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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Casper Sleep Inc | NYSE:CSPR | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 6.78 | 0 | 01:00:00 |
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Filed by the Registrant ☒
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Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Casper Sleep Inc. common stock (“Casper common stock”)
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(2)
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Aggregate number of securities to which transaction applies:
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As of the close of business on November 30, 2021, 44,147,882 shares of Casper common stock (including issued and outstanding shares of Casper common stock, shares of Casper common stock underlying Company RSU Awards (as defined herein), Company PSU Awards (as defined herein) and in-the-money Company Options (as defined herein)).
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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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The maximum aggregate value was determined based upon the sum of: (A) 44,050,081 shares of Casper common stock (which includes 41,618,784 shares of common stock, 2,029,833 Company RSU Awards and 401,464 Company PSU Awards (each as defined herein) outstanding as of November 30, 2021) multiplied by $6.90 per share and (B) options to purchase 97,801 shares of Casper common stock multiplied by $3.95 (the difference between $6.90 and the weighted average exercise price of $2.95 per share).
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(4)
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Proposed maximum aggregate value of transaction:
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$304,331,872.85
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(5)
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Total fee paid:
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$28,211.56
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In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filed fee was determined by multiplying $304,331,872.85 by 0.0000927
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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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Philip Krim
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Chairman of the Board of Directors
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1.
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To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated as of November 14, 2021, (the “Merger Agreement”), by and among Marlin Parent, Inc., a Delaware limited liability company (“Parent”), Marlin Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Casper. Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Casper and the separate corporate existence of Merger Sub will cease, with Casper continuing as the surviving corporation (the “Merger”) and a wholly owned subsidiary of Parent; and
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To consider and vote on any 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.
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By Order of the Board of Directors,
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Philip Krim
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Chairman of the Board of Directors
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the adoption of the Merger Agreement by the requisite affirmative vote of stockholders;
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the expiration or termination of the applicable waiting period under the HSR Act;
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the absence of any laws or court orders making the Merger illegal or otherwise prohibiting the Merger;
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in the case of Parent and Merger Sub, the absence, since the date of the Merger Agreement, of any continuing change, event, effect, development, condition, fact, state of facts, occurrence or circumstance that, individually or in the aggregate, is or would reasonably be expected to have a material adverse effect (with certain limitations) on (i) the ability of Casper and its subsidiaries (each, a “Casper Group Member” and together, the “Casper Group”) to perform its material obligations under, or to consummate the transactions contemplated by the Merger Agreement or (ii) the business, financial condition or results of operations of the Casper Group, taken as a whole;
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the accuracy of the representations and warranties of Casper, Parent and Merger Sub in the Merger Agreement, subject to materiality qualifiers, as of the Closing Date or the date in respect of which such representation or warranty was specifically made; and
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the performance in all material respects by Casper, Parent and Merger Sub of their respective obligations required to be performed by them under the Merger Agreement at or prior to the Effective Time.
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at the Effective Time, each Company Option, Company RSU Award, and Company PSU Award held by an executive officer or director will receive the treatment described in the section of this proxy statement captioned “The Merger—Interests of Executive Officers and Directors of Casper in the Merger—Treatment of Company Equity Awards”;
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eligibility of certain of Casper’s executive officers to receive severance payments and benefits (including equity award vesting acceleration) and/or supplemental bonuses under their employment, change in control or other similar agreements with Casper, as described in more detail in the section of this proxy statement captioned “The Merger—Interests of Executive Officers and Directors of Casper in the Merger—Casper Severance and Change in Control Arrangements”; and
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continued indemnification and directors’ and officers’ liability insurance to be provided by the Surviving Corporation.
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(i)
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Casper Stockholders will not be entitled to, nor will they receive, the Per Share Merger Consideration for shares of Casper common stock pursuant to the Merger Agreement;
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(ii)
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(a) Casper will remain an independent public company; (b) Casper common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (c) Casper will continue to file periodic reports with the SEC; and
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(iii)
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under certain specified circumstances, (a) Casper may be required to pay Parent a termination fee of $9,140,000, upon the termination of the Merger Agreement; or (b) Parent may be required to pay Casper a termination fee equal to $24,375,000, upon the termination of the Merger Agreement.
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Q:
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Why am I receiving these materials?
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The Board of Directors is furnishing this proxy statement and form of proxy card to the holders of shares of Casper common stock in connection with the solicitation of proxies to be voted at the Special Meeting.
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When and where is the Special Meeting?
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Casper will hold the Special Meeting virtually via the Internet at the Virtual Meeting Website. You will not be able to attend the Special Meeting physically in person.
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What am I being asked to vote on at the Special Meeting?
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You are being asked to vote on the following proposals:
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to adopt the Merger Agreement pursuant to which Merger Sub will merge with and into Casper, and Casper will become a wholly owned subsidiary of Parent; and
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to approve 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.
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Who is entitled to vote at the Special Meeting?
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Stockholders as of the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. Each holder of Casper common stock shall be entitled to cast one (1) vote on each matter properly brought before the Special Meeting for each such share of Casper common stock owned at the close of business on the Record Date.
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May I attend the Special Meeting and vote in person?
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Yes. You will be able to attend the Special Meeting online and submit your questions by visiting [ ]. You will also be able to vote your shares electronically at the Special Meeting.
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What will I receive if the Merger is completed?
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Upon completion of the Merger, you will be entitled to receive the Per Share Merger Consideration of $6.90 in cash, without interest, subject to any applicable withholding taxes, for each share of Casper common
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What vote is required to adopt the Merger Agreement?
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The affirmative vote of the holders of a majority of the outstanding shares of Casper common stock is required to adopt the Merger Agreement.
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Have any Casper Stockholders already agreed to approve the proposal to adopt the Merger Agreement?
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Yes. The Voting Agreement Stockholders, which collectively own 11,497,211 shares of Casper common stock representing approximately 28% of the outstanding shares of Casper common stock as of November 14, 2021, have entered into the Voting and Support Agreement with Parent, a copy of which is attached as Annex D to this proxy statement. Pursuant to the Voting and Support Agreement, the Voting Agreement Stockholders have agreed, among other things, subject to the terms and conditions thereof, to vote all of the shares of Casper common stock held by such stockholders as of such date (a) in favor of adoption of the Merger Agreement and the transactions contemplated thereby and (b) against (i) any action or agreement that would reasonably be expected to result in any of the conditions to the Company’s obligations under the Merger Agreement not being satisfied and (ii) any Acquisition Proposal, or any agreement, transaction or other matter that is intended to, or would reasonably be expected to, impede, interfere with or materially and adversely affect the consummation of the Merger and the other transactions contemplated thereby, in each case, at every meeting of the Company’s stockholders at which such matters are to be voted on (including any adjournment or postponement thereof), in each case, so long as the Merger Agreement has not been terminated and there have been no amendments to the Merger Agreement
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What happens if the Merger is not completed?
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If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, stockholders will not receive the Per Share Merger Consideration for their shares of Casper common stock. Instead, Casper will remain an independent public company, Casper common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act, and we will continue to file periodic reports with the SEC.
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What do I need to do now?
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You should carefully read and consider this entire proxy statement and the annexes to this proxy statement, including, but not limited to, the Merger Agreement, along with all of the documents that we refer to in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. Then sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope, or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card), so that your shares can be voted at the Special Meeting, unless you wish to seek appraisal. If you hold your shares in “street name,” please refer to the voting instruction form(s) provided by your bank, broker or other nominee to vote your shares.
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Should I surrender my share certificates or book-entry shares now?
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No. After the Merger is completed, the Payment Agent (as defined in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Exchange and Payment Procedures) will send each holder of record a letter of transmittal and written instructions that explain how to exchange shares of Casper common stock represented by such holder’s share certificates or book-entry shares for the Per Share Merger Consideration.
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What happens if I sell or otherwise transfer my shares of Casper common stock after the Record Date but before the Special Meeting?
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The Record Date for the Special Meeting is earlier than the date of the Special Meeting and the date the Merger is expected to be completed. If you sell or transfer your shares of Casper common stock after the Record Date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies Casper in writing of such special arrangements, you will transfer the right to receive the Per Share Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares, but you will retain your right to vote those shares at the Special Meeting. Even if you sell or otherwise transfer your shares of Casper common stock after the Record Date, we encourage you to sign, date and return the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card).
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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, American Stock Transfer & Trust Company, LLC (“AST”), 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 Casper.
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How may I vote?
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If your shares are registered directly in your name with our transfer agent, AST, 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 Casper.
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by Internet—You can vote over the Internet at www.proxyvote.com by following the instructions on the Internet Notice or proxy card;
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by Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions on the proxy card; or
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by Mail—You can vote by mail by signing, dating. and mailing the proxy card, which you may have received by mail.
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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 bank, broker 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 bank, broker or other nominee
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May I change my vote after I have mailed my signed and dated proxy card?
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Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:
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signing another proxy card with a later date and returning it to us prior to the Special Meeting;
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submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to the Secretary of Casper; or
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attending the Special Meeting virtually via the Internet at the Virtual Meeting Website and completing a virtual ballot.
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What is a proxy?
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A proxy is your legal designation of another person (the “Proxy Holder”) to vote your shares of Casper common stock. 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 of Casper common stock is called a “proxy card.” Emilie Arel, our President and Chief Executive Officer, Philip Krim, our Non-Executive Chairman of the Board of Directors, and Michael Monahan, our Chief Financial Officer, or either of them are the Proxy Holder for the Special Meeting, each with full power of substitution and re-substitution.
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If a stockholder gives a proxy, how are the shares voted?
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Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, 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 or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
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What should I do if I receive more than one (1) set of voting materials?
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Please sign, date and return (or grant your proxy electronically over the Internet or by telephone using the instructions provided in the enclosed proxy card) each proxy card and voting instruction card that you receive.
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Where can I find the voting results of the Special Meeting?
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Casper intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the Special Meeting. All reports that Casper files with the SEC are publicly available when filed. For more information, please see the section of this proxy statement captioned “Where You Can Find More Information.”
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Will I be subject to U.S. federal income tax upon the exchange of Casper common stock for cash pursuant to the Merger?
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If you are a U.S. Holder (as defined under the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger to Holders of Casper Common Stock”), the exchange of Casper common stock for cash pursuant to the Merger generally will require you to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash you received pursuant to the Merger and your adjusted tax basis in the shares of Casper common stock surrendered pursuant to the Merger.
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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 possible and currently expect to complete the Merger in 2022. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions specified in the Merger Agreement, many of which are outside of our control.
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Who can help answer my questions?
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If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Casper common stock, please contact our proxy solicitor:
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the completion of the proposed transaction on anticipated terms and timing, including obtaining stockholder and regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the Company’s business and other conditions to the completion of the transaction;
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conditions to the closing of the transaction may not be satisfied;
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the transaction may involve unexpected costs, liabilities or delays;
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the outcome of any legal proceedings related to the transaction;
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the failure by Parent to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the transaction;
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the impact of the COVID-19 pandemic on the Company’s business and general economic conditions;
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the Company’s ability to implement its business strategy or the failure by the Company to obtain or maintain adequate liquidity;
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significant transaction costs associated with the proposed transaction;
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potential litigation relating to the proposed transaction;
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the risk that disruptions from the proposed transaction will harm the Company’s business, including current plans and operations;
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the ability of the Company to retain and hire key personnel;
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potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction;
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legislative, regulatory and economic developments affecting the Company’s business;
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general economic and market developments and conditions;
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the evolving legal, regulatory and tax regimes under which the Company operates;
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potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect the Company’s financial performance;
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restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions;
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such other risks and uncertainties described more fully in documents filed with or furnished to the SEC by the Company, including its Annual Report on Form 10-K previously filed with the SEC on February 26, 2021 and its Quarterly Report on Form 10-Q previously filed with the SEC on November 15, 2021; and
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unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as the Company’s response to any of the aforementioned factors.
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signing another proxy card with a later date and returning it to us prior to the Special Meeting;
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submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to the Secretary of Casper; or
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attending the Special Meeting virtually via the Internet at the Virtual Meeting Website and completing a virtual ballot.
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(i)
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the stockholders will not be entitled to, nor will they receive, the Per Share Merger Consideration for their respective shares of Casper common stock pursuant to the Merger Agreement;
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(ii)
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(a) Casper will remain an independent public company; (b) Casper common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (c) Casper will continue to file periodic reports with the SEC;
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(iii)
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we anticipate that (a) management will operate the business in a manner similar to that in which it is being operated today and (b) stockholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including, but not limited to, risks and uncertainties with respect to Casper’s business, prospects and results of operations, as such may be affected by, among other things, the highly competitive industry in which Casper operates and economic conditions;
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(iv)
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the price of Casper common stock may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of Casper common stock would return to the price at which it trades as of the date of this proxy statement;
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(v)
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the Board of Directors will continue to evaluate and review Casper’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate; irrespective of these efforts, it is possible that no other transaction acceptable to the Board of Directors will be offered or that Casper’s business, prospects and results of operations will be adversely impacted; and
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(vi)
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under certain specified circumstances, (a) Casper may be required to pay Parent a termination fee of $9,140,000, upon the termination of the Merger Agreement; or (b), Parent may be required to pay Casper a termination fee equal to $24,375,000, upon the termination of the Merger Agreement.
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the current and historical market prices of Casper common stock, including the market performance of the Casper common stock relative to those of other participants in Casper’s industry and general market indices, and the fact that the Per Share Merger Consideration constituted a premium of 94% over
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the belief of the Board of Directors, after a thorough review of Casper’s business, market trends, results of operations, competitive landscape, execution risks and financial condition, and discussions with Casper’s management and advisors, that the value offered to Casper Stockholders pursuant to the Merger Agreement is more favorable to Casper Stockholders than the potential long-term and sustainable value that might have resulted from remaining an independent public company, considering:
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risks and uncertainties regarding efforts to increase consumer spending through marketing programs;
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intense competition in the retail bedding industry;
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risks and uncertainties regarding Casper’s ability to penetrate the existing market for retail bedding, as well as the continued growth and expansion of that market;
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risks related to consumer preferences, retail bedding product mix and aging inventory;
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disruption in supply chains and shipping for retail bedding, increased costs of raw goods, manufacturing and delivery for retail bedding products, and the availability and timing of delivery of finished retail bedding products for resale and for delivery to consumers and retail partners;
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the impact of a limited supply of finished retail bedding products and advance commitments to retail partners to deliver finished retail bedding products on Casper’s direct to consumer sales and relative margins and profitability;
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risks associated with Casper’s ability to pass increased costs through to retail partners and consumers; and
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the Company’s significant near term cash needs and need for lender waivers through at least February 2022 (as further discussed under the section of this proxy statement captioned “—Management Projections”).
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the belief of the Board of Directors, based upon the course of negotiations with Durational (as described in more detail under the section of this proxy statement captioned “—Background of the Merger”), that the Per Share Merger Consideration represents the highest price that Parent was willing to pay and that the terms of the Merger Agreement include the most favorable terms to the Company, in the aggregate, to which Parent was willing to agree;
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the fact that, after broad outreach (as described in more detail under the section of this proxy statement captioned “—Background of the Merger”), the Company did not receive any acquisition proposals, including from Party C, other than the acquisition proposal from Parent;
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the Company’s third quarter results, including a loss per share of $0.61 relative to street consensus estimates of a loss per share of $0.43, and the Board of Directors’ belief that the release of the Company’s third quarter earnings on November 15, 2021, would have a further adverse impact on the Company’s share price were the Company not to concurrently announce a transaction with Parent;
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the lack of certainty or firm offers with respect to the financing proposals that had been submitted to the Company by Party A and Party B, and the perceived cost and dilution presented by such proposals, which such dilution effects ranged from approximately 15% to 30% of the Company’s fully diluted share count, along with the fact that the Company did not receive any additional financing proposals;
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the fact that any potential financing under the ATM Program could not be completed until after the Company’s third quarter black-out period had been lifted following the Company’s third quarter earnings release, and that the availability of the ATM Program, the amount of financing that might be raised under the ATM Program, and the cost of such financing was highly uncertain;
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the Bridge Loans that had been finalized with TriplePoint and the related waivers from Wells Fargo which would provide Casper with additional liquidity to operate its business during the pendency of the Merger, both of which were contingent upon an executed transaction with Parent;
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•
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the Board of Directors’ belief that the closing of the Merger was very likely to occur, assuming support from the Company’s stockholders, and would be achieved in a timely manner, in view of the terms of the Merger Agreement;
|
|
•
|
the view of the Board of Directors that the Per Share Merger Consideration was more favorable to Casper Stockholders on a risk-adjusted basis than the potential value that might result from other alternatives reasonably available to Casper, based upon the Board of Directors’ extensive knowledge of Casper’s business, assets, financial condition and results of operations, its competitive position and historical and projected financial performance, and the belief that the Per Share Merger Consideration represented an attractive and comparatively certain value for Casper Stockholders relative to the risk-adjusted prospects for Casper on a standalone basis;
|
|
•
|
the fact that the Voting Agreement Stockholders, who collectively owned approximately 28% of the outstanding Casper common stock as of November 14, 2021, were supportive of the Merger and prepared to execute and deliver the Voting and Support Agreement;
|
|
•
|
the financial analysis of the Per Share Merger Consideration reviewed by Jefferies with the Board of Directors as well as the opinion of Jefferies rendered to the Board of Directors on November 14, 2021, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as described in its opinion, the Per Share Merger Consideration to be received by holders of shares of Casper common stock pursuant to the Merger Agreement was fair, from a financial point of view, to such holders (other than Parent, Merger Sub and their respective affiliates), as set forth in such opinion as more fully described below in the section of this proxy statement captioned “—Opinion of Jefferies LLC.”
|
|
•
|
the terms and conditions of the Merger Agreement and the other transaction documents, including the following:
|
|
•
|
Casper’s ability to terminate the Merger Agreement in order to accept a Superior Proposal, subject to certain conditions of the Merger Agreement and paying Parent a termination fee of $9,140,000, in the case of any such termination – an amount which the Board of Directors believed, after consultation with its financial and legal advisors, was unlikely to deter third parties from making Acquisition Proposals;
|
|
•
|
the conditions to closing contained in the Merger Agreement, which are limited in number and scope, and which, in the case of the condition related to the accuracy of Casper’s representations and warranties, is generally subject to a Company Material Adverse Effect (as defined in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Representations and Warranties”) qualification;
|
|
•
|
the requirement that the Merger Agreement be adopted by the affirmative vote of the holders of a majority of the outstanding shares of Casper common stock;
|
|
•
|
the fact that, with the availability of the TriplePoint Bridge Loans and Wells Fargo Second Waiver, Casper has sufficient operating flexibility to conduct its business in the ordinary course prior to the consummation of the Merger;
|
|
•
|
the provision of the Merger Agreement allowing the Board of Directors to effect a Company Board Recommendation Change and to terminate the Merger Agreement in certain circumstances in connection with a Superior Proposal (or to effect a change of recommendation in response to an Intervening Event) subject to the applicable procedures, terms and conditions set forth in the Merger Agreement (including, if applicable, payment of a termination fee) (for more information, see the sections of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Company Board Recommendation Change,” “Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement” and “Proposal 1: Adoption of the Merger Agreement—Termination Fee”);
|
|
•
|
the absence of a financing condition in the Merger Agreement;
|
|
•
|
the Termination Date of May 14, 2022 allowing for sufficient time to complete the Merger;
|
|
•
|
that Parent has obtained committed debt financing for the transaction from reputable financial institutions and committed equity financing for the transaction from the Durational Vehicle that together provide funding of an amount sufficient to cover the aggregate Per Share Merger Consideration, all fees and expenses payable by Parent, Merger Sub or Casper and the repayment or refinancing of any indebtedness required to be repaid or refinanced;
|
|
•
|
the obligation of Parent and Merger Sub to use reasonable best efforts to consummate the financing and the limited number and nature of the conditions to the debt and equity financing;
|
|
•
|
the Company’s ability, under circumstances specified in the Merger Agreement, to specifically enforce and cause Parent to cause the Durational Vehicle to fund its respective contributions as contemplated by the Merger Agreement and the Equity Commitment Letter;
|
|
•
|
the requirement that, in the event of a failure of the Merger to be consummated under certain circumstances, Parent will pay the Company a termination fee of $24,375,000, and the obligation of the Durational Vehicle to pay such amounts, pursuant to the terms of a limited guarantee, as more fully described under the section of this proxy statement captioned “—Financing of the Merger—Equity Financing” and “—Financing of the Merger—Limited Guarantee”;
|
|
•
|
the fact that the Voting Agreement terminates upon the earliest of (i) the consummation of the transactions contemplated by the Merger Agreement, (ii) the valid termination of the Merger Agreement in accordance with its terms, (iii) the time that the Requisite Stockholder Approval has been obtained, and (iv) any change to the terms of the Merger Agreement (A) that reduces the amount or changes the form of consideration payable to the Company’s stockholders or (B) extends the Termination Date;
|
|
•
|
the availability of appraisal rights under Delaware law to holders of shares of Casper common stock who do not vote in favor of the adoption of the Merger Agreement or consented in writing thereto 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; and
|
|
•
|
the fact that, in the absence of the Merger, Casper had significant near term cash needs through at least February 2022, and would continue to incur significant expenses by remaining a public company, including operating expenses, capital expenditures, legal, accounting, transfer agent, printing and filing fees, and that those expenses could adversely affect Casper’s financial position and financial performance and the value of its shares, that the Board of Directors could not be assured that financing sufficient to permit Casper to satisfy its obligations would be available on attractive terms or at all, and that the terms of any additional financing or the absence of additional financing could have a material adverse effect on its cash position and its ability to continue to operate as a stand-alone business.
|
|
•
|
the fact that Casper would no longer exist as an independent, publicly traded company, and stockholders would no longer participate in any future earnings or growth and would not benefit from any potential future appreciation in the value of Casper;
|
|
•
|
the risks and costs to Casper if the Merger is not completed in a timely manner or at all, including the significant near term financing needs of the business, the potential material adverse effect on Casper, its business and its financial position and results of operations if Casper is unable to raise additional financing if the Merger does not close, potential adverse effects on Casper’s ability to attract and retain key personnel, the diversion of management and employee attention and the potential disruptive effect on Casper’s day-to-day operations and Casper’s relationships with financing sources, customers, suppliers and other third parties, any or all of which risks and costs, among other things, could adversely affect Casper’s cash and liquidity position, business, overall competitive position and the trading price of its common stock;
|
|
•
|
the requirement under certain circumstances that Casper pay Parent a termination fee following termination of the Merger Agreement, including if the Merger Agreement is terminated by Casper in order to enter into a Superior Proposal or by Parent because the Board of Directors effects a Company Board Recommendation Change;
|
|
•
|
if Parent fails to complete the Merger as a result of failure to obtain the Debt Financing (as defined in the section of this proxy statement captioned “The Merger—Financing of the Merger”) or as a breach of the Merger Agreement in certain circumstances, remedies may be limited to the termination fee payable by Parent described above, which may be inadequate to compensate Casper for the damage caused;
|
|
•
|
the restrictions on the conduct of Casper’s business prior to the consummation of the Merger, which may delay or prevent Casper from raising financing or undertaking other business opportunities that may arise before the completion of the Merger and that, absent the Merger Agreement, Casper might have pursued;
|
|
•
|
the fact that an all cash transaction would be taxable to Casper’s stockholders that are U.S. persons for U.S. federal income tax purposes;
|
|
•
|
the fact that under the terms of the Merger Agreement, Casper is unable to solicit other Acquisition Proposals;
|
|
•
|
the significant costs involved in connection with entering into the Merger Agreement and completing the Merger (many of which are payable whether or not the Merger is consummated) and the substantial time and effort of Casper management required to complete the Merger, which may disrupt its business operations and have a negative effect on its financial results;
|
|
•
|
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 Casper common stock;
|
|
•
|
the fact that the completion of the Merger requires regulatory clearance under the HSR Act, which could subject the Merger to unforeseen delays and risks;
|
|
•
|
the fact that Casper’s directors and officers may have interests in the Merger that may be different from, or in addition to, those of Casper’s stockholders generally (see below under the caption “—Interests of Executive Officers and Directors of Casper in the Merger”); and
|
|
•
|
the possible loss of key management or other personnel of Casper during the pendency of the Merger.
|
|
•
|
reviewed a draft dated November 14, 2021 of the Merger Agreement;
|
|
•
|
reviewed certain publicly available financial and other information about the Company;
|
|
•
|
reviewed certain information furnished to Jefferies and approved for its use by the Company’s management, including financial forecasts, estimates and analyses, relating to the business, operations and prospects of the Company (the “Casper Forecasts”);
|
|
•
|
held discussions with members of senior management of the Company concerning the matters described in the second and third bullets above;
|
|
•
|
reviewed the share trading price history and valuation multiples for the Casper common stock and compared them with those of certain publicly traded companies that Jefferies deemed relevant;
|
|
•
|
reviewed and compared the proposed financial terms of the Merger with the financial terms of certain other transactions that Jefferies deemed relevant; and
|
|
•
|
conducted such other financial studies, analyses and investigations as Jefferies deemed appropriate.
|
|
•
|
Tempur Sealy International, Inc.
|
|
•
|
Purple Innovation, Inc.
|
|
•
|
Sleep Number Corporation
|
|
•
|
RH (formerly Restoration Hardware, Inc.)
|
|
•
|
Williams-Sonoma, Inc.
|
|
•
|
Wayfair Inc.
|
|
•
|
Ethan Allen Interiors Inc.
|
|
•
|
Kirkland’s, Inc.
|
|
•
|
Made.com Group plc
|
|
•
|
Blue Apron Holdings, Inc.
|
|
|
| |
EV / FY2023E
Adjusted EBITDA Multiples
|
||||||
|
Industry
|
| |
Low
|
| |
High
|
| |
Median
|
|
Mattress
|
| |
6.9x
|
| |
8.7x
|
| |
8.2x
|
|
Home Furnishing
|
| |
9.7x
|
| |
29.0x
|
| |
14.7x
|
|
e-Commerce
|
| |
14.2x
|
| |
14.2x
|
| |
14.2x
|
|
|
| |
1 day Prior
|
| |
30 days Prior
|
|
All Industries
|
| |
28.1%
|
| |
31.3%
|
|
Consumer & Retail
|
| |
27.7%
|
| |
28.5%
|
|
|
| |
Selected Range of Implied Premium
|
| |
Implied Per Share Equity Value
|
|
All Industries - 1 day prior
|
| |
10.6% - 45.5%
|
| |
$3.95 - $5.15
|
|
All Industries - 30 days prior
|
| |
12.1% - 50.5%
|
| |
$4.80 - $6.45
|
|
Consumer & Retail - 1 day prior
|
| |
12.5% - 42.9%
|
| |
$4.00 - $5.05
|
|
Consumer & Retail - 30 days prior
|
| |
12.8% - 44.2%
|
| |
$4.85 - $6.20
|
|
|
| |
September Plan
CY2021E(1)(2)(3)
|
| |
CY2021E(4)
|
| |
CY2022P(4)
|
| |
CY2023P(4)
|
| |
CY2024P(4)
|
| |
CY2025P(4)
|
| |
CY2026P(4)
|
|
(all amounts in millions)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Revenue
|
| |
$600
|
| |
$604
|
| |
$688
|
| |
$780
|
| |
$881
|
| |
$984
|
| |
$1,087
|
|
Adj. EBITDA(5)
|
| |
$(28)
|
| |
$(41)
|
| |
$5
|
| |
$32
|
| |
$63
|
| |
$96
|
| |
$132
|
|
EBITDA (net of SBC)(6)
|
| |
$—
|
| |
$(77)
|
| |
$(18)
|
| |
$17
|
| |
$46
|
| |
$78
|
| |
$114
|
|
NOPAT(7)
|
| |
$—
|
| |
$(94)
|
| |
$(34)
|
| |
$0
|
| |
$22
|
| |
$45
|
| |
$75
|
|
Unlevered CFO(8)
|
| |
$—
|
| |
$(99)
|
| |
$(55)
|
| |
$7
|
| |
$27
|
| |
$50
|
| |
$75
|
|
Unlevered FCF(9)
|
| |
$—
|
| |
$(75)
|
| |
$(60)
|
| |
$(2)
|
| |
$18
|
| |
$41
|
| |
$66
|
|
1)
|
Casper’s fiscal year ends December 31st.
|
|
2)
|
Represents CY2021E from the September Long-Range Plan.
|
|
3)
|
For purposes of the CY2021E from the September Long-Range Plan, EBITDA (net of SBC), EBIT, NOPAT, Unlevered CFO and Unlevered FCF were not initially calculated.
|
|
4)
|
Represents the September Long-Range Plan as updated for the Q3 Preliminary Results and the Q4 Financial Forecast, as of November 14, 2021.
|
|
5)
|
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a non-GAAP financial measure which was calculated in the Management Projections as earnings (loss) before interest (income) expense, income tax expense and depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense, restructuring costs, costs associated with legal settlements and transactions costs incurred in connection with the Company’s initial public offering, as of November 14, 2021.
|
|
6)
|
Earnings before Interest, Taxes, Depreciation and Amortization (net of restructuring costs and Stock Based Compensation) is a non-GAAP financial measure which was calculated in the Management Projections as earnings (loss) before interest (income) expense, income tax expense and depreciation and amortization as further adjusted to exclude the impact of transaction costs incurred in connection with the Company’s initial public offering, as of November 14, 2021.
|
|
7)
|
Net Operating Profit after Tax (“NOPAT”) is a non-GAAP financial measure which was calculated in the Management Projections as EBITDA (net of SBC) less Depreciation and Amortization (“EBIT”) less implied taxes using a blended federal and state tax rate applied to positive EBIT, as of November 14, 2021. Net operating losses were valued separately and not used to offset the effect of taxes when calculating Unlevered Cash Flow from Operations (see below).
|
|
8)
|
Unlevered Cash Flow from Operations (“Unlevered CFO”) is a non-GAAP financial measure which was calculated in the Management Projections as NOPAT plus depreciation and amortization less changes in net working capital as of November 14, 2021.
|
|
9)
|
“Unlevered Free Cash Flow” is NOPAT plus depreciation and amortization expense less changes in net working capital less capex and other adjustments.
|
|
(all amounts in millions)(1)
|
| |
|
|
Net Revenue
|
| |
$169
|
|
Gross Profit
|
| |
$72
|
|
Operating Expenses(2)
|
| |
$83
|
|
EBITDA(3)
|
| |
$(10)
|
|
Capital Expenditures
|
| |
$(5)
|
|
1)
|
For purposes of the Q4 Financial Forecast, EBITDA (net of SBC) and NOPAT were not calculated.
|
|
2)
|
Excludes depreciation and amortization and stock-based compensation.
|
|
3)
|
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is a non-GAAP financial measure which was calculated in the Management Projections as earnings (loss) before interest (income) expense, income tax expense and depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense, restructuring costs, costs associated with legal settlements and transactions costs incurred in connection with the Company’s initial public offering, as of November 14, 2021.
|
|
|
| |
2021E(2)
|
| |
Jan 22 E
|
| |
Feb 22 E
|
|
(all amounts in millions)(1)
|
| |
|
| |
|
| |
|
|
Beginning Cash Balance
|
| |
$92
|
| |
$19
|
| |
$1
|
|
Cash Flow
|
| |
$(73)
|
| |
$(18)
|
| |
$—
|
|
Ending Cash Balance
|
| |
$19
|
| |
$1
|
| |
$1
|
|
1)
|
The following table presents a summary of the Cash Flow Projections, with all figures rounded to the nearest million.
|
|
2)
|
2021E Beginning Cash Balance was updated for the 2020 year end cash balance (which included restricted cash).
|
|
•
|
The “named executive officers” of Casper are:
|
|
•
|
Philip Krim, Chief Executive Officer for fiscal year 2020 (through November 15, 2021) and current Non-Executive Chairman of the Board of Directors;
|
|
•
|
Emilie Arel, President and Chief Commercial Officer for fiscal year 2020 (through November 15, 2021) and current President and Chief Executive Officer; and
|
|
•
|
Michael Monahan, Chief Financial Officer for fiscal years 2020 and 2021.
|
|
•
|
The executive officers of Casper since the beginning of Casper’s last fiscal year on January 1, 2020 are:
|
|
•
|
the named executive officers;
|
|
•
|
Neil Parikh, Chief Strategy Officer for fiscal year 2020 (through January 31, 2021) and current member of the Board of Directors;
|
|
•
|
Gregory MacFarlane, Chief Financial Officer and Chief Operating Officer during fiscal year 2020 (through May 15, 2020);
|
|
•
|
Elizabeth Wolfson, Chief People Officer for fiscal year 2020 (through January 3, 2021);
|
|
•
|
Jeffrey Chapin, Chief Product Officer for fiscal year 2020 (through January 31, 2021) and currently an advisor to the Company;
|
|
•
|
Stuart Brown, Chief Financial Officer during fiscal year 2020 (From May 15, 2020 through August 31, 2020); and
|
|
•
|
Jonathan Truppman, General Counsel, Secretary for fiscal years 2020 and 2021.
|
|
•
|
a lump sum payment equal to 18 months of her annual base salary;
|
|
•
|
a lump sum payment equal to 100% of her annual base salary, which represents her annual target bonus;
|
|
•
|
a lump sum cash payment equal to 18 months of the cost of COBRA premiums; and
|
|
•
|
accelerated vesting of 100% of any then-unvested shares and other equity awards.
|
|
•
|
a lump sum payment equal to the sum of (i) the executive’s then-current base salary, and (ii) the executive’s then-current annual target bonus;
|
|
•
|
up to 12 months of COBRA premiums (or a taxable payment in an amount equal to such premiums); and
|
|
•
|
accelerated vesting of 100% of all outstanding equity awards (and with respect to awards that would otherwise vest upon satisfaction of performance criteria, this acceleration will apply at the greater of the target or actual (based on performance achieved through such date) level of the performance criteria).
|
|
•
|
a lump sum payment equal to 18 months of his annual base salary;
|
|
•
|
a lump sum payment equal to 100% of his annual base salary, which represents his annual target bonus;
|
|
•
|
a lump sum cash payment equal to 18 months of the cost of COBRA; and
|
|
•
|
accelerated vesting of 100% of any then-unvested equity awards.
|
|
•
|
continued base salary for 12 months;
|
|
•
|
his annual bonus earned with respect to fiscal year 2021 (regardless of any continued service requirement), payable when such bonuses are typically paid; and
|
|
•
|
up to 12 months of COBRA premiums (or a taxable payment in an amount equal to such premiums).
|
|
•
|
subject to his continued service through the end of the consulting period, (i) any unvested equity awards held by him as of January 1, 2022 will continue to vest in pro-rata monthly installments as of the last day of each calendar month during the consulting period, and (ii) as of the last day of the consulting period, all equity awards that would otherwise have become vested through March 5, 2024 will become fully vested, with any vested restricted stock units being settled within 60 days following the date the award vests; and
|
|
•
|
an extension of the post-termination exercise period for all stock options held by him as of January 1, 2022 through January 1, 2027.
|
|
Name
|
| |
Cash
($)(1)
|
| |
Equity
($)(2)
|
| |
Perquisites/
Benefits
($)(3)
|
| |
Other
(4)
|
| |
Total
($)(5)
|
|
Philip Krim
|
| |
1,500,000
|
| |
3,676,568
|
| |
52,071
|
| |
—
|
| |
5,228,639
|
|
Emilie Arel
|
| |
1,875,000
|
| |
3,411,787
|
| |
22,873
|
| |
600,000
|
| |
5,909,660
|
|
Michael Monahan
|
| |
825,000
|
| |
1,358,755
|
| |
33,796
|
| |
500,000
|
| |
2,717,551
|
|
(1)
|
Cash. For Mr. Krim and Ms. Arel, represents the double trigger cash severance that the named executive officer is eligible to receive pursuant to their employment agreement upon a qualifying termination of employment that occurs within the period beginning three months before and ending 12 months after a change in control (which includes the Merger), equal to the sum of (i) 18 months of the named executive officer’s annual base salary, and (ii) 100% of the named executive officer’s annual base salary (representing the named executive officer’s annual target bonus). As described above, Mr. Krim has entered into the Krim Transition Agreement pursuant to which he transitioned from the role of our Chief Executive Officer to the Non-Executive Chairman of the Board of Directors. The figures set forth in the table above assumes that Mr. Krim’s separation date will occur within the change in control protection period which would entitle him to the double-trigger severance payments set forth in his employment agreement, as provided for under his Transition Agreement.
|
|
Name
|
| |
Salary
Severance ($)
|
| |
Target Annual
Bonus ($)
|
|
Philip Krim
|
| |
900,000
|
| |
600,000
|
|
Emilie Arel
|
| |
1,125,000
|
| |
750,000
|
|
Michael Monahan
|
| |
500,000
|
| |
325,000
|
|
(2)
|
Equity. Under the Merger Agreement, at the Effective Time each Company RSU Award and each Company PSU Award that is outstanding immediately prior to the Effective Time shall be cancelled and converted into the right to receive the RSU Consideration and the PSU Consideration, respectively.
|
|
Name
|
| |
Unvested RSUs ($)
|
| |
Unvested PSUs ($)
|
|
Philip Krim
|
| |
2,170,015
|
| |
1,506,553
|
|
Emilie Arel
|
| |
2,336,560
|
| |
1,075,227
|
|
Michael Monahan
|
| |
1,170,433
|
| |
188,322
|
|
(3)
|
Perquisites/Benefits. Represents the estimated value of Casper-paid COBRA continuation benefits. Under the double trigger arrangements in Mr. Krim’s and Ms. Arel’s employment agreements and Mr. Monahan’s Severance Agreement, as each are described in footnote (1) above, Mr. Krim and Ms. Arel are eligible to receive a lump sum cash payment equal to the cost of 18 months of Casper-paid COBRA continuation benefits, and Mr. Monahan is eligible to receive up to 12 months of Casper-paid COBRA continuation benefits.
|
|
(4)
|
Supplemental Bonuses. Represents the supplemental bonus payable to Ms. Arel and Mr. Monahan subject to their continued employment through the one-year anniversary of the consummation of the Merger, or upon a qualifying termination prior to such date. The arrangements governing the supplemental bonuses constitute single-trigger arrangements.
|
|
(5)
|
Total. Under the Mr. Krim’s and Ms. Arel’s employment agreements and Mr. Monahan’s Severance Agreement, amounts are subject to reduction in the event the named executive officer would be better off on an after-tax basis being cut back than paying the excise tax under Section 4999 of the Code. This amount assumes no such reductions will be applied.
|
|
•
|
$65,000,000 senior secured asset-based revolving credit facility;
|
|
•
|
$20,000,000 senior secured term credit facility (Series A FILO Facility); and
|
|
•
|
$15,000,000 senior secured term credit facility (Series B FILO Facility).
|
|
•
|
the execution and delivery by Parent and certain of its affiliates and subsidiaries serving as guarantors of definitive documentation for the Debt Financing;
|
|
•
|
the consummation in all material respects of the Merger in accordance with the Merger Agreement (without giving effect to any amendments, consents or waivers by Parent thereto that are materially adverse to the lenders in their capacity as such without the consent of the lenders party to the Debt Commitment Letter, such consent not to be unreasonably withheld, delayed or conditioned);
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subject to certain limitations and exceptions, the accuracy as of the Closing Date of certain specified representations and warranties in the Merger Agreement and certain specified representations and warranties in the loan documents;
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the Equity Financing shall have been made or, substantially simultaneously with the initial funding of the Debt Financing, shall be made;
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the delivery of certain customary closing documents (including a customary solvency certificate);
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the receipt by the lenders party to the Debt Commitment Letter of certain documentation and other information about the borrowers and guarantors required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act and the Customer Due Diligence Requirements for Financial Institutions issued by the U.S. Department of Treasury Financial Crimes Enforcement Network under the Bank Secrecy Act (such rule published May 11, 2016 and effective May 11, 2018));
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the delivery of certain audited and unaudited financial statements of the Casper Group;
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the payment of applicable invoiced fees and expenses;
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the refinancing of the Credit Facilities shall have been consummated or, substantially simultaneously with the initial funding of the Debt Financing, shall be consummated; and
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the absence of a Company Material Adverse Effect since the Agreement Date that is continuing.
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the consummation of the closing of the Merger;
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the termination of the Merger Agreement in accordance with its terms under circumstances in which Parent would not be obligated to pay the Parent Termination Fee or the Reimbursement Obligations;
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the three-month anniversary of any termination of the Merger Agreement in accordance with its terms if, by such three-month anniversary, Casper has not commenced a legal proceeding against Parent alleging that the Parent Termination Fee is due and owing or against the Durational Vehicle alleging that amounts are due and owing from Durational Vehicle pursuant to the Limited Guarantee; or
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the payment of the Guaranteed Obligations by the Durational Vehicle or Parent in full in cash in an amount up to $24,375,000.
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the stockholder must not vote in favor of the proposal to adopt the Merger Agreement or consent thereto in writing;
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the stockholder must deliver to Casper a written demand for appraisal before the vote on the Merger Agreement at the Special Meeting;
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the stockholder must continuously hold the shares from the date of making the demand through the Effective Time (a stockholder will lose appraisal rights if the stockholder transfers the shares before the Effective Time); and
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the stockholder (or any person who is the beneficial owner of shares of Casper common stock held either in a voting trust or by a nominee on behalf of such person) or the Surviving Corporation must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the Effective Time. The Surviving Corporation is under no obligation to file any petition and has no intention of doing so.
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banks and other financial institutions;
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mutual funds;
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insurance companies;
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brokers or dealers in securities, currencies or commodities;
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dealers or traders in securities subject to a mark-to-market method of accounting;
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regulated investment companies and real estate investment trusts;
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tax-qualified retirement plans;
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tax-exempt organizations, governmental agencies, instrumentalities or other governmental organizations and pension funds;
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holders that are holding shares of Casper common stock as part of a “straddle,” hedge, constructive sale, or other integrated transaction or conversion transaction or similar transactions;
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U.S. Holders whose functional currency is not the U.S. dollar;
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entities classified as partnerships for U.S. federal income tax purposes, “S corporations” or any other pass-through entities for U.S. federal income tax purposes (or investors in such entities);
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expatriated entities subject to Section 7874 of the Code;
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U.S. expatriates and former citizens or long-term residents of the United States;
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holders that own or have owned (directly, indirectly or constructively) five percent or more of Casper common stock (by vote or value);
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holders required to accelerate the recognition of any item of gross income with respect to their shares as a result of such income being recognized on an applicable financial statement;
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grantor trusts;
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“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
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persons who hold or received Casper common stock pursuant to the exercise of any employee stock option, in connection with a restricted stock unit award or company performance stock unit award or otherwise in a compensatory transaction;
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holders that own an equity interest in Parent following the Merger;
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holders that hold their Casper common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States; and
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holders that do not vote in favor of the Merger and that properly demand appraisal of their shares under Section 262 of the DGCL.
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an individual who is a citizen or resident of the United States;
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a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
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a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
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the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by such Non-U.S. Holder in the United States);
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the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition of shares of Casper common stock pursuant to the Merger and certain other requirements are met; or
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shares of Casper common stock constitute a United States real property interest (“USRPI”) by reason of Casper’s status as a United States real property holding corporation (“USRPHC”) for U.S. federal income tax purposes and one or more other conditions are satisfied.
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general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global economy generally;
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conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world, including (i) changes in interest rates or credit ratings in the United States or any other country; (ii) changes in exchange rates for the currencies of any country; or (iii) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;
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general conditions in the industries in which the Casper Group generally conducts business;
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regulatory, legislative or political conditions in the United States or any other country or region in the world;
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geopolitical conditions, outbreak of hostilities, acts of war, sabotage, terrorism or military actions (including any escalation or general worsening of any such hostilities, acts of war, sabotage, terrorism or military actions) in the United States or any other country or region in the world;
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earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, pandemics (including SARS-CoV-2 or COVID-19, any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks (“COVID-19”)), epidemics or other outbreaks of diseases, quarantine restrictions, weather conditions and other force majeure events in the United States or any other country or region in the world (or escalation or worsening of any such events or occurrences, including, as applicable, subsequent wave(s));
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resulting from the announcement, pendency, or consummation of the Merger Agreement or the transactions contemplated thereby, including the impact thereof on the relationships, contractual or otherwise, of the Casper Group with employees, suppliers, customers, partners, vendors or any other third person (except with respect to any representation or warranty to the extent that such representation or warranty expressly addresses consequences resulting from the execution or performance of the Merger Agreement or the consummation or pendency of the transactions contemplated thereby);
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the taking of any action expressly required to be taken or expressly prohibited from being taken pursuant to or in accordance with the Merger Agreement;
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arising from any action taken or refrained from being taken, in each case to which Parent has expressly approved, consented to or requested in writing following the date of the Merger Agreement;
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changes in GAAP or other accounting standards or in any applicable laws or regulations (or the official interpretation of any of the foregoing);
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any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety or similar law, directive, guidelines or recommendations promulgated by any governmental authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19 (“COVID-19 Measures”);
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the price or trading volume of Casper common stock, in and of itself or any change, in and of itself, in the credit ratings or ratings outlook of any Casper Group Member (it being understood that any cause of such change to the extent not otherwise falling within any of the exceptions provided in the preceding eleven bullets or the following four bullets may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
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any failure, in and of itself, by the Casper Group to meet (i) any public estimates or expectations of Casper’s revenue, earnings or other financial performance or results of operations for any period; or (ii) any internal budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that any cause of any such failure (to the extent not otherwise falling within any of the exceptions provided in the preceding twelve bullets or the following three bullets) may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur if not otherwise excluded in the definition of Company Material Adverse Effect);
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the availability or cost of equity, debt or other financing to Parent, Merger Sub, or to Casper;
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any legal proceeding commenced or threatened in writing against Parent, Merger Sub or Casper, or any of their subsidiaries or affiliates or otherwise relating to, involving or affecting such parties or any of their subsidiaries or affiliates, in each case in connection with, arising from or otherwise relating to or regarding the Merger and other transactions contemplated by the Merger Agreement, including any legal proceeding or alleging or asserting any misrepresentation or omission in this proxy statement, any other required company filing or any other communications to the Casper stockholders, other than any legal proceedings among the Parent, Merger Sub and Casper or with the agents, arrangers and lenders that provide or arrange the Debt Financing; and
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certain other matters specified in the confidential disclosure letter to the Merger Agreement,
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due organization, valid existence, good standing and authority and qualification to conduct business with respect to Casper;
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Casper’s corporate power and authority to enter into and perform the Merger Agreement and the enforceability of the Merger Agreement;
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the necessary approval of the Board of Directors;
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the rendering of Jefferies’ written opinion (or an oral opinion to be confirmed in writing) to the Board of Directors;
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the necessary vote of stockholders in connection with the Merger Agreement;
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the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws to Casper or the resulting creation of any lien upon Casper’s assets due to the performance of the Merger Agreement;
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required consents, approvals and regulatory filings in connection with the Merger Agreement and performance thereof;
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the organizational documents of Casper;
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the capital structure of Casper;
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the absence of any undisclosed exchangeable security, option, warrant or other right convertible into Casper common stock;
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the absence of any undisclosed contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any of Casper’s securities;
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the subsidiaries of Casper;
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the accuracy and required filings of Casper’s SEC filings and financial statements;
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Casper’s disclosure controls and procedures;
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Casper’s internal accounting controls and procedures;
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absence of any undisclosed transactions, relations or understandings between a Casper Group Member, on the one hand, and any affiliate or related person thereof, on the other hand;
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the absence of specified undisclosed liabilities;
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since December 31, 2020 through the date of the Merger Agreement, (a) Casper has conducted its business in the ordinary course of business consistent with past practice except any actions taken in good faith to respond to COVID-19 Measures and (b) there has not occurred (i) any Company Material Adverse Effect or (ii) certain actions taken by the Casper or events that would have required the consent of Casper pursuant to the terms of the Merger Agreement had such action or event occurred after the date of the Merger Agreement;
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certain real property and tangible property owned or leased, subleased, or licensed, or other occupancy arrangements, by a Casper Group Member;
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trademarks, patents, marks, copyrights, domain names and other intellectual property matters including data security requirements and privacy;
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the existence and enforceability of specified categories of Casper’s material contracts, and the absence of breaches or defaults in respect thereof;
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tax matters;
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employee benefit plans;
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labor matters;
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environmental matters;
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Casper’s compliance with laws, standards and requirements and possession of necessary permits;
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export controls matters and compliance with applicable anti-corruption and anti-money laundering laws;
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litigation and regulatory matters;
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insurance matters;
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product, product return, and product defect and warranty matters;
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the inapplicability of anti-takeover statutes to the Merger;
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payment of fees to brokers in connection with the Merger Agreement; and
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the exclusivity and terms of the representations and warranties made by Parent and Merger Sub.
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due organization, good standing and authority and qualification to conduct business with respect to Parent and Merger Sub and availability of these documents;
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Parent’s and Merger Sub’s corporate authority to enter into and perform the Merger Agreement and the enforceability of the Merger Agreement;
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the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws or the resulting creation of any lien upon Parent or Merger Sub’s assets due to the performance of the Merger Agreement;
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required consents and regulatory filings in connection with the Merger Agreement;
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the organizational documents of Parent and Merger Sub;
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the absence of litigation, orders and investigations;
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accuracy of information to be provided by or on behalf of the Parent or its subsidiaries in the proxy statement;
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ownership of capital stock of Casper;
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payment of fees to brokers in connection with the Merger Agreement;
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operations of Parent and Merger Sub;
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the absence of any required consent of holders of voting interests in Parent;
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delivery and enforceability of each of the Limited Guarantee, Equity Commitment Letter, Debt Commitment Letter and a certain redacted fee letter dated as of November 14, 2021;
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the commitments to provide financing to Parent, the availability of Parent’s financing and sufficiency of funds;
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the absence of any stockholder or management arrangements related to the Merger;
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the solvency of Parent and its subsidiaries following the consummation of the Merger and the transactions contemplated by the Merger Agreement; and
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the exclusivity and terms of the representations and warranties made by Casper.
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subject to the restrictions and exceptions in the Merger Agreement, use reasonable best efforts to carry on its business, in all material respects, in the ordinary course of business consistent with past practice; and
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use its reasonable best efforts to (A) preserve intact its present business, (B) keep available the services of its officers and employees and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees and other Persons (as defined in the Merger Agreement) with which it has significant business dealings.
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propose to adopt any amendments to or amend the organizational documents of any member of the Casper Group;
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authorize for issuance, issue, sell, deliver or grant any shares of capital stock or any restricted stock units, options, warrants, other equity-based commitments, subscriptions or rights to purchase any similar capital stock or securities of the Casper Group;
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acquire, redeem, or amend any securities of the Casper Group;
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split, combine, or modify the terms of capital stock of Casper;
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declare, set aside or pay any dividend or other distribution;
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liquidate, dissolve or reorganize;
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incur or assume any long-term or short-term debt or issue any debt securities;
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|
enter into, adopt, amend, modify, renew or terminate any employee plan;
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pay any special bonus, remuneration or benefit to any director or to any officer or employee not required by any plan or arrangement as in effect as of the date of the Merger Agreement;
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(A) hire, engage, promote, temporarily layoff, furlough or terminate (other than termination for cause) any employee who is at or above Level 8 (based upon Casper’s current methodology of employee level classification) or (B) accelerate, increase or decrease the compensation, remuneration or benefits of any employee, independent contractor or other service provider whose annual base compensation exceeds $125,000 (or announce or promise to do any of the foregoing);
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waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;
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implement or announce any facility closings, employee layoffs, furloughs or other such actions that could implicate the Worker Adjustment and Retraining Notification Act of 1988;
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forgive any loans to any of its employees, officers or directors or any employees, officers or directors of any Casper Group Member;
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make any deposits or contributions of cash or other property or take any other action to fund or in any other way (through a grantor trust or otherwise) secure the payment of compensation or benefits under any Casper Group Member employee benefit plans;
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|
enter into, amend, negotiate or extend any labor agreement or recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of any Casper Group Member;
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acquire, sell, lease, license or dispose of any material property or assets in any single transaction or series of related transactions, except for existing contracts made available to Parent or that are set forth on the confidential disclosure letter or transactions in the ordinary course of business consistent with past practice and not in excess of $500,000 individually, or $1,000,000 in the aggregate, or sales of inventory in the ordinary course of business consistent with past practice;
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make any material change to accounting principles or practices;
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undertake certain tax-related actions;
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|
enter into, amend or grant any release or waiver under any material contracts, Company IP Contracts and Company Relationship Contracts (as defined in the Merger Agreement);
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|
enter into, amend or renew any material real property leases;
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•
|
fail to maintain or allow to lapse, dispose of or abandon any material intellectual property used in or held for use in any Casper Group Member’s business, or grant permission to enter into the public domain any material trade secrets included in any Casper Group Member’s intellectual property;
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grant any rights, or divest, with respect to any of Casper Group Member’s material intellectual property rights, or modify the standard warranty terms for Casper’s products and services or materially amend or modify any product or service warranty other than in the ordinary course of business consistent with past practice;
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acquire any other Person (as defined in the Merger Agreement) or any equity interest therein;
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authorize, incur or commit to incur any capital expenditure(s) that in the aggregate exceeds, in any given fiscal quarter, 110% of the amount set forth in Casper’s capital expenditure budget, as made available to Parent prior to the date of the Merger Agreement, with respect to such fiscal quarter;
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settle litigation involving Casper, other than the settlement of litigation solely involving monetary damages and in amounts not exceeding $500,000 individually or $1,000,000 in the aggregate;
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revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
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enter into any contract with any broker, finder, investment banker or other person under which such person may be entitled to any brokerage, finder’s or other similar fee or commission;
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enter into any contract or other arrangement or understanding that would be required to be disclosed under Item 404(a) of Regulation S-K;
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convene any special meeting of Casper Stockholders or propose any matters for consideration and a vote of Casper Stockholders at the Special Meeting other than expressly permitted or required by the Merger Agreement;
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enter into or adopt any “poison pill” or similar stockholder rights plan; or
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|
enter into agreements or otherwise make a binding commitment to do any of the foregoing.
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|
solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist any inquiry, or offer or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal;
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|
furnish to any third person any non-public information relating to the Casper Group or afford to any third person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Casper Group, in any such case with the intent to induce, or that could reasonably be expected to result in, or in response to, the making, submission or announcement of, or to knowingly encourage, facilitate or assist any inquiry or offer or proposal that constitutes, or would reasonably be expected to lead to an Acquisition Proposal;
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|
enter into, engage in, knowingly encourage, continue or otherwise participate in any discussions, communications or negotiations with any third person with respect to any inquiry or offer or proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal;
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|
approve, endorse or recommend any offer or proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; or
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|
enter into any letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement or other contract relating to an Acquisition Transaction, other than an Acceptable Confidentiality Agreement.
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(1)
|
any direct or indirect purchase or other acquisition by any third person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons, whether from Casper or any other person(s), of securities representing more than 20% of the total outstanding voting power of Casper after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any person or “group” of persons that, if consummated in accordance with its terms, would result in such person or “group” of persons beneficially owning more than 20% of the total outstanding voting power of Casper after giving effect to the consummation of such tender or exchange offer;
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(2)
|
any direct or indirect purchase, exclusive license or other acquisition by any third person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons of assets constituting or accounting for more than 20% of the consolidated assets, revenue or net income of the Casper Group, taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or
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(3)
|
any merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction involving Casper pursuant to which (x) any third person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons would hold securities representing more than 20% of the total outstanding voting power of Casper outstanding after giving effect to the consummation of such transaction or (y) the stockholders of Casper immediately preceding such transaction hold less than 80% of the equity interests of the surviving or resulting entity of such transaction.
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•
|
withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the recommendation of the Board of Directors to approve the Merger, in each case, in a manner adverse to Parent in any material respect (it being understood that it will be considered a modification adverse to Parent in a material respect if (i) any Acquisition Proposal structured as a tender or exchange offer is commenced and the Board of Directors fails to publicly recommend against acceptance of such tender or exchange offer by stockholders within ten (10) business days of commencement thereof pursuant to Rule 14d-2 of the Exchange Act or (ii) any Acquisition Proposal is publicly announced (other than by the commencement of a tender or exchange offer) and the Board of Directors fails to issue a public press release within ten (10) business days of such public announcement providing that the Board of Directors reaffirms the Casper recommendation);
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•
|
adopt, authorize, approve, agree to, accept, endorse, recommend, submit to the vote of Casper Stockholders or otherwise declare advisable (or propose to adopt, authorize, approve, agree to, accept, endorse, recommend, submit to vote of the Casper Stockholders or otherwise declare advisable) an Acquisition Proposal;
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•
|
fail to publicly reaffirm the recommendation of the Board of Directors to approve the Merger within four (4) business days after Parent so requests in writing (it being understood that Casper will have no obligation to make such reaffirmation on more than two separate occasions);
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•
|
fail to include the recommendation of the Board of Directors to approve the Merger in this proxy statement; or
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•
|
formally resolve to effect, publicly announce an intention or resolution to, or agree to take any of the foregoing actions.
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|
•
|
Casper has provided prior written notice to Parent at least four (4) business days in advance to the effect that the Board of Directors (or a committee thereof) intends to effect a Company Board Recommendation Change pursuant to the Merger Agreement, which notice must specify the basis for such Company Board Recommendation Change, including a description of the Intervening Event in reasonable detail;
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•
|
prior to effecting such Company Board Recommendation Change, Casper and its representatives, during such four business-day period, must have (i) negotiated with Parent and its representatives in good faith (to the extent that Parent desires to so negotiate) to allow Parent to offer such adjustments to the terms and conditions of the Merger Agreement, the Financing Letters and/or the Limited Guarantee to obviate the need to effect a Company Board Recommendation Change in response to such Intervening Event; and (ii) taken into account any adjustments to the terms and conditions of the Merger Agreement, the Financing Letters and/or the Limited Guarantee proposed by Parent and other information provided by
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•
|
following the four business-day notice period described above, the Board of Directors (or a committee thereof) (after consultation with its outside legal counsel and taking into account Parent’s proposed revisions to the terms and conditions of the Merger Agreement) shall have determined in good faith that the failure of the Board of Directors (or a committee thereof) to make such a Company Board Recommendation Change would reasonably be expected to be inconsistent with its fiduciary duties pursuant to applicable law; provided, that each time material modifications to the Intervening Event occur, Casper must notify Parent of such modification and the four business-day period described above will recommence and be extended for three (3) business days from the day of such notification.
|
|
•
|
the Board of Directors (or a committee thereof) determines in good faith (after consultation with its outside legal counsel) that the failure to do so would reasonably be expected to be inconsistent with its fiduciary duties pursuant to applicable law;
|
|
•
|
the Casper Group and its representatives have complied with the requirements of and their obligations under the non-solicitation provisions in the Merger Agreement;
|
|
•
|
Casper has provided prior written notice to Parent at least four (4) business days in advance to the effect that the Board of Directors (or a committee thereof) has (i) received a bona fide Acquisition Proposal that has not been withdrawn; (ii) concluded in good faith that such Acquisition Proposal constitutes a Superior Proposal; and (iii) resolved to effect a Company Board Recommendation Change or to terminate the Merger Agreement absent any revision to the terms and conditions of the Merger Agreement, which notice will specify the basis for such Company Board Recommendation Change or termination, including the identity of the person or “group” of persons making such Acquisition Proposal (unless such disclosure is prohibited pursuant to the terms of any confidentiality agreement with such person or “group” of persons that was in effect on the date of the Merger Agreement), the material terms thereof and copies of all relevant documents relating to such Acquisition Proposal;
|
|
•
|
prior to effecting such Company Board Recommendation Change or termination, Casper and its representatives, during the four business day notice period described above, have: (i) negotiated with Parent and its representatives in good faith (to the extent that Parent desires to so negotiate) to allow Parent to offer such adjustments to the terms and conditions of the Merger Agreement, the Financing Letters and/or the Limited Guarantee so that such Acquisition Proposal would cease to constitute a Superior Proposal; and (ii) taken into account any adjustments to the terms and conditions of the Merger Agreement, Financing Letters and/or the Limited Guarantee that are offered in writing by Parent, no later than 11:59 p.m. (Eastern time) on the last day of the four day notice period described above, in a manner that would constitute a binding agreement between the parties if accepted by Casper, provided, however, that in the event of any material modifications to such Acquisition Proposal (it being understood that any change to the financial terms of such proposal shall be deemed a material modification), Casper will be required to deliver a new written notice to Parent and to comply with the requirements of this clause (it being understood that the four business-day period described above in respect of such new written notice will be three (3) business days);
|
|
•
|
following the four business day notice period described above including any subsequent notice period as provided above, the Board of Directors (or a committee thereof) (after consultation with its financial advisor and outside legal counsel and taking into account Parent’s proposed revisions to the terms and conditions of the Merger Agreement and any other information provided by Parent) shall have
|
|
•
|
in the event of any termination of the Merger Agreement in order to cause or permit the Casper Group to enter into an acquisition agreement with respect to such Acquisition Proposal, Casper will have validly terminated the Merger Agreement in accordance with the terms of the Merger Agreement, so long as the Company has complied in all material respects with the non-solicitation provisions set forth in the Merger Agreement, including paying to Parent a termination fee of $9,140,000.
|
|
•
|
the adoption of the Merger Agreement by the requisite affirmative vote of Casper stockholders;
|
|
•
|
the expiration or termination of the applicable waiting period under the HSR Act and the receipt of any other approvals, consents, waivers or clearances under any other applicable antitrust laws; and
|
|
•
|
the absence of any laws or court orders making the Merger illegal or otherwise prohibiting the Merger.
|
|
•
|
the representations and warranties of Casper relating to organization, good standing, corporate power, enforceability, board approval, the fairness opinion, required stockholder approval, non-contravention with charter or bylaws, and no brokers being true and correct in all material respects as of the Closing Date as if made at and as of such the Closing Date, or the date in respect of which such representation or warranty was specifically made;
|
|
•
|
the representations and warranties of Casper relating to the absence of any Company Material Adverse Effect since December 31, 2020, being true and correct in all respects as of the Closing Date as if made at and as of such the Closing Date;
|
|
•
|
the representations and warranties of Casper relating to certain aspects of Casper’s capitalization being true and correct as of the Closing Date, or the date in respect of which such representation or warranty was specifically made, except where the failure to be so true and correct would not reasonably be expected to result in additional cost, expense or liability to any of Casper, Parent and their affiliates, individually or in the aggregate, that is more than $1,000,000;
|
|
•
|
the other representations and warranties of Casper set forth elsewhere in the Merger Agreement being true and correct as of the Closing Date as if made at and as of Closing Date, or the date in respect of which such representation or warranty was specifically made, except for such failures to be true and correct that would not have a Company Material Adverse Effect;
|
|
•
|
Casper having performed and complied in all material respects with all covenants, obligations and conditions of the Merger Agreement required to be performed and complied with by Casper;
|
|
•
|
the absence of any Company Material Adverse Effect having occurred after the date of Merger Agreement that is continuing; and
|
|
•
|
the receipt by Parent and Merger Sub of a certificate of Casper, validly executed for and on behalf of Casper and in its name by a duly authorized officer thereof, certifying that the conditions described in the preceding six bullets have been satisfied.
|
|
•
|
the representations and warranties of Parent and Merger Sub set forth in the Merger Agreement being true and correct on and as of the Closing Date with the same force and effect as if made on and as of such date, or the date in respect of which such representation or warranty was specifically made, except for any failure to be so true and correct that would not, individually or in the aggregate, reasonably be expected to prevent or materially impair, interfere with, hinder or delay the ability of Parent or Merger Sub to perform their respective obligations under, or to consummate the transactions contemplated by, the Merger Agreement;
|
|
•
|
Parent and Merger Sub having performed and complied in all material respects with all covenants, obligations and conditions of the Merger Agreement required to be performed and complied with by Parent and Merger Sub at or prior to the closing of the Merger; and
|
|
•
|
the receipt by Casper of a certificate of Parent and Merger Sub, validly executed for and on behalf of Parent and Merger Sub and in their respective names by a duly authorized officer thereof, certifying that the conditions described in the preceding two bullets have been satisfied.
|
|
•
|
by mutual written agreement of Casper and Parent;
|
|
•
|
by either Casper or Parent if:
|
|
•
|
prior to the Effective Time, (i) any permanent injunction or other legal or regulatory restraint or prohibition preventing the consummation of the Merger is in effect, that, prohibits, makes illegal or enjoins the consummation of the Merger and has become final and non-appealable; or (ii) any statute, rule or regulation is enacted, entered, or enforced against the Parties by a governmental authority of competent jurisdiction that prohibits, makes illegal or enjoins the consummation of the Merger;
|
|
•
|
the Merger has not been consummated by the Termination Date; or
|
|
•
|
the Casper Stockholders fail to adopt the Merger Agreement at the Special Meeting or any adjournment or postponement thereof.
|
|
•
|
by Parent if:
|
|
•
|
Casper has breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in the Merger Agreement such that certain conditions set forth in the Merger Agreement are not satisfied and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Parent’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date); or
|
|
•
|
prior to the adoption of the Merger Agreement by the Casper Stockholders, the Board of Directors effects a Company Board Recommendation Change or the Company, its affiliates or any of their representatives, acting on behalf of either the Company or its affiliates, shall have willfully and materially breached the obligations set forth in the non-solicitation provisions of the Merger Agreement.
|
|
•
|
by Casper if:
|
|
•
|
Parent or Merger Sub has breached or failed to perform any of its respective representations, warranties, covenants or other agreements set forth in the Merger Agreement such that certain conditions set forth in the Merger Agreement are not satisfied, and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Casper’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date);
|
|
•
|
prior to the adoption of the Merger Agreement by the Casper Stockholders, so long as the Company has complied in all material respects with the non-solicitation provisions set forth in the Merger Agreement, Casper enters into a definitive agreement with respect to a Superior Proposal and has complied with its obligations under the Merger Agreement, subject to Casper paying to Parent a termination fee of $9,140,000; or
|
|
•
|
prior to the Effective Time, (i) the closing obligations of Casper have been and continue to be satisfied; (ii) Parent and Merger Sub have failed to consummate the Merger under the timing restrictions set forth in the Merger Agreement; (iii) Casper has irrevocably notified Parent in writing that, if Parent performs its obligations under the Merger Agreement and the equity
|
|
•
|
(i) (a) by either Parent or Casper because the Merger has not been consummated by the Termination Date, subject to certain exceptions, (b) by either Parent or Casper if Casper Stockholders fail to adopt the Merger Agreement, or (c) by Parent because Casper has breached or failed to perform any of its representations, warranties, covenants or agreements in the Merger Agreement such that certain conditions set forth in the Merger Agreement are not satisfied and such breach is not capable of being cured, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Parent’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date) (each of (a), (b),and (c), an “Applicable Termination”); (ii) an Acquisition Proposal has been publicly announced and not irrevocably withdrawn or abandoned since the date of the Merger Agreement and prior to any Applicable Termination; and (iii) Casper enters into an agreement providing for, or consummates, an Acquisition Transaction within twelve months following such Applicable Termination (provided that, for purposes of the termination fee, all references to “20%” and “80%” in the definition of “Acquisition Transaction” are deemed to be references to “50%”);
|
|
•
|
by Parent, because (i) Casper has breached or failed to perform any of its representations, warranties, covenants or agreements in the Merger Agreement such that certain conditions set forth in the Merger Agreement are not satisfied and such breach is not capable of being cured, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Parent’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date); (ii) the Board of Directors has effected a Company Board Recommendation Change; or (iii) the Company, its affiliates or any of their representatives, acting on behalf of either the Company or its affiliates, shall have willfully and materially breached the obligations set forth in the non-solicitation provisions of the Merger Agreement; or
|
|
•
|
by Casper, to enter into a definitive agreement in respect of a Superior Proposal.
|
|
•
|
by Casper if Parent or Merger Sub has breached or failed to perform any of their respective representations, warranties, covenants or other agreements set forth in the Merger Agreement such that certain conditions set forth in the Merger Agreement are not satisfied, and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Casper’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date);
|
|
•
|
by Casper if prior to the Effective Time, (i) the closing obligations of Casper have been and continue to be satisfied; (ii) Parent and Merger Sub have failed to consummate the Merger under the timing restrictions set forth in the Merger Agreement; (iii) Casper has irrevocably notified Parent in writing
|
|
•
|
by Parent because the Merger has not been consummated by the Termination Date and at such time, Casper could have terminated pursuant to either of the prior two bullets above.
|
|
•
|
each person known by us to beneficially own more than 5% of Casper common stock;
|
|
•
|
each of our directors;
|
|
•
|
each of our named executive officers; and
|
|
•
|
all of our executive officers and directors as a group.
|
|
|
| |
Shares of Casper
Common Stock
beneficially owned
|
| |||||
|
Name of beneficial owner
|
| |
Number
|
| |
Percentage
|
| ||
|
5% Stockholders
|
| |
|
| |
|
| ||
|
Entities affiliated with NEA(1)
|
| |
6,226,130
|
| |
14.95%
|
| ||
|
Entities affiliated with IVP(2)
|
| |
2,415,973
|
| |
5.80
|
| |
%
|
|
Executive Officers and Directors
|
| |
|
| |
|
| ||
|
Philip Krim(3)
|
| |
2,665,027
|
| |
6.33%
|
| ||
|
Emilie Arel(4)
|
| |
463,312
|
| |
1.10%
|
| ||
|
Michael Monahan(5)
|
| |
76,794
|
| |
*%
|
| ||
|
Anthony Florence(6)
|
| |
6,239,834
|
| |
14.99%
|
| ||
|
Diane Irvine(7)
|
| |
54,832
|
| |
*%
|
| ||
|
Karen Katz(8)
|
| |
58,582
|
| |
*%
|
| ||
|
Jack Lazar(9)
|
| |
82,247
|
| |
*%
|
| ||
|
Benjamin Lerer(10)
|
| |
1,309,269
|
| |
3.14%
|
| ||
|
Neil Parikh(11)
|
| |
1,832,212
|
| |
4.37%
|
| ||
|
Dani Reiss(12)
|
| |
175,369
|
| |
*%
|
| ||
|
All executive officers and directors as a group (11 persons)(13)
|
| |
13,141,446
|
| |
30.58%
|
| ||
|
*
|
Less than one percent.
|
|
(1)
|
Based on a Schedule 13D filed with the SEC on November 22, 2021 and information known to the Company. Consists of 6,222,502 shares of Casper common stock held by New Enterprise Associates 14, L.P., or NEA 14, and 3,628 shares of Casper common stock held by NEA Ventures 2014, L.P., or NEA Ventures. NEA Partners 14, L.P., or NEA Partners 14, is the general partner of NEA 14 and NEA 14 GP, LTD, or NEA 14 LTD, is the general partner of NEA Partners 14. The directors of NEA 14 LTD are Forest Baskett, Anthony A. Florence, Jr., Patrick J. Kerins, Scott D. Sandell, and Peter W. Sonsini, or, together, the NEA 14 Directors. NEA Partners 14, NEA 14 LTD and the NEA 14 Directors may be deemed to share voting and dispositive power with regard to the Casper common stock directly held by NEA 14. The shares held by NEA Ventures are indirectly held by Karen P. Welsh, the general partner of NEA Ventures, who has voting and dispositive power with regard to the shares directly held by NEA Ventures. The address for each of these entities and individuals is c/o New Enterprise Associates, Inc., 1954 Greenspring Drive, Suite 600, Timonium, Maryland 21093.
|
|
(2)
|
Based on a Schedule 13G filed with the SEC on February 16, 2021. Consists of (i) 10,577 shares of Casper common stock held by Institutional Venture Partners XV Executive Fund, L.P., or IVP Executive Fund, and (ii) 2,405,396 shares of Casper common stock held by Institutional Venture Partners XV, L.P., or IVP. Institutional Venture Management XV, LLC is the general partner of IVP and IVP
|
|
(3)
|
Consists of (i) 1,647,602 shares of Casper common stock held by Mr. Krim, (ii) 567,425 shares of Casper common stock held in various trusts for which Mr. Krim is the trustee, and (iii) 450,000 shares of Casper common stock subject to options held by Mr. Krim that are exercisable within 60 days of December 2, 2021.
|
|
(4)
|
Consists of (i) 129,562 shares of Casper common stock held by Ms. Arel and (ii) 333,750 shares of Casper common stock subject to options held by Ms. Arel that are exercisable within 60 days of December 2, 2021.
|
|
(5)
|
Consists of (i) 18,294 shares of Casper common stock held by Mr. Monahan and (ii) 58,500 shares of Casper common stock subject to options held by Mr. Monahan that are exercisable within 60 days of December 2, 2021.
|
|
(6)
|
Consists of (i) 17,332 shares of Casper common stock held by Mr. Florence and (ii) the NEA 14 shares identified in footnote (1) above. Mr. Florence is a NEA 14 Director, and therefore may be deemed to have shared voting power with respect to these shares.
|
|
(7)
|
Consists of (i) 17,332 shares of Casper common stock held by Ms. Irvine and (ii) 37,500 shares of Casper common stock subject to options held by Ms. Irvine that are exercisable within 60 days of December 2, 2021. Does not include deferred stock units received in lieu of cash compensation for service as a director that will settle in full 90 days after Ms. Irvine ceases to serve on the Board of Directors.
|
|
(8)
|
Consists of (i) 17,332 shares of Casper common stock held by Ms. Katz and (ii) 41,250 shares of Casper common stock subject to options held by Ms. Katz that are exercisable within 60 days of December 2, 2021. Does not include deferred stock units received in lieu of cash compensation for service as a director that will settle in full 90 days after Ms. Irvine ceases to serve on the Board of Directors.
|
|
(9)
|
Consists of (i) 33,998 shares of Casper common stock held by Mr. Lazar, and (ii) 48,249 shares of Casper common stock subject to options held by Mr. Lazar that are exercisable within 60 days of December 2, 2021.
|
|
(10)
|
Consists of (i) 17,332 shares of Casper common stock held by Mr. Lerer, (ii) 159,892 shares of Casper common stock held by Lerer Hippeau Ventures CS, LLC, or Lerer CS, (iii) 929,439 shares of Casper common stock held by Lerer Ventures III, LP, or LV III, (iv) 73,403 shares of Casper common stock held by Lerer Ventures III-A, LLC, or LV III-A, (v) 56,773 shares of Casper common stock held by Lerer Ventures III-B, LP, or LV III-B and, together with LV III and LV III-A, the LV III entities, and (vi) 72,430 shares of Casper common stock held by Lerer Hippeau Ventures Select Fund, LP., or Lerer Select Fund, and together with Lerer CS and the LV III entities, the Lerer Hippeau entities. Lerer Hippeau Ventures CS Manager LLC is the manager of Lerer CS. Lerer Ventures III GP, LLC is the general partner of each of the LV III entities. Lerer Hippeau Ventures Select Fund GP, LLC is the general partner of Lerer Select Fund. Mr. Lerer is a managing partner of Lerer Hippeau, a manager of Lerer Hippeau Ventures CS Manager LLC, a manager of Lerer Ventures III GP, LLC, a managing member of Lerer Hippeau Ventures Select Fund GP, LLC and may be deemed to share voting and dispositive power over the shares held by the Lerer Hippeau entities. The address for these entities and individuals is c/o 100 Crosby Street, New York, New York 10012.
|
|
(11)
|
Consists of (i) 1,037,212 shares of Casper common stock held by Mr. Parikh, (ii) 225,000 shares of Casper common stock subject to options held by Mr. Parikh that are exercisable within 60 days of December 2, 2021, (iii) 300,000 shares of Casper common stock held by ABE Holdings, LLC and (iv) 270,000 shares of Casper common stock held by Miesau Trust, LLC. Mr. Parikh is the Investment Advisor of both ABE Trust, and Miesau Trust, which are the sole members of ABE Holdings, LLC and Miesau Trust, LLC, respectively. Mr. Parikh may be deemed to hold sole voting and dispositive power over the shares held by ABE Holdings, LLC and Miesau Trust, LLC.
|
|
(12)
|
Consists of (i) 17,332 shares of Casper common stock held by Mr. Reiss, (ii) 67,500 shares of Casper common stock subject to options held by Mr. Reiss that are exercisable within 60 days of December 2, 2021, and (iii) 90,537 shares of Casper common stock held of record by DTR LLC. Mr. Reiss indirectly controls DTR LLC and therefore may be deemed to hold voting and dispositive power with respect to these shares. Does not include deferred stock units received in lieu of cash compensation for service as a director that will settle in full 90 days after Mr. Reiss ceases to serve on the Board of Directors.
|
|
(13)
|
Consists of (i) 11,789,614 shares of Casper common stock held by all our current directors and executive officers as a group, and (ii) 1,351,832 shares of Casper common stock subject to options held by all our current directors and executive officers as a group that are exercisable within 60 days of December 2, 2021.
|
|
•
|
Casper’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed on February 26, 2021;
|
|
•
|
Casper’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, filed on November 15, 2021; Casper’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021, filed on August 16, 2021; Casper’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021, filed on May 13, 2021; and
|
|
•
|
Casper’s Current Reports on Form 8-K (including any amendment to such Current Reports), filed on November 15, 2021, October 22, 2021, June 11, 2021, February 24, 2021, February 12, 2021 and January 15, 2021.
|
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Term
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Section Reference
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Advisor
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3.2(b)
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Agreement
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Preamble
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Agreement Date
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Preamble
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Alternative Acquisition Agreement
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5.3(a)
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Alternative Debt Financing
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6.5(d)
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Applicable Termination
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8.3(b)(i)
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Bylaws
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3.3(a)
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Cash Basis
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2.8(d)
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Cashless Basis
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2.8(d)
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Capitalization Date
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3.5(a)
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Certificate of Merger
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| |
2.2
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Certificates
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| |
2.10(c)
|
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Charter
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| |
2.5(a)
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Chosen Courts
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| |
9.10(a)
|
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Closing
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| |
2.3
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Closing Date
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| |
2.3
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Company
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Preamble
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Company Board Recommendation
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| |
3.2(b)
|
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Company Board Recommendation Change
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| |
5.3(c)(i)
|
|
Company Breach Notice Period
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| |
8.1(e)
|
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Company Disclosure Letter
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| |
Article III
|
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Company In License
|
| |
3.13(e)
|
|
Company IP Contract
|
| |
5.2(n)
|
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Company IP License
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| |
3.13(f)
|
|
Company Material Real Property Lease
|
| |
3.11
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|
Term
|
| |
Section Reference
|
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Company Out Licenses
|
| |
3.13(f)
|
|
Company Real Property Lease
|
| |
3.11
|
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Company Related Parties
|
| |
8.3(f)(i)
|
|
Company Relationship Contract
|
| |
5.2(n)
|
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Company SEC Reports
|
| |
3.7
|
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Company Subsidiary Documents
|
| |
3.4
|
|
Company Termination Fee
|
| |
8.3(b)(i)
|
|
Covered Persons
|
| |
6.10(a)
|
|
COVID-19
|
| |
1.1(v)(vi)
|
|
COVID-19 Measures
|
| |
1.1(v)(xi)
|
|
Credit Agreement Terminations
|
| |
6.19
|
|
Debt Commitment Letter
|
| |
4.11(b)
|
|
Debt Financing
|
| |
4.11(b)
|
|
DGCL
|
| |
Recitals
|
|
Dissenting Company Shares
|
| |
2.7(c)(i)
|
|
DTC
|
| |
2.10(d)
|
|
DTC Payment
|
| |
2.10(d)
|
|
Early ESPP Exercise Date
|
| |
2.9
|
|
Effect
|
| |
1.1(u)
|
|
Effective Time
|
| |
2.2
|
|
Electronic Delivery
|
| |
9.13
|
|
Enforceability Limitations
|
| |
3.2(d)
|
|
Equity Commitment Letter
|
| |
4.11(a)
|
|
Equity Financing
|
| |
4.11(a)
|
|
ESPP
|
| |
2.9
|
|
Event Notice Period
|
| |
5.3(d)(i)(1)
|
|
Exchange Fund
|
| |
2.10(b)
|
|
Excluded Benefits
|
| |
6.11(a)
|
|
Export Controls
|
| |
3.19(c)(i)
|
|
Financing
|
| |
4.11(b)
|
|
Financing Conditions
|
| |
4.11(c)
|
|
Financing Letters
|
| |
4.11(b)
|
|
Guarantor
|
| |
Recitals
|
|
Import Restrictions
|
| |
3.19(c)(i)
|
|
Interim Period
|
| |
5.1
|
|
Intervening Event
|
| |
5.3(d)(i)
|
|
Labor Agreement
|
| |
3.14(a)
|
|
Limited Guarantee
|
| |
Recitals
|
|
Material Contract
|
| |
3.14(a)
|
|
Maximum Premium
|
| |
6.10(c)
|
|
Merger
|
| |
Recitals
|
|
Merger Sub
|
| |
Preamble
|
|
Option Consideration
|
| |
2.8(a)
|
|
Other Required Company Filing
|
| |
6.3(b)
|
|
Other Required Parent Filing
|
| |
6.3(c)
|
|
Owned Company Shares
|
| |
2.7(a)(iii)
|
|
Parent
|
| |
Preamble
|
|
Parent Breach Notice Period
|
| |
8.1(g)
|
|
Parent Related Parties
|
| |
8.3(f)(i)
|
|
Parent Termination Fee
|
| |
8.3(c)
|
|
Term
|
| |
Section Reference
|
|
Party
|
| |
Preamble
|
|
Pay-Off Letters
|
| |
6.19
|
|
Payment Agent
|
| |
2.10(a)
|
|
Per Share Price
|
| |
2.7(a)(ii)
|
|
Permits
|
| |
3.20
|
|
Prohibited Financing Modifications
|
| |
6.5(b)
|
|
Proposal Notice Period
|
| |
5.3(d)(ii)(3)
|
|
Proxy Statement
|
| |
6.3(a)
|
|
PSU Consideration
|
| |
2.8(c)
|
|
Qualified Plan
|
| |
3.16(d)
|
|
Reimbursement Obligations
|
| |
6.6(a)
|
|
Required Amounts
|
| |
4.11(f)
|
|
Requisite Stockholder Approval
|
| |
3.2(c)
|
|
RSU Consideration
|
| |
2.8(b)
|
|
Surviving Corporation
|
| |
2.1
|
|
Takeover Statute
|
| |
3.26
|
|
Termination Date
|
| |
8.1(c)
|
|
Uncertificated Shares
|
| |
2.10(c)
|
|
Voting and Support Agreement
|
| |
Recitals
|
|
Warrant Notice
|
| |
2.8(d)
|
|
|
| |
MARLIN PARENT, INC.
|
||||||
|
|
| |
|
| |
|
| |
|
|
|
| |
By:
|
| |
/s/ Eric Sobotka
|
|||
|
|
| |
|
| |
Name:
|
| |
Eric Sobotka
|
|
|
| |
|
| |
Title:
|
| |
President
|
|
|
| |
MARLIN MERGER SUB, INC.
|
||||||
|
|
| |
|
| |
|
| |
|
|
|
| |
By:
|
| |
/s/ Eric Sobotka
|
|||
|
|
| |
|
| |
Name:
|
| |
Eric Sobotka
|
|
|
| |
|
| |
Title:
|
| |
President
|
|
|
| |
CASPER SLEEP INC.
|
||||||
|
|
| |
|
| |
|
| |
|
|
|
| |
By:
|
| |
/s/ Philip Krim
|
|||
|
|
| |
|
| |
Name:
|
| |
Philip Krim
|
|
|
| |
|
| |
Title:
|
| |
CEO
|
|
(i)
|
reviewed a draft dated November 14, 2021 of the Merger Agreement;
|
|
(ii)
|
reviewed certain publicly available financial and other information about the Company;
|
|
(iii)
|
reviewed certain information furnished to us and approved for our use by the Company’s management, including financial forecasts, estimates and analyses, relating to the business, operations and prospects of the Company;
|
|
(iv)
|
held discussions with members of senior management of the Company concerning the matters described in clauses (ii) and (iii) above;
|
|
(v)
|
reviewed the share trading price history and valuation multiples for the Common Stock and compared them with those of certain publicly traded companies that we deemed relevant;
|
|
(vi)
|
reviewed and compared the proposed financial terms of the Merger with the financial terms of certain other transactions that we deemed relevant; and
|
|
(vii)
|
conducted such other financial studies, analyses and investigations as we deemed appropriate.
|
|
|
| |
CASPER SLEEP INC.
|
|||
|
|
| |
|
| ||
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
Philip Krim
|
|
|
| |
Title:
|
| |
Chief Executive Officer
|
|
|
| |
New Enterprise Associates 14, L.P.
|
|||
|
|
| |
|
| ||
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
New Enterprise Associates, Inc., 1954 Greenspring Drive, Suite 600, Timonium, Maryland 21903
|
|||
|
|
| |
Email:
|
| |
|
|
|
| |
NEA Ventures 2014, L.P.
|
|||
|
|
| |
|
| ||
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
New Enterprise Associates, Inc., 1954 Greenspring Drive, Suite 600, Timonium, Maryland 21903
|
|||
|
|
| |
Email:
|
| |
|
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
Philip Krim
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
Three World Trade Center, 175 Greenwich Street, 40th Floor, New York, NY 10007
|
|||
|
|
| |
Email:
|
| |
|
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
Neil Parikh
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
Three World Trade Center, 175 Greenwich Street, 40th Floor, New York, NY 10007
|
|||
|
|
| |
Email:
|
| |
|
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
Benjamin Lerer
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
Three World Trade Center, 175 Greenwich Street, 40th Floor, New York, NY 10007
|
|||
|
|
| |
Email:
|
| |
|
|
|
| |
By:
|
| |
|
|
|
| |
Name:
|
| |
Emilie Arel
|
|
|
| |
Title:
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Address:
|
| |
|
|
|
| |
Three World Trade Center, 175 Greenwich Street, 40th Floor, New York, NY 10007
|
|||
|
|
| |
Email:
|
| |
|
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