Item 1.01.
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Entry into a Material Definitive Agreement.
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Merger Agreement
On June 17, 2021 (the “Signing Date”), CAI International, Inc., a Delaware corporation (the “Company”), entered into an
Agreement and Plan of Merger (the “Merger Agreement”) with Mitsubishi HC Capital Inc., a Japanese corporation (“Parent” or “MHC”), and Cattleya Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), relating
to the proposed acquisition of the Company by Parent.
The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will be merged
with and into the Company (the “Merger”) with the Company continuing as the surviving corporation in the Merger, and, at the effective time of the Merger (the “Effective Time”):
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each share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), that is issued and outstanding immediately prior to the Effective
Time (other than Excluded Shares (as defined in the Merger Agreement)) will cease to be outstanding and will be converted into the right to receive $56.00, in cash, without interest, subject to deductions of any applicable withholding taxes
(the “Common Merger Consideration”);
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each share of the Company’s 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.0001 per share (the “Series A
Preferred Stock”), that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (i) the liquidation preference of $25.00 per
share, plus (ii) the aggregate amount of all accrued and unpaid dividends on such Series A Preferred Stock as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes; and
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each share of the Company’s 8.50% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.0001 per share (the “Series B
Preferred Stock”) that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares, will be converted into the right to receive an amount equal to the sum of: (i) the liquidation preference of $25.00 per
share, plus (ii) the aggregate amount of all accrued and unpaid dividends on such Series B Preferred Stock as of the Effective Time, in cash, without interest, subject to deductions of any applicable withholding taxes.
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In addition, as a result of the Merger:
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each stock option that was granted pursuant to the Company’s equity incentive plans (the “Equity Incentive Plans”) that remains outstanding immediately prior
to the Effective Time (each, an “Option”) that has a per share exercise price that is less than $56.00, will be cancelled at the Effective Time in exchange for an amount in cash, without interest, equal to the product of (x) the aggregate
number of shares of common stock subject to such Option multiplied by (y) the excess of the Common Merger Consideration over the applicable per share exercise price of the Option, subject to any applicable withholding taxes;
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each restricted stock unit that was granted pursuant to the Equity Incentive Plans and remains outstanding immediately prior to the Effective Time (each, an
“RSU”) and each RSU that was granted pursuant to an Equity Incentive Plan, that is subject to vesting in part based on the achievement of corporate performance goals that have not been satisfied as of immediately prior to the Effective Time
and that remains outstanding immediately prior to the Effective Time (each, a “PRSU”), will be cancelled and automatically converted at the Effective Time into the right to receive $56.00, in cash, without interest, for each share of common
stock subject to the RSU or PRSU, subject to any applicable withholding taxes; and
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each share of common stock that was issued under the Equity Incentive Plans that remains outstanding and unvested immediately prior to the Effective Time
(each, an “RSA”) will become fully vested and free of any applicable forfeiture restrictions, effective as of immediately prior to the Effective Time and each such share of common stock will cease to be outstanding and will be converted
into the right to receive $56.00, in cash, without interest, subject to deductions of any applicable withholding taxes.
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The Board of Directors of the Company (the “Board”) unanimously approved, and declared, the Merger Agreement and the
transactions contemplated thereby, including the Merger, to be advisable, fair to and in the best interests of the Company and its stockholders on the terms and conditions set forth in the Merger Agreement. Stockholders of the Company will be asked
to vote on the approval of the Merger Agreement at a special meeting of the stockholders of the Company that will be held on a date to be announced in the future (the “Special Meeting”).
In addition, in connection with the Merger and in accordance with the Board’s authority under the Equity Incentive Plans, the
Board has taken such actions as are necessary to cause (i) the performance conditions of each PRSU to be deemed satisfied at 100% of the relevant target level of achievement (notwithstanding any contrary provision in any agreement or document
governing or evidencing the relevant PRSU) and (ii) each Option, PRSU, RSU and RSA to become fully vested and free of any applicable forfeiture restrictions, in each of clauses (i) and (ii), effective as of immediately prior to the Effective Time,
including certain Options, RSUs, PRSUs and RSAs held by the members of the Board and the Company’s named executive officers, who collectively comprise all of the Company’s executive officers.
The closing of the Merger is subject to, among other conditions, (i) the adoption of the Merger Agreement by the affirmative
vote of a majority of the shares present in person (including by means of remote communication) or represented by proxy and entitled to vote on such proposal at the Special Meeting as of the record date for the Special Meeting (the “Company
Stockholder Approval”), (ii) the completion of the migration of the jurisdiction of certain subsidiaries of the Company from Bermuda and Barbados to limited liability companies under Delaware law, including the obtainment of certain contractual
consents in connection therewith (the “Migration”), and (iii) receipt of key contractual consents in connection with the Merger. Consummation of the Merger is not subject to a financing condition.
In addition to the foregoing conditions, consummation of the Merger is also subject to various customary conditions, including,
but not limited to, the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, making such other filings with any other governmental entities that may be required under applicable
regulatory laws of certain other countries and the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, and compliance with the covenants and agreements contained in the
Merger Agreement as of the closing of the Merger.
The Company is subject to customary restrictions on its ability to solicit, initiate or knowingly take any action to facilitate
or encourage Alternative Proposals (as defined in the Merger Agreement) from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding Alternative Proposals, with
customary exceptions regarding the Board’s fiduciary duties under applicable law, including unsolicited Alternative Proposals (as defined in the Merger Agreement). The Board has agreed to recommend that the Company’s stockholders vote to adopt the
Merger Agreement and the transactions contemplated thereby, including the merger, subject to certain customary exceptions regarding the Board’s fiduciary duties under applicable law.
The Merger Agreement contains certain termination rights, including the right of the Company to terminate the Merger Agreement
to accept a Superior Proposal (as defined in the Merger Agreement), and provides that, upon termination of the Merger Agreement upon specified conditions, the Company will be required to pay Parent a termination fee of $35.0 million (the
“Termination Fee”) or Parent may be required to pay the Company a termination fee of $35.0 million (the “Parent Termination Fee”). Upon any termination of the Merger Agreement in circumstances where the Termination Fee or the Parent Termination Fee
is payable, the paying party will, in addition to payment of the Termination Fee or the Parent Termination Fee, as applicable, reimburse the receiving party for 100% of its out-of-pocket fees, costs, obligations owed to third parties and expenses
(including reasonable fees and expenses of its counsel) actually incurred by it in connection with the consideration, negotiation or implementation of the Merger Agreement or the transactions contemplated thereby and other actions contemplated
thereby in an amount not to exceed $5.0 million.
In addition, subject to certain exceptions and limitations set forth in the Merger Agreement, either party may terminate the
Merger Agreement if the Merger is not consummated by February 28, 2022 (the “End Date”). Subject to certain conditions and limitations set forth in the Merger Agreement, the Merger Agreement also provides for the payment by the Company to Parent of
the Termination Fee if, following the termination of the Merger Agreement by the Parent or Company under specified circumstances, the Company consummates a transaction with respect to any Alternative Proposal within 12 months after such
termination, or signs a definitive agreement with respect to any Alternative Proposal within 12 months after such termination and such transaction is subsequently consummated.
The Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others,
covenants (1) to conduct its business in the ordinary course during the period between the Signing Date and the Effective Time, (2) not to engage in certain types of transactions during this period unless agreed to in writing by Parent, (3) to
convene and hold the Special Meeting for the purpose of obtaining the Company Stockholder Approval, (4) subject to certain conditions, not to withdraw, amend, modify or materially qualify in a manner adverse to Parent, the recommendation of the
Board that the Company’s stockholders approve the adoption of the Merger Agreement, (5) to use reasonable best efforts to defend through litigation on the merits any claim asserted in any court with respect to the transactions contemplated with
respect to any required antitrust approval for the Merger, (6) to cooperate with Parent in connection with the financing for the Merger and (7) to complete the Migration.
The foregoing summary of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated by reference herein.
The Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide
any other factual information about the Company. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of
the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger
Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of
representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.