Item 1.01 Entry into a Material Definitive Agreement
Overview
On March 1, 2020, WillScot Corporation, a Delaware corporation (the "Company"),
Mobile Mini, Inc., a Delaware corporation ("Mobile Mini"), and Picasso Merger
Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company
("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which, subject to the satisfaction or waiver of certain
customary closing conditions, Merger Sub will be merged with and into Mobile
Mini, with Mobile Mini surviving as a wholly-owned subsidiary of the Company
(the "Merger"). The Merger Agreement is further described below.
In connection with the Merger Agreement, on March 1, 2020, the Company entered
into a commitment letter (the "Commitment Letter") pursuant to which certain
financial institutions have committed to provide a senior secured asset based
revolving credit facility (the "New ABL Facility") in an aggregate principal
amount of $2.4 billion to finance the Merger. The proceeds of the New ABL
Facility will be available to (x) refinance the existing ABL credit agreements
of the Company and Mobile Mini and to redeem the existing senior notes of Mobile
Mini, and (y) pay the fees, costs and expenses incurred in connection with the
Merger and the related transactions, subject to customary conditions.
Concurrently with the execution and delivery of the Merger Agreement, Mobile
Mini entered into a voting agreement (the "Voting Agreement") with TDR Capital
LLP ("TDR Capital"), TDR Capital II Holdings L.P. ("TDR Holdings"), and Sapphire
Holding S.à r.l. ("Sapphire Holdings"), an affiliate of the investment funds
managed by TDR Capital (together with TDR Capital and TDR Holdings, the "TDR
Parties"). The Voting Agreement requires (i) Sapphire Holdings to vote all of
its shares of the Company's Class A common stock, par value $0.0001 per share
(the "Class A Common Stock"), and the Company's Class B common stock, par value
$0.0001 per share (the "Class B Common Stock"), (A) in favor of the Company
Proposals (as defined below), (B) against any competing transaction and, in the
event of any adverse recommendation by the Board of Directors of the Company to
its stockholders involving or related to a "Parent Intervening Event" (as
defined in the Merger Agreement), in the same proportion as the votes cast by
the other Company stockholders, and (C) against any corporate action which would
prevent or materially delay the transactions contemplated by the Merger
Agreement or otherwise result in a material breach of any of the Company's or
Sapphire Holdings's obligations under the Merger Agreement and Voting Agreement,
as applicable, (ii) Sapphire Holdings to not transfer its shares of its Class A
Common Stock or Class B Common Stock or WSHC Stock (as defined below) without
the prior written consent of Mobile Mini, with certain limited exceptions, and
(iii) each of the TDR Parties to not solicit an alternative acquisition proposal
or participate in discussions or negotiations regarding an alternative
acquisition proposal, except as authorized by the Board of Directors of the
Company in certain circumstances.The Voting Agreement further provides that, on
the closing date of the Merger, each of the TDR Parties will enter into a
shareholders agreement, by and among the Company and the TDR Parties,
substantially in the form attached to the Merger Agreement (the "Shareholders
Agreement"). The Shareholders Agreement will provide for: (i) the TDR Parties'
right to require the Company to nominate, and use its best efforts to have
elected to the Board by the Company's stockholders, (a) two directors to the
Company's board of directors (the "Board") for so long as the TDR Parties
beneficially own at least 15% of the Company Common Stock (as defined below) and
(b) one director to the Company's Board for so long as the TDR Parties
beneficially own at least 5%, but less than 15% of the Company Common Stock,
(ii) standstill obligations of the TDR Parties for so long as the TDR Parties
beneficially own at least 5% of the Company Common Stock, (iii) transfer
restrictions on the TDR Parties, including a lock-up period of six months after
the closing of the Merger and restrictions on the volume of shares of Company
Common Stock that may be transferred after the six month lock-up period expires,
and (iv) certain confidentiality obligations of the TDR Parties.
The Voting Agreement will terminate upon the earliest of the effective time of
the Merger (the "Effective Time") and termination of the Merger Agreement in
accordance with its terms. In addition, Sapphire Holdings may terminate the
Voting Agreement following an adverse recommendation of the Company's Board of
Directors involving or relating to a "Parent Superior Proposal" (as defined in
the Merger Agreement), any change to the merger consideration that is adverse to
Sapphire Holdings or any other amendment to the Merger Agreement that is adverse
to Sapphire Holdings in any material respect.
The Merger Agreement and the Voting Agreement further provide that Sapphire
Holdings will exchange all of its shares of common stock, par value $0.0001 per
share ("WSHC Stock"), of William Scotsman Holdings Corp., a direct subsidiary of
the Company ("Holdings"), immediately prior to the Effective Time, for shares of
Class A Common Stock, at an exchange ratio of 1.3261 times (the "Share
Exchange"), without any subsequent adjustment, and, at the Effective Time, all
issued and outstanding shares of Class B Common Stock (which are held by
Sapphire Holdings), will be cancelled (the "Class B Cancellation") and each of
the existing shareholders agreement of Holdings and the exchange agreement of
Holdings will automatically terminate and be of no further force and effect. At
the Effective Time, and as a result of the Class B Cancellation and the adoption
by the Company of an amended and restated certificate of incorporation as set
forth in the Merger Agreement, the Company will have a single series of common
stock, par value $0.0001 per share, outstanding (the "Company Common Stock").
Merger Agreement
Merger Structure
At the Effective Time, each share of Mobile Mini common stock, par value $0.01
per share ("Mobile Mini Common Stock"), issued and outstanding immediately prior
to the Effective Time (other than treasury shares held by Mobile Mini or its
subsidiaries), will be converted into the right to receive 2.4050 shares of the
Company's Class A Common Stock (the "Merger Consideration"). Immediately
thereafter, as contemplated by the Merger Agreement and the amended and restated
Company certificate of incorporation to be filed at the Effective Time, all
outstanding shares of Class A Common Stock will be converted into shares of
Company Common Stock.
Treatment of Equity Awards
At the Effective Time, each outstanding and unexercised option to purchase
shares of Mobile Mini Common Stock will be assumed by the Company and become an
option to purchase shares of Company Common Stock, on the same terms and
conditions as applied to each such option immediately prior to the Effective
Time, except that (A) the number of shares of Company Common Stock subject to
such option will equal the product of (i) the number of shares of Mobile Mini
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
Employment Agreements
Employment Agreement with Bradley Soultz
On March 1, 2020, in connection with the execution of the Merger Agreement, the
Company entered into an employment agreement with Bradley Soultz, the CEO of the
Company (the "Soultz Agreement"), which becomes effective upon, and subject to
the occurrence of, the Effective Time, and provides that Mr. Soultz will
continue to serve as the CEO of the Company for 24 months following the
Effective Time, with no renewal provisions.
The Soultz Agreement provides for an annual base salary of $850,000 and that Mr.
Soultz will be eligible for an annual target bonus of $1,062,500, or 125% of his
base salary, and annual equity awards with a target grant date value of
$2,600,000, 40% in the form of time-based restricted stock units ("RSUs")
vesting ratably over four years and 60% in the form of performance-based
restricted stock units ("PSUs") vesting over three years. In connection with the
Merger, Mr. Soultz will be eligible to receive a retention award with a target
grant date value of $1,250,000, 40% in the form of time-based RSUs vesting
ratably over four years and 60% in the form of PSUs vesting over three years.
The Soultz Agreement also includes non-compete and employment non-solicitation
provisions for 12 months post-termination of employment.
The Soultz Agreement provides that in the event of a termination of employment
without Cause (as defined in the Soultz Agreement) or due to the delivery of a
notice of non-renewal of the term by the Company or a resignation for Good
Reason (as defined in the Soultz Agreement), in addition to Accrued Benefits (as
defined in the Soultz Agreement), Mr. Soultz will be entitled to receive (i) a
cash severance payment of his continued base salary for 12 months, (ii) a pro
rata portion of the annual bonus he would have received based on actual
performance, (iii) his full target annual bonus for the year of termination,
(iv) continued vesting of any annual equity awards for 12 months and full
vesting of the retention award and any annual equity awards granted within 24
months following the Merger (based on actual performance, as applicable), (v)
payments equal to the cost of continuing coverage under the Company's health
insurance plan for twelve months, and (vi) up to $25,000 in outplacement
services. Mr. Soultz will be entitled to the same benefits in the event of a
termination of employment without Cause or a resignation for Good Reason during
the 30-month period following the Merger or the 12-month period after any
subsequent Change in Control (as defined in the Soultz Agreement), except that
he will receive (i) a cash severance payment equal to 1.5x the sum of his base
salary at the rate in effect at the time of termination and his target bonus for
the year of termination, (ii) the cost of continuing coverage under the
Company's health insurance plan for 18 months, and (iii) any outstanding equity
awards will immediately vest in full upon such termination.
The foregoing description of the Soultz Agreement is qualified in its entirety
by reference to the full text of the Soultz Agreement, which is filed as Exhibit
10.1 and is incorporated herein by reference.
Employment Agreement with Kelly Williams
On March 1, 2020, in connection with the execution of the Merger Agreement, the
Company entered into an employment agreement with Kelly Williams, the President
and CEO of Mobile Mini (the "Williams Agreement"), which becomes effective upon,
and subject to the occurrence of, the Effective Time, and provides that Mr.
Williams will serve as the President and COO of the Company for an initial term
of 24 months from the Effective Time, subject to automatic renewal for
successive one-year terms, unless Mr. Williams or the Company gives 90-days
prior written notice of an intention not to renew the initial term or the
renewal term, as applicable.
The Williams Agreement provides for an annual base salary of $700,000 and that
Mr. Williams will be eligible for an annual target bonus of $700,000, or 100% of
his base salary, and annual equity awards with a target grant value of 250% of
his base salary, 40% in the form of time-based RSUs vesting ratably over four
years and 60% in the form of PSUs vesting over three years. In connection with
the Merger, Mr. Williams will receive a retention award with a grant date value
of $3,000,000 in the form of time-based RSUs vesting ratably over four years.
The Williams Agreement also includes non-compete and employment non-solicitation
provisions for 24 months post-termination of employment.
The Williams Agreement provides that in the event of a termination of employment
without Cause (as defined in the Williams Agreement) or due to the delivery of a
notice of non-renewal of the term by the Company or a resignation for Good
Reason (as defined in the Williams Agreement), in addition to Accrued
Compensation (as defined in the Williams Agreement), Mr. Williams will be
entitled to receive (i) two times the sum of his base salary at the highest rate
in effect at any time within the 90-day period prior to and ending on the date
the notice of termination is given (or the date of the Change of Control (as
defined in the Williams Agreement) if such termination is within the year
following a Change of Control) plus the Payment Amount (defined in the Williams
Agreement as 100% of his base salary in effect during the year in which
termination occurs), (ii) certain health insurance amounts for a period of 12
months (or 24 months if such termination occurs within the year following the
Merger or a Change of Control), and (iii) full vesting of any equity-based
awards, subject to performance targets and goals, as applicable (and, in the
event the retention award was either not granted or the target amount of which
was reduced, the cash value of the retention award that would have been made had
it been granted in full, less the value of any portion of the retention award to
the extent granted). The Williams Agreement provides that in the event of a
Change in Control any outstanding equity awards will immediately vest in full
with any performance targets and goals deemed satisfied at target level of
performance.
The foregoing description of the Williams Agreement is qualified in its entirety
by reference to the full text of the Williams Agreement, which is filed as
Exhibit 10.2 and is incorporated herein by reference.
Employment Agreement with Timothy Boswell
On March 1, 2020, in connection with the execution of the Merger Agreement, the
Company entered into an employment agreement with Timothy Boswell, the CFO of
the Company (the "Boswell Agreement"), effective as of March 1, 2020 (except as
otherwise indicated therein with respect to certain compensation related to the
Merger), which provides that Mr. Boswell will continue to serve as the CFO of
the Company for an initial term of 36 months following the later of March 1,
2020 or the Effective Time, which automatically renews for successive one-year
periods, unless Mr. Boswell or the Company gives 120-days prior written notice
. . .
Item 5.08 Shareholder Director Nominations.
As a result of the Company's entry into the Merger Agreement and to facilitate
the timely completion of the Merger, the Board has established May 11, 2020 as
the date of the Company's 2020 annual meeting of stockholders (the "2020 Annual
Meeting"). The Board has set the close of business on March 16, 2020, as the
record date for determining stockholders who are eligible to receive notice of
and vote at the 2020 Annual Meeting. The Company will publish additional details
regarding the exact time, location and matters to be voted on at the 2020 Annual
Meeting in the Company's proxy statement for the 2020 Annual Meeting. Because
the date of the 2020 Annual Meeting represents a change of more than 30 days
from the anniversary date of the Company's 2019 annual meeting of stockholders
(the "2019 Annual Meeting"), the deadlines for stockholders to submit proposals
and nominations of directors as set forth in the Company's definitive proxy
statement for the 2019 Annual Meeting are no longer effective.
Under the Company's bylaws (the "Bylaws"), in order for stockholder proposals
and director nominations to be presented at the 2020 Annual Meeting (other than
by means of inclusion of proxy access nominations and stockholder proposal in
the proxy materials under Rule 14a-8 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are each described below), written notice
must be received by the Company not later than the close of business on March
15, 2020. Such notice must comply with the procedural and content requirements
of the Bylaws.
Under the Bylaws, in order for proxy access nominations to be included in the
Company's proxy materials and presented at the 2020 Annual Meeting, written
notice must be received by the Company not later than the close of business on
March 15, 2020. Such notice must comply with the procedural and content
requirements of the Bylaws.
Stockholder proposals intended for inclusion in the Company's definitive proxy
statement for the 2020 Annual Meeting pursuant to Rule 14a-8 under the Exchange
Act must be received by the Company not later than the close of business on
March 15, 2020 (which the Company believes is a reasonable time before it begins
to print and send its proxy materials).
As contemplated by the Merger Agreement, separate from and subsequent to the
2020 Annual Meeting, the Company will convene a special stockholders meeting for
the purpose of obtaining the necessary stockholder approval of the Company
Proposals.
Cautionary Statement
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 that are subject to risks and
uncertainties and are made pursuant to the safe harbor provisions of 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. The words "estimates," "expects," "anticipates,"
"believes," "forecasts," "projects," "plans," "intends," "may," "will,"
"should," "could," "shall," "continue," "outlook" and variations of these words
and similar expressions (or the negative thereof) identify forward-looking
statements, which are generally not historical in nature. Certain of these
forward-looking statements relate to the proposed business combination (the
"Proposed Transaction") involving the Company and Mobile Mini, including:
expected scale; operating efficiency; stockholder, employee and customer
benefits; key assumptions; timing of closing; the amount and timing of revenue
and expense synergies; future financial benefits and operating results; and
integration spend, which reflects management's beliefs, expectations and
objectives as of the date hereof. Achievement of the expressed beliefs,
expectations and objectives is subject to risks and uncertainties that could
cause actual results to differ materially from those beliefs, expectations or
objectives. These forward-looking statements are only estimates, assumptions and
projections, and involve known and unknown risks and uncertainties, many of
which are beyond the control of the Company and Mobile Mini.
Important Proposed Transaction-related factors that may cause such differences
include, but are not limited to: the risk that expected revenue, expense and
other synergies from the Proposed Transaction may not be fully realized or may
take longer to realize than expected; the parties are unable to successfully
implement their integration strategies; the inherent uncertainty associated with
financial or other projections; failure of the parties to satisfy the closing
conditions in the merger agreement in a timely manner or at all, including
stockholder and regulatory approvals; the occurrence of any event, change or
other circumstances that could give rise to the termination of the merger
agreement; the possibility that the Proposed Transaction may be more expensive
to complete than anticipated, including as a result of unexpected factors or
events; and disruptions to the parties' businesses and financial condition as a
result of the announcement and pendency of the Proposed Transaction. Other
important factors include: the parties' ability to manage growth and execute
their business plan; their estimates of the size of the markets for their
products; the rate and degree of market acceptance of their products; the
success of other competing modular space and portable storage solutions that
exist or may become available; rising costs adversely affecting their
profitability (including cost increases resulting from tariffs); general
economic and market conditions impacting demand for their products and services;
the value of the Company's shares to be issued in the Proposed Transaction; the
parties' capital structure, levels of indebtedness and availability of credit;
expected financing transactions undertaken in connection with the Proposed
Transaction; third party contracts containing consent and/or other provisions
that may be triggered by the Proposed Transaction; the ability to retain and
hire key personnel and uncertainties arising from leadership changes; the
response of business partners as a result of the announcement and pendency of
the Proposed Transaction; the diversion of management attention from business
operations to the Proposed Transaction; the ability to implement and maintain an
effective system of internal controls; potential litigation and regulatory
matters involving the combined company; implementation of tax reform; the
intended qualification of the Proposed Transaction as a tax-free reorganization;
the changes in political conditions in the U.S. and other countries in which the
parties operate, including U.S. trade policies or the U.K.'s withdrawal from the
European Union; and such other risks and uncertainties described in the periodic
reports the Company and Mobile Mini file with the SEC from time to time
including the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, which was filed with the SEC on March 2, 2020 and Mobile
Mini's Annual Report on Form 10-K for the fiscal year ended December 31, 2019,
which was filed with the SEC on February 3, 2020, both of which are available
through the SEC's EDGAR system at www.sec.gov.
Investors are cautioned not to place undue reliance on these forward-looking
statements as the information in this report speaks only as of the date of this
report or such earlier date as specified herein. The Company and Mobile Mini
disclaim any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law. Investors should not assume that any lack of update to a
previously issued "forward-looking statement" constitutes a reaffirmation of
that statement. All subsequent written and oral forward-looking statements
attributable to the Company, Mobile Mini or any person acting on behalf of
either party are expressly qualified in their entirety by the cautionary
statements referenced above.
Important Information About the Proposed Transaction
Additional Information
In connection with the Proposed Transaction, the Company will file a
registration statement on Form S-4, which will include a document that serves as
a prospectus of the Company and a joint proxy statement of the Company and
Mobile Mini (the "joint proxy statement/prospectus"), and each party will file
other documents regarding the Proposed Transaction with the SEC. No offering of
securities shall be made, except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY, IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING
ANY DECISION REGARDING THE PROPOSED TRANSACTION. A definitive joint proxy
statement/prospectus will be sent to the Company's stockholders and Mobile
Mini's stockholders. Investors and security holders will be able to obtain these
documents (if and when available) free of charge from the SEC's website at
www.sec.gov. The documents filed by the Company with the SEC may also be
obtained free of charge from the Company by requesting them by mail at WillScot
Corporation, 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231. The
documents filed by Mobile Mini may also be obtained free of charge from Mobile
Mini by requesting them by mail at Mobile Mini, Inc. 4646 E. Van Buren Street,
Suite 400, Phoenix, Arizona 85008.
Participants in the Solicitation
The Company, Mobile Mini, their respective directors and executive officers and
other members of management and employees and certain of their respective
significant stockholders may be deemed to be participants in the solicitation of
proxies in respect of the Proposed Transaction. Information about the Company's
directors and executive officers is available in the Company's proxy statement,
dated April 30, 2019 for the 2019 Annual Meeting, the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, which was filed with the
SEC on March 2, 2020, and the Company's Current Reports on Form 8-K filed with
the SEC on May 17, 2019 and June 19, 2019. Information about Mobile Mini's
directors and executive officers is available in Mobile Mini's proxy statement,
dated March 12, 2019 for its 2019 Annual Meeting of Stockholders and Mobile
Mini's Annual Report on Form 10-K for the fiscal year ended December 31, 2019,
which was filed with the SEC on February 3, 2020. Information regarding the
persons who may, under the rules of the SEC, be deemed participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holding or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with the SEC
regarding the Proposed Transaction when they become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes available
before making any voting or investment decisions. You may obtain free copies of
these documents from the SEC, the Company or Mobile Mini as indicated above.
No Offer or Solicitation
This report shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Exhibit Description
2.1* Agreement and Plan of Merger, dated as of March 1, 2020, by and
among WillScot Corporation, Picasso Merger Sub, Inc. and Mobile
Mini, Inc.
10.1 Employment Agreement, dated as of March 1, 2020, by and between
WillScot Corporation and Bradley Soultz
10.2 Employment Agreement, dated as of March 1, 2020, by and between
WillScot Corporation and Kelly Williams
10.3 Employment Agreement, dated as of March 1, 2020, by and between
WillScot Corporation and Timothy Boswell
10.4 Employment Agreement, dated as of March 1, 2020, by and between
WillScot Corporation and Christopher Miner
10.5 Employment Agreement, dated as of March 1, 2020, by and between
WillScot Corporation and Hezron Lopez
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The
Company hereby undertakes to furnish copies of any of the omitted schedules upon
request by the Securities and Exchange Commission.
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WILLSCOT MOBILE MINI HOLDINGS CORP. 
