|
Based solely on a Schedule 13G/A filed with the SEC on February 3, 2021. The address for Wellington Trust Company, N.A. is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210.
|
(7)
|
Mr. Ogawa beneficially owns 116,859 shares of our common stock in his own name, which includes 3,699 RSAs. Mr. Ogawa also beneficially owns (i) 712,433 shares held by Mr. Ogawa as executor of the estate of Hiromitsu Ogawa and (ii) 258,300 shares held by the Andrew S. Ogawa GST Trust, of which Mr. Ogawa is the trustee.
|
(8)
|
Based solely on a Schedule 13G/A filed with the SEC on February 2, 2021. The address of Aristotle Capital Boston, LLC is One Federal Street, 36th Floor, Boston, Massachusetts 02110.
|
(9)
|
Based solely on a 13G filed with the SEC on February 10, 2021. The address of The Vanguard Group is 100 Vanguard Blvd, Malvern, PA 19355.
|
(10)
|
Includes 3,699 RSAs.
|
(11)
|
Includes 48,400 shares issuable upon exercise of Options that are exercisable within 60 days of July 6, 2021 and 5,302 RSAs.
|
(12)
|
Includes 60,000 shares issuable upon exercise of Options that are exercisable within 60 days of July 6, 2021 and 3,699 RSAs.
|
(13)
|
Includes 3,699 RSAs.
|
(14)
|
Includes 40,500 shares issuable upon exercise of Options that are exercisable within 60 days of July 6, 2021.
|
(15)
|
Includes 12,334 shares issuable upon exercise of Options that are exercisable within 60 days of July 6, 2021.
|
(16)
|
Includes 1,917 shares issuable upon exercise of Options that are exercisable within 60 days of July 6, 2021.
|
(17)
|
Includes 163,151 shares that executive officers and directors as a group have the right to acquire within 60 days of July 6, 2021 through the exercise of Options, and 20,098 RSAs.
|
•
|
not earlier than the close of business on February 4, 2022; and
|
•
|
not later than the close of business on March 6, 2022.
|
•
|
our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 1, 2021;
|
•
|
our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on April 30, 2021; and
|
•
|
our Current Reports on 8-K, filed with the SEC on February 16, 2021 (other than Item 2.02 thereto), June 8, 2021 and June 21, 2021.
|
|
| |
|
| |
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|
| |
(a)
|
| |
if to the Company, to:
|
|
| |
|
| |
|
|
| |
|
| |
CAI International, Inc.
|
|
| |
|
| |
Steuart Tower, 1 Market Plaza, Suite 2400
|
|
| |
|
| |
San Francisco, CA 94105
|
|
| |
|
| |
Attention: Chief Financial Officer
|
|
| |
|
| |
Email: finance@capps.com
|
|
| |
|
| |
legal@capps.com
|
|
| |
|
| |
|
|
| |
|
| |
with a copy, which will not constitute notice for purposes hereof, to:
|
|
| |
|
| |
|
|
| |
|
| |
Perkins Coie LLP
|
|
| |
|
| |
505 Howard Street Suite 1000
|
|
| |
|
| |
San Francisco, CA 94105
|
|
| |
|
| |
Attention: Edward J. Wes
|
|
| |
|
| |
Email: EDWes@perkinscoie.com
|
|
| |
|
| |
|
|
| |
|
| |
Perkins Coie LLP
|
|
| |
|
| |
1900 Sixteenth Street Suite 1400
|
|
| |
|
| |
Denver, CO 80202-5255
|
|
| |
|
| |
Attention: Garland (Sonny) W. Allison
|
|
| |
|
| |
Email: SAllison@perkinscoie.com
|
|
| |
|
| |
|
|
| |
(b)
|
| |
if to Parent or Merger Sub, to:
|
|
| |
|
| |
|
|
| |
|
| |
Mitsubishi HC Capital Inc.
|
|
| |
|
| |
5-1 Marunouchi 1-Chome, Chiyoda-ku
|
|
| |
|
| |
Tokyo, 100-6525 Japan
|
|
| |
|
| |
Attention: Toshio Oka
|
|
| |
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Email: logi-project-01@mitsubishi-hc-capital.com
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with a copy, which will constitute notice for purposes hereof, to:
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Davis Polk & Wardwell LLP
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450 Lexington Avenue
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New York, NY 10017
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Attention: Phillip R. Mills
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Email: phillip.mills@davispolk.com
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with a copy, which will not constitute notice for purposes hereof, to:
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Nishimura & Asahi LLP
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1251 Avenue of the Americas, 23rd Floor,
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New York, NY 10020
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Attention: Megumi Shimizu
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Email: m.shimizu@nishimura.com
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CAI INTERNATIONAL, INC.
|
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By:
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/s/ Dave Remington
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Name:
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Dave Remington
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Title:
|
| |
Chairman of the Board
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MITSUBISHI HC CAPITAL INC.
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By:
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/s/ Kenji Yasuno
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Name:
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Kenji Yasuno
|
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Title:
|
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Authorized Signatory
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CATTLEYA ACQUISITION CORP.
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By:
|
| |
/s/ Toshio Oka
|
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Name:
|
| |
Toshio Oka
|
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| |
Title:
|
| |
Authorized Signatory
|
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|
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Centerview Partners LLC
31 West 52nd Street
New York, NY 10019
June 17, 2021
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Very truly yours,
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/s/ CENTERVIEW PARTNERS LLC
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CENTERVIEW PARTNERS LLC
|
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