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TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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WillScot Corporation | ||||
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
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901 S. Bond Street, Suite 600
Baltimore, Maryland 21231
Phone (410) 931-6000
www.willscot.com
April 30, 20182019
Dear Fellow Stockholders:
You are cordially invited to attend the 20182019 annual meeting of stockholders of WillScot Corporation at our executive office at 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231, on June 19, 2018,18, 2019, at 9 a.m. local time.Eastern Daylight Time.
The matters expected to be acted upon, as well as instructions on how to vote your shares, are described in detail in the accompanying notice of annual meeting and proxy statement.
Only stockholders of record at the close of business on April 23, 201822, 2019 are entitled to notice of and to vote at the annual meeting.
Your vote is important. If you hold your shares through a brokerage firm or bank, your brokerage firm or bank cannot vote your shares on the election of directors without specific instructions from you on how to vote. In order for your vote to be counted, please ensure to submit your vote to your brokerage firm or bank.
We appreciate the confidence you have placed in us through your investment in our company.
Sincerely,
Gerard E. Holthaus
Chairman of the Board
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Notice of Annual Meeting of Stockholders
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Date | | Time | | Place | | |||||||
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June | 9 a.m. Eastern Daylight Time | Our principal executive office: 901 S. Bond Street, Suite 600 Baltimore, Maryland 21231 | ||||||||||
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Items of Business and Voting Recommendations:
Proposal | | Board Voting Recommendation | ||
Proposal 1 | Elect as directors the two nominees listed in this proxy statement | FOR | ||
Proposal 2 | Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, | FOR | ||
Transact any other business that may properly come before the meeting |
Postponements and Adjournments: | Any action on the items of business described above may be considered at the meeting, at the time and on the date specified above, or at any time and date to which the meeting may be properly postponed or adjourned. | |
Record Date: | You are entitled to vote if you were a WillScot stockholder as of the close of business on April | |
Meeting Admission: | Please follow the instructions set forth in the section of the proxy statement titled "Information about the Annual Meeting and Voting." | |
Voting: | Your vote is very important. Whether or not you plan to attend the meeting, we hope you will vote as soon as possible. You can vote in person at the annual meeting or by proxy. Registered holders may vote their shares by mail, while beneficial owners may vote by following the instructions provided by your broker, bank or other agent. See the "Information about the Annual Meeting and Voting" section for instructions on how to vote your shares. |
By Order of the Board of Directors
Bradley L. Bacon
Vice President, General Counsel and Corporate Secretary
April 30, 20182019
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders on June 19, 2018:18, 2019: this notice of annual meeting and proxy statement and our annual report to stockholders for the fiscal year ended December 31, 20172018 are available on our website athttps://investors.willscot.com.
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WILLSCOT CORPORATION
Proxy Statement
For the Annual Meeting of Stockholders
To Be Held on June 19, 201818, 2019
We are sending you these proxy materials in connection with WillScot's solicitation of proxies, on behalf of its Board of Directors, for the 20182019 annual meeting of stockholders. Distribution of these materials is scheduled to begin on May 9, 2018.10, 2019.
PROPOSAL 1 – ELECTION OF DIRECTORS | 3 | |||
PROPOSAL 2 – RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||||
EXECUTIVE COMPENSATION | ||||
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | ||||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | ||||
MATTERS RAISED AT THE ANNUAL MEETING NOT INCLUDED IN THIS STATEMENT | ||||
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2019 ANNUAL MEETING | ||||
SECTION 16(A) BENEFICAL OWNERSHIP REPORTING COMPLIANCE | ||||
ACCESS TO FORM 10-K | ||||
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
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Explanatory Note
WillScot Corporation is a holding company. We have no direct operations and our principal asset is our equity interest in WilliamWilliams Scotsman Holdings Corp. ("WS Holdings"), which owns the Williams Scotsman family ofan industry-leading specialty rental companies.services business. We have a majority interest in, and control the management of, WS Holdings.
We are an "emerging growth company" under applicable federal securities laws, and therefore are permitted to take advantage of certain reduced public company reporting requirements. As an emerging growth company, we provide in this proxy statement the scaled disclosure permitted under the Jumpstart Our Business Startups Act of 2012, including the compensation disclosures required of a "small reporting company," as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers ("NEOs"), or the frequency with which such votes must be conducted.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of completion of our initial public company, which we completed in September 2015; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period; or (iv) the date on which we are deemed to be a large accelerated filed under the Securities and Exchange Commission's ("SEC"SEC") rules.
Recent2017 Business Combination
WillScot Corporation (formerly known as Double Eagle Acquisition Corp.) was originally incorporated as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On November 29, 2017 (the "Combination Date"), we completed a transaction (the "Business Combination") that resulted in a change of control of our company. In conjunction with the Business Combination,
As part of our Class A common shares with its own working capital, and Sapphire subsequently increased its controlling interest when it acquired the Rollover Interest from WSII's former owners; and
Additional information regarding the Business Combination and the transactions related thereto is available in our Annual Report on Form 10-K that we filed with the SEC on March 16, 2018.15, 2019.
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PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL SNAPSHOT | | |||||
What Am I Voting On? | | |||||
Stockholders are being asked to elect the two director nominees named in this proxy statement for a three-year term. | | |||||
Voting Recommendation: FOR the election of each of the Board's director nominees. | | |||||
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Board Structure
Our Board consists of seven members. It is divided into three classes (Class I, Class II, and Class III) with staggered three-year terms, with one class of directors elected each year. The division of our Board into staggered classes may delay or prevent a change of control of our management or our company.
Our Board has formed three committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee (the "Governance Committee").
Director Nominations
Process for Nominating Directors
The Governance Committee solicits and receives recommendations for potential director candidates from stockholders, management, directors and other sources. The Board will select nominees based on independence, reputation, integrity, diversity of experience and background, depth of experience in business finance or administration,experience, familiarity with national and international business matters, familiarity with the company's industry, other professional commitments, the ability to exercise sound judgment, and other relevant factors.
The Board values diversity of talents, skills, abilities and experiences and believes that Board diversity of all types provides significant benefits to the company. Although the Board has no specific diversity policy, the Board considers the diversity of the Board and potential director candidates in selecting new director candidates.
Stockholder Nominations
The Governance Committee considers unsolicited inquiries and director nominees recommended by stockholders in the same manner as nominees from all other sources. Recommendations should be sent to the Corporate Secretary at 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231. Stockholders may nominate a director candidate to serve on the Board by following the procedures described in our bylaws.
Deadlines for shareholder nominations for WillScot's 20192020 annual meeting of stockholders are included in the "Stockholder Proposals and Director Nominations for the 20192020 Annual Meeting" section on page 24.of this proxy statement.
Director Nominee Biographies & Qualifications
The Board has nominated the two individuals below to stand for re-election for a three-year term expiring at the annual meeting of stockholders in 2021.2022. If a nominee is unable to serve, the Board may identify a substitute nominee or nominees. If that occurs, all valid proxies will be voted for the election of the substitute nominee or nominees
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designated by the Board. Alternatively, the Board may determine to keep a vacancy open or reduce the size of the Board.
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Gerard E. Holthaus Independent Director Chairman of the Board Since: 2017 Director Since: 2017 Director Class: II Term Expires: 2019 Age: 69 | Principal Occupation and Business Experience Mr. Holthaus is the former non-executive chairman of Algeco Scotsman Global S.á.r.l. (April 2010-November 2017), the leading global provider of modular space solutions. He previously served as executive chairman and CEO of Algeco Scotsman, where he was responsible for its North American and European operations, and as executive chairman, president and CEO of WSII prior to its acquisition by Algeco Scotsman in 2007. Mr. Holthaus has also served as interim CEO of BakerCorp International (June-September 2013), an equipment rental services company. Other Public Company Directorships in Last 5 Years • FTI Consulting, Inc. • BakerCorp International, Inc. (former) • Neff Corporation (former) Other Select Directorships • The Baltimore Life Companies • Loyola University of Maryland Board of Trustees (former) • Algeco/Scotsman Holding S.á r.l. (former) | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Mr. Holthaus' history with Williams Scotsman, dating back to 1994 when he was hired as its CEO, provides deep industry knowledge. This knowledge, combined with his experience as an executive and director of public and private companies, enables him to provide meaningful guidance to our Board. | ||||||||
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Rebecca L. Owen Independent Director nominee Director Since: 2019 Director Class: II Term Expires: 2019 Age: 57 | Principal Occupation and Business Experience Ms. Owen is founder and chairwoman of Battery Reef, LLC, a commercial real estate investment and management company. From 1995 until January 2019, she served in various roles at Clark Enterprises, Inc., a private investment firm, and its affiliates, including senior vice president of Clark Enterprises, Inc. (1995-2019), president of CEI Realty, Inc (2015-2019), and chief legal officer of Clark Enterprises, Inc. (1995-2017). Other Public Company Directorships in Last 5 Years • Jernigan Capital, Inc. Other Select Directorships • ASB Capital Management, LLC • Carr Properties • Columbia Equity Trust (former) | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Ms. Owen's experience as an executive and director of public and private companies, together with her financial literacy, experience with leading real estate businesses and knowledge of the real estate industry (including construction projects and associated risks), enable her to provide meaningful guidance to our Board. | ||||||||
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Continuing Director Biographies & Qualifications
The individuals below are members of our Board whose term of office expires at the annual meeting of stockholders in 2020 or 2021. Accordingly, these directors are not standing for re-election at our 2019 annual meeting.
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Mark S. Bartlett Independent Director Director Since: 2017 Director Class: I Term Expires: Age: | Principal Occupation and Business Experience Mr. Bartlett is a former partner of Ernst & Young LLP. He joined the accounting firm in 1972 and worked there until his retirement in 2012, serving as managing partner of the firm's Baltimore office and senior client service partner for the mid-Atlantic region. He is a certified public accountant. Other Public Company Directorships in Last 5 Years • FTI Consulting, Inc. • Rexnord Corporation • T. Rowe Price Group, Inc. Other Select Directorships • The Baltimore Life Companies • Algeco/Scotsman Holding S.á r.l. (former) | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Mr. Bartlett's accounting and finance expertise, experience as a director of public and private companies, and knowledge of our company and industry enable him to provide meaningful guidance to our Board. | ||||||||
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Non-Independent Director Director Since: 2017 Director Class: Term Expires: Age: | Principal Occupation and Business Experience Mr. Other Public Company Directorships in • Target Hospitality Corp. | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Mr. | ||||||||
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Continuing Director Biographies & Qualifications
The individuals below are members of our Board whose term of office expires at the annual meeting of stockholders in 2019 or 2020. Accordingly, these directors are not standing for re-election at our 2018 annual meeting.
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Stephen Robertson Non-Independent Director Director Since: 2017 Director Class: III Term Expires: 2020 Age: 59 | Principal Occupation and Business Experience Mr. Robertson is a co-founder of TDR Capital, a London-based private equity firm with more than €8 billion of committed capital. As a founding partner, he is heavily involved in the firm's strategic investment decisions, including acquisitions, capitalizations and monetizations. Prior to co-founding TDR in 2002, Mr. Robertson was managing partner at DB Capital Partners, where he helped build the European leveraged buyout arm of Deutsche Bank into a leading buyout firm in Europe. He also previously spent a year as managing director of European Leveraged Finance at Merrill Lynch and nine years as managing director of European Leveraged Finance at Bankers Trust. Other Public Company Directorships in Last 5 Years • Target Hospitality Corp. | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Mr. Robertson's experience with mergers and acquisitions, private equity and leverage finance, together with his extensive knowledge of our company and the industrial services industry, enable him to provide meaningful guidance to our Board. | ||||||||
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Jeff Sagansky Independent Director Director Since: 2015 Director Class: III Term Expires: 2020 Age: | Principal Occupation and Business Experience Mr. Sagansky is the former chairman and CEO of Platinum Eagle Acquisition Corp. (December Other Public Company Directorships in Last 5 Years • Global Eagle Entertainment Inc. •
• Scripps Networks Interactive, Inc. (former) • Starz, Inc. (former) • Videocon d2H Limited (former) Other Select Directorships • GoEuro Corporation • Hemisphere Capital Management LLC | |||||||
Key Qualifications and Skills | ||||||||
The Board believes that Mr. Sagansky's experience with mergers and acquisitions and capital raising, together with his experience as an executive and director of growth-oriented public and private companies, enable him to provide meaningful guidance to our Board. | ||||||||
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Non-Independent Director Director Since: 2017 Director Class: Term Expires: Age: | Principal Occupation and Business Experience Mr. | |||||||
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Relevant Director Skills
The Board believes that our directors, as a whole, have the necessary experience and expertise, and each director possesses the particular attributes that qualify him or her to serve on our Board. The principal qualifications are:
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Director Meeting Attendance
Board and Committee Meetings
Directors are expected to participate in all meetings of the Board and each Committee on which he or she serves. Except as described below, duringIn 2018, the Board held 15 meetings, the Audit Committee held 18 meettings, and the Compensation Committee and Governance Committee each director's term of office in 2017, suchheld three meetings. Each director attended no less than 75% of the meetings held by the Board and each Committee on which he served. Mr.served in 2018, except that Messrs. Rosen did not participateand Sagansky each participated in two of the three Compensation Committee meeting held last year due to extraordinary circumstances.meetings.
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In 2017, the Board and each Committee held the following number of meetings:
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Before the Business Combination | 5 | 0 | 0 | n/a | ||||||||||||||||||||||||||||
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After the Business Combination | 2 | 2 | 1 | 0 | ||||||||||||||||||||||||||||
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Total | 7 | 2 | 1 | 0 | ||||||||||||||||||||||||||||
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Other Meetings
Our independent directors meet in closed (executive) sessions, without the presence of management. The Chairman of the Board chairs the meetings of the independent directors, which coincide with regular meetings of the Board.
Given the nature of our company prior to the Business Combination, directors were not expected to attend our annual meetings. None of our directors, including the director who was nominated for reelection, attended our 2017 annual meeting of stockholders. Following the Business Combination, directorsDirectors are expected to attend our annual stockholders meetings. Each of our directors attended the 2018 annual stockholders meeting.
Committees of the Board of Directors
Committee Membership
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Each Committee operates under a written charter. The Committee charters are reviewed annually, and more frequently as necessary, to address any new rules or best practices relating to the responsibilities of the applicable Committee, or changes to such rules and best practices. The applicable Committee approves its own charter amendment and submits it to the Governance Committee, which recommends action by the Board. All charter amendments are submitted to the Board for approval.
A copy of each Committee charter is available on our corporate website at https://investors.willscot.com/corporate-governance/governance-overview.
Audit Committee
The Board has determined that each Audit Committee member is independent and otherwise qualifies as an Audit Committee member pursuant to applicable rules of the SEC and the NASDAQ Capital Market ("Nasdaq"). The Board has determined that Mark S. Bartlett and Gerard E. Holthaus each qualifies as an "audit committee financial expert" within the meaning stipulated by the SEC, based upon the education and experience described in his biography.
The Audit Committee's primary responsibilities are to monitor (i) the integrity of our financial reporting process and internal control system; (ii) the independence and performance of the independent registered public accounting firm; and (iii) the disclosure controls and procedures established by management. In discharging these responsibilities,
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the Audit Committee, among other things: selects, oversees and retains our independent registered public accounting firm; reviews and discusses the scope of the annual audit and written communications by our independent registered public accounting firm to the Audit Committee and management; oversees our financial reporting activities, including the annual audit and the accounting standards and principles we follow; approves audit and non-audit services by our independent registered public accounting firm and applicable fees; reviews and discusses our periodic reports filed with the SEC; reviews and discusses our earnings press releases and communications; oversees our internal audit activities; oversees our disclosure controls and procedures and reviews our internal controls over financial reporting; reviews and discusses risk assessment and risk management policies and practices; oversees the administration of our Code of Business Conduct and Ethics and other ethics policies; reviews, discusses and approves insider and affiliated person transactions; and, administers the policy with respect
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to the hiring of former employees of our independent registered public accounting firm. In addition, the Audit Committee performs an annual self-evaluation, reviews its charter and recommends changes to the Governance Committee for submission to the Board for approval, and prepares the audit committee report required to be included in our annual proxy statement.
Compensation Committee
The Board has determined that all Compensation Committee members are non-employee directors and, except Stephen Robertson, qualify as independent directors. In making its determination, the Board has considered all factors specifically relevant to determining whether a director has a relationship with the company that would materially impair the director's ability to make independent judgments about executive officer compensation, including: (i) the source of such director's compensation; (ii) any consulting, advisory or other compensatory fees paid by the company to the director; and (iii) any other affiliations the director has with the company and its affiliates, including engagements by clients that are companies or affiliates of companies for which members of the Compensation Committee serve as officers or directors. Stephen Robertson serves as a non-independent member of the Compensation Committee pursuant to Nasdaq Rule 5605(d)(2)(B), and, consistent with the requirements of this rule, Mr. Robertson will cease to be a member of the Compensation Committee on or before November 29, 2019.
The Compensation Committee and the Board solicit recommendations from our CEO and other officers regarding compensation matters, including the compensation of executive officers and key employees other than our CEO. They assist the Compensation Committee by providing information such as financial results, short-term and long-term business and financial plans, and strategic objectives, as well as their views on compensation programs and levels. Our CEO attended all of the Compensation Committee meetingmeetings held during 2017.in 2018, although he did not participate in any portion of the meetings related to his compensation and performance. Only members of the Compensation Committee vote on matters before that Committee.
The primary responsibilities of the Compensation Committee include: reviewing non-executive director compensation and recommending changes to the Board for approval; approving our CEO's compensation; reviewing the compensation of other NEOs; administering our equity-based compensation plans and approving awards thereunder; establishing objective performance goals, individual award levels and operative and subjective performance measures, and overseeing all aspects of executive officer incentive compensation; reviewing and approving employment, consulting and other contracts, or arrangements with present and former executive officers; reviewing the compensation disclosures in the annual proxy statement and annual report on Form 10-K filed with the SEC and discussing the disclosures with management; performing annual performance evaluations of our executive officers; performing an annual self-evaluation; reviewing its charter and recommending changes to the Governance Committee for submission to the Board for approval; and submitting all equity-based compensation plans, executive officer compensation plans and material revisions to such plans to a vote of the Board, and to a vote of stockholders if required.
Compensation Consultant
Under its charter, the Compensation Committee is authorized to select, retain and direct the activities, and terminate the services, of compensation advisors, as well as approve fees and expenses of such advisors. The Compensation Committee has retained Frederick W. Cook & Co., Inc. ("Cook") as its independent compensation consultant. The Compensation Committee periodically evaluates Cook's independence from management, taking into consideration all relevant factors, including the independence factors specified in SEC regulations and Nasdaq listing rules.
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In 2017,2018, Cook advised the Compensation Committee on certain executive and director compensation matters arising from the effective reemergence of Williams Scotsman as a standalone public company as a result of the Business Combination.matters. Neither Cook nor our company provided any services to the other during 2017,2018, other than the advisory services provided by Cook to the Compensation Committee.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee serves as, or has in the prior three years served as, one of our officers or employees at any time, except that Jeff Sagansky served as our president and CEO prior to the Business
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| | 9 | | 2019 proxy statement |
Combination. None of our executive officers serves as, or in the prior three years has served as, a member of the board or compensation committee of any other company that has an executive officer serving as a member of our Board or the Compensation Committee.
Governance Committee
The Board has determined that all Governance Committee members are non-employee directors and qualify as independent directors.
The primary responsibilities of the Governance Committee include: identifying and qualifying the annual slate of directors for nomination by the Board; assessing the independence of our directors; identifying and qualifying the candidates for Chairman of the Board and for membership and chairmanship of the Committees for appointment by the Board; identifying and qualifying candidates to fill vacancies occurring between annual meetings of stockholders for election by the Board; monitoring compliance with, and reviewing proposed changes to, our Corporate Governance Guidelines, the Committee charters, and other policies and practices relating to corporate governance for submission to the Board for approval; monitoring and reviewing responses to stockholder communications with non-management directors together with the Chairman of the Board; overseeing the process for director education and Board and Committee self-evaluations; overseeing the process relating to succession planning for our CEO and other executive officer positions; reviewing its charter and recommending changes to the Board for approval; and performing an annual self-evaluation.
Director Compensation
We did not compensateIn 2018, the annual compensation package for our non-executive directors consisted of:
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| Position | | | | Cash Amount | | Restricted Stock (one year vesting) | | ||||||||||||||
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Retainers | ||||||||||||||||||||||
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Non-Executive Chair | $275,000A | $250,000B | ||||||||||||||||||||
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All Other Non-Executive Directors | $75,000 | $100,000 | ||||||||||||||||||||
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Committee Chair Stipend | ||||||||||||||||||||||
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Audit Committee | $30,000C | |||||||||||||||||||||
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Compensation Committee | $15,000 | |||||||||||||||||||||
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Governance Committee | $10,000 | |||||||||||||||||||||
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Meeting feesD | $1,000 / meeting | |||||||||||||||||||||
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| | 10 | | 2019 proxy statement |
2018 Non-Executive Director Compensation Table
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| Name | | | | Fees earned or paid in cash ($)A | | Stock Awards ($)B | | Total ($) | | ||||||||||
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| Mark Bartlett | $184,500 | $150,000 | $334,500 | ||||||||||||||||
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| Gerard Holthaus | $454,500 | $375,000 | $829,500 | ||||||||||||||||
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| Gary LindsayC | $112,500 | $150,000 | $262,500 | ||||||||||||||||
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| Stephen RobertsonC | $112,500 | $150,000 | $262,500 | ||||||||||||||||
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| Fredric Rosen | $144,500 | $150,000 | $294,500 | ||||||||||||||||
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| Jeff Sagansky | $127,500 | $150,000 | $277,500 | ||||||||||||||||
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| Position | | | | Cash Retainer | | Restricted Stock (one year vesting) | | ||||||||||||||
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Non-Executive Chair | $250,000 | $250,000 | ||||||||||||||||||||
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All Other Non-Executive Directors | $75,000 | $100,000 | ||||||||||||||||||||
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Committee Chair Stipend | ||||||||||||||||||||||
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Audit Committee | $20,000 | |||||||||||||||||||||
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Compensation Committee | $15,000 | |||||||||||||||||||||
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Governance Committee | $10,000 | |||||||||||||||||||||
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We believe that this annual compensation package will enable us to attractawards earned by Messrs. Lindsay and retain qualified and experienced individuals to serveRobertson, in their capacity as non-executive directors, andwere transferred to align our director's interests with those of our stockholders.
Board Election & Leadership Structure
Directors are elected by a plurality of the votes cast for such director. If an incumbent director does not receive a greater number of "for" votes than "withheld" votes, then such director must tender his or her resignation to the Board for its consideration.
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The Board's policy is that the Chairman of the Board is an independent, non-employee director. The Governance Committee and the Board believe that this leadership structure is the most appropriate one for the company at this time, as it allows our CEO to focus on the day-to-day management of the business and on executing our strategic priorities, while allowing the Chairman to focus on leading the Board, providing its advice and counsel to the CEO, and facilitating the Board's independent oversight of management.
The Board's Role in Risk Oversight
The Board oversees the risk management of our company. In particular, the Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for us. The Board administers its oversight of our material risks directly through the Board as a whole, as well as through the committees of Board. The Audit Committee, in addition to overseeing financial report and control risks, is responsible for reviewing and discussing risk assessment and risk management policies and practices. The Board's other committees also assist the oversight function of the Board by addressing risks related to the relevant committee's particular area of concentration. For example, the Compensation Committee oversees risks related to our executive compensation plans and arrangements, and the Governance Committee oversees risks associated with the independence of the Board and potential conflicts of interest.
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| | 11 | | 2019 proxy statement |
Each committee reports on discussions of the applicable risks to the Board during the committee reports portion of each meeting of the Board, as appropriate. The Board considers each committee's report, and incorporates the insight provided by the reports into its overall risk management analysis.
Duties & Responsibilities of Chairman
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines that reflect its commitment to oversee the effectiveness of policy and decision-making at the Board and management level, with a view to enhancing shareholder value over the long-term. Our Corporate Governance Guidelines are available online at https://investors.willscot.com/corporate-governance/governance-overview.
Codes of Business Conduct & Ethics
Our Board has adopted a Code of Business Conduct and Ethics ("Code of Business Conduct"), which applies to our directors, officers and employees, and a Code of Ethics for the Chief Executive Officer and Senior Financial Officers ("Code of Ethics"), which supplements our Code of Business Conduct and applies to our CEO, principal financial officer, principal accounting officer and controller. Copies of the Code of Business Conduct and the Code of Ethics are available online at https://investors.willscot.com/corporate-governance/governance-overview. If the Board grants a waiver under our Code of Business Conduct to any director, executive officer or senior financial officer, or we make any substantive amendment to the Code of Ethics or grant any waiver thereunder to a covered officer, we will promptly disclose the nature of the applicable waiver or amendment on our website.
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Board Evaluation Process
Given the nature of our company as a special purpose acquisition company, the Board did not conduct a self-evaluation process prior to the Business Combination. Following the Business Combination and reconstitution of our Board, however,Each year, the Board expects to conduct ana rigorous annual self-evaluation to help determine whether the Board and its committees are functioning effectively. The Governance Committee oversees this process. The self-evaluation process solicits input from the directors regarding the performance and effectiveness of the Board, the Committees and the individual directors, and provides an opportunity for directors to identify areas for improvement. The Governance Committee reviews with the Board the results and feedback from the self-evaluation process and makes recommendations for improvements, as appropriate. With respect to 2018, the Board successfully used this process to evaluate Board and Committee effectiveness and identify opportunities to strengthen the Board.
Director Independence
Nasdaq listing rules require a majority of our Board to be independent. An "independent director" is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the company's board of directors, would interfere with the director's exercise of independent judgment in carrying out the responsibilities of a director.
Our Board annually makes an affirmative determination regarding the independence of each director based upon the recommendation of the Governance Committee and pursuant to the standards in our Corporate Governance Guidelines. Applying these standards, the Board has affirmatively determined that Ms. Owen and Messrs. Bartlett,
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| | 12 | | 2019 proxy statement |
Holthaus, Rosen and Sagansky are "independent directors." Messrs. Robertson and Lindsay, who are partners of TDR Capital, are not "independent directors" due to TDR Capital's controlling ownership position inof our former owner (prior to the Business Combination) and our voting common stock (following the Business Combination).company.
In making this determination, the Board considered the following factors, among others: the ownership positions and contractual arrangements of our Board members and their affiliates with our company, both prior to and after the Business Combination;company; the corporate governance and other policies adopted by the Board to help avoid conflicts and potential conflicts of interest; the contractual arrangements and annual payments between our company and other companies upon which our directors also serve as directors (e.g., FTI Consulting); and, the alignment of the long-term interests of the stockholders that appointed our Board members with the long-term interests of our other stockholders.
Communication with the Board
Stockholders, employees and other interested parties may communicate with any of our directors, our Board as a group, our independent directors as a group or any Board committee as a group by sending such communications to the Corporate Secretary to be forwarded to the Chair of the Board. The Corporate Secretary may respond directly or redirect any such communication to another department of the company for an appropriate response if, in the discretion of the Corporate Secretary, such a direct response is more appropriate. The Corporate Secretary may also ignore any communication that he or she determines to be of a commercial or frivolous nature or otherwise inappropriate for Board consideration.
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| | 13 | | 2019 proxy statement |
PROPOSAL 2 – RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL SNAPSHOT | | |||||
What Am I Voting On? | | |||||
The Board seeks an indication from stockholders of their approval or disapproval of the Audit Committee's appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, | | |||||
Voting Recommendation: FOR the ratification of our independent registered public accounting firm. | | |||||
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The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the company's independent auditor. Ernst & Young LLP ("EY") has been our independent auditor since November 2017. The Audit Committee believes that the retention of EY to serve as the company's independent auditor for 20182019 is in the best interests of the company and its stockholders. If the appointment of EY is not approved by our stockholders, the Audit Committee will consider whether it is appropriate to select another independent auditor.
Independent Registered Public Accounting Firm Change
On November 29, 2017, the Board approved the dismissal of WithumSmith+Brown, PC ("Withum") as our independent registered public accounting firm. We communicated to Withum the Board's decision on November 29, 2017. The reports of Withum on our financial statements as of and for the two most recent fiscal years (endedended December 31, 2016 and December 31, 2015)2015 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles except as follows: such audit report contained an explanatory paragraph in which Withum expressed substantial doubt as to our ability to continue as a going concern if we did not complete a business combination by September 16, 2017.
During our two most recent fiscal years (endedended December 31, 2016 and December 31, 2015)2015 and the subsequent interim period through November 29, 2017, there were no disagreements between us and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum, would have caused it to make reference to the subject matter of the disagreements in its reports on our financial statements for such years.
During our two most recent fiscal years (endedyear ended December 31, 2016 and December 31, 2015)2015 and the subsequent interim period through November 29, 2017, there were no "reportable events" as defined in SEC rules.
We provided Withum with a copy of the foregoing disclosures and Withum furnished us with a letter addressed to the SEC stating it agrees with the statements made by us set forth above.
On November 29, 2017, the Board approved the engagement of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2017, effective November 29, 2017 upon the completion of EY's independence review. During our two most recent fiscal years (endedended December 31, 2016 and December 31, 2015)2015 and the subsequent interim period through November 29, 2017, neither we, nor anyone on our behalf consulted with EY, on behalf of us, regarding the application of accounting principles to a specified transaction (either completed or proposed), the type of audit opinion that might be rendered on our financial statements, or any matter that was either the subject of a "disagreement," or a "reportable event," as defined SEC rules.
RepresentativesDuring our interim period of November 29, 2017 through December 31, 2017 and our fiscal year ended December 31, 2018, neither we, nor anyone on our behalf consulted with EY, on behalf of us, regarding the application of accounting principles to a specified transaction (either completed or proposed), the type of audit opinion that might be rendered on our financial statements, or any matter that was either the subject of a "disagreement," or a "reportable event," as defined SEC rules.
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| | 14 | | 2019 proxy statement |
EY representatives will be present at the annual meeting and will have the opportunity to make a statement and respond to questions. Representatives of Withum are not expected to attend the annual meeting.
Audit Fees & Approval Process
The Audit Committee pre-approves all audit and non-audit services to be performed by the independent auditors in compliance with the Sarbanes-Oxley Act and the SEC rules regarding auditor independence. These services may include audit services, audit-related services, tax services and all other services. Proposed services may either be pre-approved without consideration of specific case-by-case services by the Audit Committee or require the specific pre-approval of the Audit Committee. Unless a type of service has received general pre-approval, it will require specific pre-approval if it is to be provided by EY. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval.
Pre-approval fee levels or budgeted amounts for all services to be provided by EY are established annually by the Audit Committee. Any proposed services exceeding these levels or amounts require specific pre-approval by the Audit Committee. The Audit Committee may delegate either type of approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval
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decisions to the Audit Committee at its next scheduled meeting. The Audit Committee has delegated to its Chair the authority to pre-approve any permissible non-audit services with a fee of $50,000 or less.
Prior to the Business Combination, all of the services listed in the table below were approved by (i) with respect to Withum, theour Audit Committee and (ii) with respect to EY, the audit committee of WSII's prior owner. Following the Business Combination,In 2018, all of the services were approved by our Audit Committee or, if applicable, the Committee Chair.
Independent Registered Public Accounting Firm Fee Information
Fees for professional services provided by our independent auditor included the following:
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| | | | | Ernst & Young LLP | | WithumSmith+Brown, PC | | | | | | Ernst & Young LLP | | WithumSmith+Brown, PC | | ||||||||||||||||||||||||||||||||
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| 2016 | 2017 | 2016 | 2017 | 2017 | 2018 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||
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| Audit(1) | — | $3,819,843(4) | $59,000 | $72,000 | Audit(A) | $3,819,843(B) | $3,769,691 | $72,000 | — | ||||||||||||||||||||||||||||||||||||||
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| Audit Related | — | — | — | — | Audit Related | — | $486,606 | — | — | ||||||||||||||||||||||||||||||||||||||
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| Tax Compliance(2) | — | $28,490 | — | — | Tax Compliance(C) | $28,490 | — | — | — | ||||||||||||||||||||||||||||||||||||||
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| Tax Planning(3) | — | $16,390 | — | — | Tax Planning(D) | $16,390 | $175,000 | — | — | ||||||||||||||||||||||||||||||||||||||
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| All Other | — | — | — | — | All Other | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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Audit Committee Report
The Audit Committee is composed of threefour directors, all of whom meet the independence standards of the Nasdaq, SEC and our Corporate Governance Guidelines, and operates under a written charter adopted by the Board of Directors.Board.
Management is responsible for the company's internal controls and the financial reporting process. EY, acting as independent auditor, is responsible for performing an independent audit of the company's consolidated financial statements and internal control over financial reporting in accordance with standards established by the Public Company Accounting Oversight Board ("PCAOB").
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| | 15 | | 2019 proxy statement |
The Audit Committee has discussed with the company's independent auditor the overall scope and execution of the independent audit and has reviewed and discussed the audited financial statements with management. The Audit Committee also discussed with the independent auditors other matters required by PCAOB auditing standards.
The independent auditors provided to the Audit Committee the written communications required by applicable standards of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence, and the Audit Committee discussed the independent auditors' independence with management and the auditors. The Audit Committee also considered whether the provision of other non-audit services by the company's independent auditors to the company is compatible with maintaining independence.
The Audit Committee concluded that the independent auditors' independence had not been impaired.
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Based on the reviews and discussion referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the company's annual report on Form 10-K for the year ended December 31, 2017.2018.
By the members of the Audit Committee as of April 18, 201815, 2019 consisting of:
Gerard E. Holthaus | Mark S. Bartlett (Chairman) | Fredric D. Rosen | Rebecca L. Owen |
The material in this report is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of the company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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Executive Officers
The following table sets forth information concerning our executive officers, as of April 30, 2019.
Name | Age | Position | ||
Bradley L. Soultz | 49 | President, Chief Executive Officer and Director | ||
Timothy D. Boswell | 40 | Chief Financial Officer | ||
Bradley L. Bacon | 44 | Vice President, General Counsel & Corporate Secretary | ||
Sally J. Shanks | 42 | Chief Accounting Officer & Treasurer |
Bradley L. Soultz has served as our president and chief executive officer ("CEO") and as a member of our Board since we completed the Business Combination in November 2017. He served as president and CEO of WSII from January 2014 until November 2017, where he was responsible for the strategic and operational aspects of the company's North American business and for helping prepare the portfolio company for its reemergence as a public company. Mr. Soultz joined WSII in January 2014 from Novelis Inc., the world leader in aluminum rolling and recycling, where he served as chief commercial and strategy officer. Prior to that, he held management roles with various business units in Europe and North America after joining Novelis in 2005. Mr. Soultz holds a bachelor's degree in agriculture engineering from Purdue University. Mr. Soultz's qualifications to serve on our Board include, among others, his extensive knowledge of our company and industry and his leadership and business experience with multinational companies focused on "lean" practices and processes.
Timothy D. Boswell has served as our chief financial officer since we completed the Business Combination in November 2017. He served as vice president, finance and treasurer of WSII from October 2015 until November 2017, where he was responsible for the company's North American finance, strategy and IT functions. He previously served as chief of staff to the Algeco Group CEO from September 2014 to October 2015, where he supported the execution of global initiatives. Mr. Boswell also served as vice president of strategy and business development from June 2012 until September 2014, where he was responsible for the development and execution of strategic initiatives in North America with a focus on pricing, value-added products and services, and marketing. Prior to joining WSII in 2012, Mr. Boswell was a vice president with Sterling Partners, a Chicago-based private equity firm with $4 billion of assets under management, where he served in both principal investing and portfolio company management roles. Before joining Sterling Partners, he held private equity and investment banking roles with Banc of America Capital Investors, Edgeview Partners, and Bear, Stearns & Co. Inc. Mr. Boswell holds a bachelor's degree in economics and psychology from Davidson College and a master's degree in business administration from the Darden Graduate School of Business Administration.
Bradley L. Bacon has served as our Vice President, General Counsel & Corporate Secretary since we completed the Business Combination in November 2017. He served as Vice President, General Counsel & Corporate Secretary of WSII from August 2017 until November 2017, where he was responsible for the company's legal and compliance functions. Mr. Bacon joined WSII in August 2017 from Crestwood Equity Partners LP (NYSE: CEQP), where he served as Vice President, Assistant General Counsel and Assistant Secretary since October 2012 with responsibilities for mergers and acquisitions, capital transactions, infrastructure development projects, and other corporate matters. Before joining Crestwood's predecessor, he was a partner with Husch Blackwell LLP, a Kansas City-based law firm, after holding various legal positions within Aquila, Inc. (NYSE: ILA), a former Fortune 500 energy company. Mr. Bacon holds a bachelor's degree in business administration from the University of Missouri and a law degree from the University of Kansas.
Sally J. Shanks has served as our Chief Accounting Officer and Treasurer since we completed the Business Combination in November 2017. She served as Chief Accounting Officer of WSII from September 2017 until November 2017, where she was responsible for the company's North American accounting, tax and treasury functions. Ms. Shanks joined WSII from Merkle Inc., a global technology-enabled performance marketing agency, where she served in various financial leadership roles from 2009 - 2017, including serving as Senior Vice President, Accounting & Treasury. She joined Merkle in 2009 following her departure from Laureate Education where she was Director of Accounting and Reporting from 2003 through 2008. Prior to Laureate Education, Ms. Shanks had financial reporting roles at another public company and started her career with PricewaterhouseCoopers. Ms. Shanks holds a bachelor's degree in accounting from Providence College.
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| | 17 | | 2019 proxy statement |
We are an "emerging growth company," as defined in Section 101(a)(19)(C) of the JOBS Act. As an emerging growth company, we are not required under SEC rules to include a Compensation Discussion and Analysis section in this proxy statement. We have elected to comply with reduced compensation disclosure requirements, as permitted under the JOBS Act.
Summary Compensation Table
The following table shows for the fiscal years ended December 31, 2018, 2017 and 2016, compensation awarded or paid to, or earned by, our CEO and two other most highly compensated NEOs at December 31, 2017.2018.
Name and Principal Position(1) | | Year | | Salary ($)(2) | | Bonus ($)(3) | | Non-Equity Plan Compensation ($)(4) | | All Other Compensation ($) | | Total ($) | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| | Bradley L. Soultz | | | | | | | | | | | | | | | Name and Principal Position(1) | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | Option Awards ($)(5) | Non-Equity Plan Compensation ($)(6) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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| | President & Chief Executive Officer | | | 2017 | | | 404,367 | | | 225,000 | | | 430,597 | | | 1,629,632(5) | | | 2,689,596 | | | Bradley L. Soultz | 2018 | 600,000 | 0 | 3,768,002 | 2,249,338 | 534,168 | 95,009 | (7) | 7,246,517 | ||||||||||||||||||||||||||||||||||||||||||||||
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| | | 2016 | | | 367,533 | | | 75,000 | | | 36,984 | | | 40,999 | | | 520,516 | | | President & Chief Executive Officer | 2017 | 404,367 | 225,000 | 0 | 0 | 430,597 | 1,629,632 | (8) | 2,689,596 | ||||||||||||||||||||||||||||||||||||||||||||||
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| | Timothy D. Boswell | | | | | | | | | | | | | | | 2016 | 367,533 | 75,000 | 0 | 0 | 36,984 | 40,999 | (9) | 520,516 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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| | Chief Financial Officer | | | 2017 | | | 298,308 | | | 225,000 | | | 184,627 | | | 449,119(5) | | | 1,157,054 | | | Timothy D. Boswell | 2018 | 375,000 | 0 | 1,159,386 | 692,102 | 250,544 | 34,374 | (10) | 2,511,406 | ||||||||||||||||||||||||||||||||||||||||||||||
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| | | 2016 | | | 274,151 | | | 50,000 | | | 89,205 | | | 36,376 | | | 449,732 | | | Chief Financial Officer | 2017 | 298,308 | 225,000 | 0 | 0 | 184,627 | 449,119 | (11) | 1,157,054 | ||||||||||||||||||||||||||||||||||||||||||||||
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| | Bradley L. Bacon | | | | | | | | | | | | | | | 2016 | 274,151 | 50,000 | 0 | 0 | 89,205 | 36,376 | (12) | 449,732 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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| | Vice President, General Counsel & Corporate Secretary | | | 2017 | | | 95,625 | | | 30,000 | | | 0 | | | 94,203(6) | | | 219,828 | | | Bradley L. Bacon | 2018 | 296,027 | 0 | 507,960 | 303,231 | 78,236 | 26,911 | (13) | 1,212,365 | ||||||||||||||||||||||||||||||||||||||||||||||
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Vice President, General Counsel & Corporate Secretary | 2017 | 95,625 | 30,000 | 0 | 0 | 0 | 94,203 | (14) | 219,828 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reported amounts include payments made by WSII prior to the consummation of the Business Combination. In 2016, Mr. Bacon was not an employee of our company or WSII. Messrs. Soultz, Boswell and Bacon each became an NEO upon consummation of the Business Combination.
In 2018, Mr. Soultz, Mr. Boswell and Mr. Bacon were paid $448,168, $194,644, and $78,236, respectively, under the STIP. The 2018 STIP payments represent amounts earned under performance-based grants awarded in 2017, and Mr. Bacon received a prorated amount based on his partial year of service in 2017. Messrs. Soultz and Boswell were also paid $86,000 and $55,900, respectively, under the MTIP. The 2018 MTIP payments represent amounts earned over a 3-year performance period under grants awarded in 2015, and the 2015 grants represent the final grants awarded under the MTIP prior to its cancellation.
In 2017, Mr. Soultz was paid $352,597 and $78,000 under WSII's annual performance-based short-term cash incentive plan ("the STIP") and WSII's three-year performance-based medium-term cash incentive plan ("MTIP,"), respectively. In 2017, Mr. Boswell was paid $149,527 and $35,100 under the STIP and the MTIP, respectively. The 2017 STIP payments represent amounts earned under performance-based grants awarded in 2016, and the 2017 MTIP payments represent amounts earned over a 3-year performance period under grants awarded in 2014.
In 2016, Mr. Soultz was paid $36,984 under the STIP. In 2016, Mr. Boswell was paid $59,730 and $29,475 under the STIP and MTIP, respectively. The STIP payments represent amounts earned under performance-based grants awarded in 2015, and the MTIP payment represent an amount earned over a 3-year performance period under a grant awarded in 2013.
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| | 18 | | 2019 proxy statement |
Outstanding Equity Awards at Fiscal Year-End
The following table presents certain information concerning equity awards held by our CEO and two other most highly compensated NEOs as of December 31, 2018.
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| Name | Number of securities underlying unexercised options unexercisable (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | |||||||||||||||||||||||
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| Bradley L. Soultz | 408,497 | (2) | $ | 13.60 | March 20, 2028 | 277,059 | (3) | $2,609,895.78 | ||||||||||||||||||||
| President & Chief Executive Officer | ||||||||||||||||||||||||||||
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| Timothy D. Boswell | 125,691 | (2) | $ | 13.60 | March 20, 2028 | 85,249 | (3) | $803,045.58 | ||||||||||||||||||||
| Chief Financial Officer | ||||||||||||||||||||||||||||
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| Bradley L. Bacon | 55,069 | (2) | $ | 13.60 | March 20, 2028 | 37,350 | (3) | $351,837 | ||||||||||||||||||||
| Vice President, General Counsel & Corporate Secretary | ||||||||||||||||||||||||||||
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Equity Compensation Plan Information
On November 16, 2017, our shareholders approved a new long-term incentive award plan (the "Plan") in connection with the Business Combination. The Plan is administered by the Compensation Committee. Under the Plan, the Compensation Committee may grant an aggregate of 4,000,000 shares of Class A common stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and performance compensation awards.
As of December 31, 2018, 1,514,043 securities had been granted under the Plan.
Plan Category | Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Common Shares Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Shares Reflected in Column(a)) (c) | |||
Equity compensation plans approved by WillScot stockholders(1) | 1,514,043 | $13.69 | 2,485,957 | |||
Equity compensation plans not approved by WillScot stockholders | — | — | — | |||
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Totals | 1,514,043 | $13.69 | 2,485,957 | |||
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Employment Agreements
The employment arrangements we have with our CEO and two other most highly compensated NEOs set forth in the Summary Compensation Table are summarized below.
Bradley L. Soultz, President and Chief Executive Officer
On November 29, 2017, we entered into an employment agreement with Mr. Soultz. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a non-renewal notice to the other party at least 120 days before the expiration of the initial term or the renewal term, as applicable. Mr. Soultz's agreement provides for an annual base salary of $600,000, along with a short-term incentive target of $798,000 (133% of annual salary) and a long-term incentive annual allocation of $1,000,000 (125% of annual short-term incentive target) comprised of 50% time-vested options and 50% restricted stock vesting ratably over four years. Upon completion of the Business Combination, Mr. Soultz became entitled to certain additional benefits, including a $1,600,000 one-time grant of 50% time vested stock options and 50% restricted stock. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Soultz's compensation to include a base salary of $750,000, a short-term incentive target of $900,000 (120% of annual salary), and a long-term incentive annual allocation of $1,950,000.
If Mr. Soultz's employment is terminated other than for cause, he will be entitled to 12 months base salary plus a pro-rata bonus for the year of termination, based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. If his employment is terminated other than for cause, within the first year of either his initial long-term incentive grant of $1,600,000 or his first annual long-term incentive grant of $1,000,000, a minimum of 25% of the respective grant will vest. In the event of a change of control, if Mr. Soultz is terminated other than for cause within 12 months of such change of control, he will be entitled to 150% of his base salary, his target annual incentive award and a pro rata portion of his target bonus as well as a continuation of his health insurance for the severance period and vesting of any unvested equity awards.
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| | 20 | | 2019 proxy statement |
Timothy D. Boswell, Chief Financial Officer
On November 29, 2017, we entered into an employment agreement with Mr. Boswell. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a non-renewal notice to the other party at least 120 days before the expiration of the initial term or the renewal term, as applicable. Mr. Boswell's agreement provides for an annual base salary of $375,000, along with a short-term incentive target of $225,000 (60% of annual salary) and a long-term incentive annual allocation of $300,000 (133% of short-term incentive target) comprised of 50% time-vested options and 50% restricted stock vesting ratably over four years. Upon completion of the Business Combination, Mr. Boswell became entitled to certain additional benefits including a $500,000 one-time grant of 50% time vested stock options and 50% restricted stock. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Boswell's compensation to include a base salary of $425,000, a short-term incentive target of $301,750 (71% of annual salary), and a long-term incentive annual allocation of $500,000.
If Mr. Boswell's employment is terminated other than for cause, he will be entitled to 12 months base salary plus a pro rata bonus for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. If his employment is terminated other than for cause, within the first year of either his initial long-term incentive grant of $500,000 or his first annual long-term incentive grant of $225,000, a minimum of 25% of the respective grant will vest. In the event of a change of control, if Mr. Boswell is terminated other than for cause within 12 months of such change of control, he will be entitled to his full base salary plus target annual incentive awards, his pro rata target bonus and health insurance continuation for the severance period, along with vesting of any unvested equity awards.
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Bradley L. Bacon, Vice President, General Counsel and Corporate Secretary
As of August 28, 2017, we entered into an employment letter with Mr. Bacon. His employment is "at will," and his employment letter does not include a specific term. Mr. Bacon's letter provides for an annual base salary of $292,500, along with a short-term incentive target of $175,500 (60% of annual salary) and a long-term incentive annual allocation of $175,500 (100% of short-term incentive target). He also received a $30,000 signing bonus and, upon the commencement of our long-term incentive compensation plan, Mr. Bacon became entitled to receive an initial award equal to $175,500.
If Mr. Bacon's employment is terminated other than for cause, he is entitled to 12 months' base salary plus the value of the accrued short-term incentive plan for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Review and Approval of Related Person Transactions
Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). In November 2017, ourOur Board has adopted a written policy on related person transactions that establishes the policies and procedures for the review and approval or ratification of related person transactions.
A "Related Person Transaction" is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A "Related Person" means:
The Audit Committee is responsible for reviewing related party transactions.
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| | 21 | | 2019 proxy statement |
Related Person Transactions
In the ordinary course of business, we enter into commercial transactions to receive consulting and advisory services, from time to time, from companies for which our directors may serve as non-executive directors. All of those transactions have been approved by the audit committee of our board. We consider these transactions to be arm's length and, except for Mr. Robertson's and Mr. Lindsay's respective pecunicary interests in TDR Capital, we do not believe that the directors had or have any material direct or indirect pecuniary or other interests in such engagements.
Below is summary of transactions in which we participated during 20172018 in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than five percent of our
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capital stock or any members of their immediate family had or will have a direct or indirect material interest, other than compensation arrangements described under "Executive Compensation" above.
Subscription Agreement
On the Combination Date, we entered into a subscription agreement (the "Subscription Agreement") under which Sapphire purchased 43,568,901 shares of our Class A shares at a price of $9.60 per share, for a total purchase price of $418.3 million. Subject to limited exception, Sapphire cannot transfer any shares acquired under the Subscription Agreement and beneficially owned by Sapphire for a period of six months following the Combination Date. The shares purchased by Sapphire are subject to the Registration Rights Agreement.
Equity Compensation Plan Information On As of December 31, 2018, 1,514,043 securities had been granted Employment Agreements The Registration Rights Agreementthe Combination Date, we entered into an amended and restated registration rights agreementNovember 16, 2017, our shareholders approved a new long-term incentive award plan (the "Registration Rights AgreementPlan") in connection with Sapphire and certain other parties that amends and restates a registration rights agreement dated September 10, 2015, among our company and certain initial investors.the Business Combination. The Plan is administered by the Compensation Committee. Under the agreement, wePlan, the Compensation Committee may grant an aggregate of 4,000,000 shares of Class A common stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and performance compensation awards.to Sapphireunder the Plan. Plan Category Common Shares
to be Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
(a)Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b)Common Shares
Remaining Available for
Future Issuance under
Equity Compensation
Plans (Excluding Shares
Reflected in Column(a))
(c) Equity compensation plans approved by WillScot stockholders(1) 1,514,043 $13.69 2,485,957
Equity compensation plans not approved by WillScot stockholders
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—
— Totals 1,514,043 $13.69 2,485,957 initial investors certain demand, shelf and piggyback registration rights covering allawards outstanding under the Plan, see Note 17 of our Class A shares owned by each holder, until such shares cease to be registrable securities. 2018 audited financial statements in our Form 10-K for the year ended December 31, 2018.registration rightsemployment arrangements we have with our CEO and two other most highly compensated NEOs are subject to customary lock-up provisions.
Earnout Agreement
On the Combination Date, we entered into an earnout agreement (the "Earnout Agreement") with SapphireBradley L. Soultz, President and each of DEAL and Harry E. Sloan (together, the "Founders"), under which 12,425,000 Class A shares held by the Founders were placed in escrow. The escrowed shares will be released to Sapphire or the Founders upon the occurrence of certain triggering events, and any shares that remain in escrow at the expiration of the agreement's three-year term will be transferred to us for cancellation.
In addition, 14,550,000 private warrants owned by certain Founders were deemed restricted under the Earnout Agreement. The warrants are deemed restricted for one year after the Combination Date unless we consummate a qualifying acquisition, at which time the restrictions will lapse and one third (1/3) of the warrants will be transferred to Sapphire and the Founders will retain ownership of the remaining two thirds (2/3) of the warrants.
Escrow Agreement
On the Combination Date, we entered into an escrow agreement with the Founders, Sapphire and Continental Stock Transfer & Trust Company, as escrow agent. The agreement establishes the escrow account and arrangements contemplated by the Earnout Agreement. The voting and economic rights of the escrowed shares are suspended while such shares remain in escrow.
Equity Commitment LetterChief Executive Officer
On November 6,29, 2017, we entered into an amended equity commitment letteremployment agreement with TDR Capital II under which TDR Capital II committedMr. Soultz. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a non-renewal notice to invest upthe other party at least 120 days before the expiration of the initial term or the renewal term, as applicable. Mr. Soultz's agreement provides for an annual base salary of $600,000, along with a short-term incentive target of $798,000 (133% of annual salary) and a long-term incentive annual allocation of $1,000,000 (125% of annual short-term incentive target) comprised of 50% time-vested options and 50% restricted stock vesting ratably over four years. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Soultz's compensation to $500 million in our companyinclude a base salary of $750,000, a short-term incentive target of $900,000 (120% of annual salary), and a long-term incentive annual allocation of $1,950,000.
If Mr. Soultz's employment is terminated other than for cause, he will be entitled to fund12 months base salary plus a pro-rata bonus for the year of termination, based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. In the event of a change of control, if Mr. Soultz is terminated other than for cause within 12 months of such change of control, he will be entitled to 150% of his base salary, his target annual incentive award and a pro rata portion of his target bonus as well as a continuation of his health insurance for the cash consideration payable to WSII's prior owners in the Business Combination, certain transaction costsseverance period and expenses incurred to facilitate the Business Combination, and certain acquisitions after the Business Combination. Through Sapphire, TDR Capital II invested $418.3 million through Sapphire's purchasevesting of Class A shares under the Subscription Agreement. If we elect to utilize any portion of the remaining commitment ($81.7 million), we would do so by issuing new Class A shares to TDR Capital II or its affiliates at a price of $10 per share. Unless extended in its sole discretion, TDR Capital II's obligation expires automatically upon the earlier of November 29, 2018 and the date on which the $500 million commitment has been utilized.unvested equity awards.
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Transition Services AgreementTimothy D. Boswell, Chief Financial Officer
On the Combination Date,November 29, 2017, we entered into an employment agreement with Mr. Boswell. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a transition services agreement (the "TSA") with WS Holdings, WSII, and Algeco Scotsman Global S.á r.l. ("Algeco Global"), which is controlled by TDR Capital. The TSA is designed to ensure an orderly transition of WSII's business and effectuate a transaction in which WSII's remote accommodations business was transferred to affiliates of Algeco Global prior to the Business Combination. Under the TSA, each party will provide or cause to be providednon-renewal notice to the other party or its affiliates certain services, use of facilities and other assistance on a transitional basis. Subject to limited exception, services will cease to be provided under the TSA on orat least 120 days before the first anniversaryexpiration of the Combination Date.initial term or the renewal term, as applicable. Mr. Boswell's agreement provides for an annual base salary of $375,000, along with a short-term incentive target of $225,000 (60% of annual salary) and a long-term incentive annual allocation of $300,000 (133% of short-term incentive target) comprised of 50% time-vested options and 50% restricted stock vesting ratably over four years. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Boswell's compensation to include a base salary of $425,000, a short-term incentive target of $301,750 (71% of annual salary), and a long-term incentive annual allocation of $500,000.
If Mr. Boswell's employment is terminated other than for cause, he will be entitled to 12 months base salary plus a pro rata bonus for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. In the event of a change of control, if Mr. Boswell is terminated other than for cause within 12 months of such change of control, he will be entitled to his full base salary plus target annual incentive awards, his pro rata target bonus and health insurance continuation for the severance period, along with vesting of any unvested equity awards.
Shareholders AgreementBradley L. Bacon, Vice President, General Counsel and Corporate Secretary
On the Combination Date, we entered into a shareholders agreement (the "Shareholders Agreement") with WSII's former owners relating to our ownership interests in the WS Holdings. WSII's former owners subsequently transferred their interests in WS Holdings, and their rights under the Shareholders Agreement and Exchange Agreement, to Sapphire.
The agreement contains pre-emptive rights to permit Sapphire to avoid dilution and maintain its aggregate percentage ownership in WS Holdings on a fully diluted basis upon any future issuanceAs of any additional shares of our company or WS Holdings for cash. Among other things, it also (i) contains customary tag along and drag along provisions and protective provisions for Sapphire, (ii) provides that Sapphire cannot, prior November 29, 2018, transfer its shares of WS Holdings except to certain permitted transferees, (iii) grants to us a right of first refusal to purchase the shares of WS Holdings not owned by us, which will not apply to transfers or exchanges permitted under the Shareholders Agreement or the Exchange Agreement, and (iv) imposes transfer restrictions on shares of our Class B common stock.
Exchange Agreement
On the Combination Date,August 28, 2017, we entered into an exchange agreement (theemployment letter with Mr. Bacon. His employment is "at will," and his employment letter does not include a specific term. Mr. Bacon's letter provides for an annual base salary of $292,500, along with a short-term incentive target of $175,500 (60% of annual salary) and a long-term incentive annual allocation of $175,500 (100% of short-term incentive target).
If Mr. Bacon's employment is terminated other than for cause, he is entitled to 12 months' base salary plus the value of the accrued short-term incentive plan for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Review and Approval of Related Person Transactions
Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board has adopted a written policy on related person transactions that establishes the policies and procedures for the review and approval or ratification of related person transactions.
A "Exchange AgreementRelated Person Transaction") with WSII's former owners, is a transaction, arrangement or relationship in which WSII's former owners subsequently transferred to Sapphire. Subject to the pre-emptive rights set forth in the Shareholders Agreement, the Exchange Agreement provides that WS Holdings common stock may be subject to downward adjustment by the issuance of additional WS Holdings common stock to us for (i) issuanceswe or any of our Classsubsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A shares,"Related Person" means:
The exchange ratioAudit Committee is responsible for converting WS Holdings common stock into our Class A shares will be determined by a special committee, taking into account the average trading price of our Class A shares over a 20 day trading period and Sapphire's aggregate ownership percentage of WS Holdings common stock at the time of the exchange, as adjusted to take into account the dilutive effect of certainreviewing related party transactions. Upon such exchange, we will automatically redeem for no consideration all of our Class B common stock outstanding.
Indemnification Agreements
On the Combination Date, we entered into indemnification agreements with each of our directors and executive officers. The agreements provide for indemnification and advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to our company or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
Employment Agreement
In April 2010, WSII entered into employment agreement with our Chairman, Mr. Holthaus, under which he was compensated as a part-time employee and as chairmen of the board of directors of WSII and certain affiliates controlled by TDR Capital. He was paid an annual salary of $200,000, was eligible for an annual performance bonus
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($500,000 target),Related Person Transactions
In the ordinary course of business, we enter into commercial transactions to receive consulting and received perksadvisory services, from time to time, from companies for which our directors may serve as non-executive directors. All of those transactions have been approved by the audit committee of our board. We consider these transactions to be arm's length and, benefits consistent with those offered toexcept for Mr. Robertson's and Mr. Lindsay's respective pecunicary interests in TDR Capital, we do not believe that the directors had or have any material direct or indirect pecuniary or other WSII executives. In 2017, WSII paid $1,485,598 to Mr. Holthaus for salaryinterests in such engagements.
Below is summary of transactions in which we participated during 2018 in which the amount involved exceeded or will exceed $120,000, and bonusesin which any of our directors, executive officers or holders of more than five percent of our capital stock or any members of their immediate family had or will have a direct or indirect material interest, other than compensation arrangements described under his agreement. This amount included an accelerated payment of two years of performance bonuses (paid out at target), $744,167 of which was indirectly funded by Algeco/Scotsman Holding S.á r.l. ("Algeco Holding"), pursuant to a separation and release agreement between Mr. Holthaus and Algeco Holding. The employment agreement was terminated on the Combination Date."Executive Compensation" above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Equity Compensation Plan Information
On November 16, 2017, our shareholders approved a new long-term incentive award plan (the "Plan""Plan") in connection with the Business Combination. The Plan is administered by the Compensation Committee. Under the Plan, the Compensation Committee may grant an aggregate of 4,000,000 shares of Class A common stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and performance compensation awards.
As of December 31, 2017, no2018, 1,514,043 securities had been granted under the Plan.
Plan Category | Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Common Shares Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Shares Reflected in Column(a)) (c) | |||
Equity compensation plans approved by WillScot stockholders(1) | 1,514,043 | $13.69 | 2,485,957 | |||
Equity compensation plans not approved by WillScot stockholders | — | — | — | |||
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Totals | 1,514,043 | $13.69 | 2,485,957 | |||
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*Awards issuable
Employment Agreements
The employment arrangements we have with our CEO and two other most highly compensated NEOs are summarized below.
Bradley L. Soultz, President and Chief Executive Officer
On November 29, 2017, we entered into an employment agreement with Mr. Soultz. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a non-renewal notice to the other party at least 120 days before the expiration of the initial term or the renewal term, as applicable. Mr. Soultz's agreement provides for an annual base salary of $600,000, along with a short-term incentive target of $798,000 (133% of annual salary) and a long-term incentive annual allocation of $1,000,000 (125% of annual short-term incentive target) comprised of 50% time-vested options and 50% restricted stock restricted stock units, stock appreciation rightsvesting ratably over four years. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Soultz's compensation to include a base salary of $750,000, a short-term incentive target of $900,000 (120% of annual salary), and a long-term incentive annual allocation of $1,950,000.
If Mr. Soultz's employment is terminated other than for cause, he will be entitled to 12 months base salary plus a pro-rata bonus for the year of termination, based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. In the event of a change of control, if Mr. Soultz is terminated other than for cause within 12 months of such change of control, he will be entitled to 150% of his base salary, his target annual incentive award and a pro rata portion of his target bonus as well as a continuation of his health insurance for the severance period and vesting of any unvested equity awards.
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Timothy D. Boswell, Chief Financial Officer
On November 29, 2017, we entered into an employment agreement with Mr. Boswell. The agreement provides for an initial employment term of 36 months, with automatic successive one year extensions after the end of the initial term, unless either party provides a non-renewal notice to the other party at least 120 days before the expiration of the initial term or the renewal term, as applicable. Mr. Boswell's agreement provides for an annual base salary of $375,000, along with a short-term incentive target of $225,000 (60% of annual salary) and a long-term incentive annual allocation of $300,000 (133% of short-term incentive target) comprised of 50% time-vested options and 50% restricted stock vesting ratably over four years. The agreement also includes a 12 month non-competition and non-solicitation provision.
In March 2019, we adjusted Mr. Boswell's compensation to include a base salary of $425,000, a short-term incentive target of $301,750 (71% of annual salary), and a long-term incentive annual allocation of $500,000.
If Mr. Boswell's employment is terminated other than for cause, he will be entitled to 12 months base salary plus a pro rata bonus for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period. In the event of a change of control, if Mr. Boswell is terminated other than for cause within 12 months of such change of control, he will be entitled to his full base salary plus target annual incentive awards, his pro rata target bonus and health insurance continuation for the severance period, along with vesting of any unvested equity awards.
Bradley L. Bacon, Vice President, General Counsel and Corporate Secretary
As of August 28, 2017, we entered into an employment letter with Mr. Bacon. His employment is "at will," and his employment letter does not include a specific term. Mr. Bacon's letter provides for an annual base salary of $292,500, along with a short-term incentive target of $175,500 (60% of annual salary) and a long-term incentive annual allocation of $175,500 (100% of short-term incentive target).
If Mr. Bacon's employment is terminated other than for cause, he is entitled to 12 months' base salary plus the value of the accrued short-term incentive plan for the year of termination based on actual performance plus accrued and unpaid benefits and health insurance continuation for the severance period.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Review and Approval of Related Person Transactions
Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board has adopted a written policy on related person transactions that establishes the policies and procedures for the review and approval or ratification of related person transactions.
A "Related Person Transaction" is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A "Related Person" means:
The Audit Committee is responsible for reviewing related party transactions.
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Related Person Transactions
In the ordinary course of business, we enter into commercial transactions to receive consulting and advisory services, from time to time, from companies for which our directors may serve as non-executive directors. All of those transactions have been approved by the audit committee of our board. We consider these transactions to be arm's length and, except for Mr. Robertson's and Mr. Lindsay's respective pecunicary interests in TDR Capital, we do not believe that the directors had or have any material direct or indirect pecuniary or other interests in such engagements.
Below is summary of transactions in which we participated during 2018 in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than five percent of our capital stock or any members of their immediate family had or will have a direct or indirect material interest, other than compensation arrangements described under "Executive Compensation" above.
Registration Rights Agreement
On the Combination Date, Sapphire purchased 43,568,901 shares of our Class A shares at a price of $9.60 per share, for a total purchase price of $418.3 million. In connection with the private placement, we entered into a registration rights agreement with Sapphire and certain other parties entered into a registration rights agreement that amended and restated a 2015 registration rights agreement between Double Eagle and certain of its initial investors. Under the amended and restated registration rights agreement, we provided to Sapphire and the Double Eagle investors customary demand, shelf and piggyback registration rights for unregistered securities held by the shareholders.
Earnout Arrangement
On the Combination Date, we entered into an earnout agreement (the "Earnout Agreement") with Sapphire and each of DEAL and Harry E. Sloan (together, the "Founders"), under which 12,425,000 Class A shares held by the Founders were placed in escrow and 14,550,000 private warrants owned by the Founders were deemed restricted under the Earnout Agreement.
In January 2018, 3,106,250 escrowed shares were released to each of Sapphire and the Founders. The release was triggered when the closing price of our Class A shares exceeded $12.50 per share for a period of 20 out of 30 trading days. In August 2018, the remaining escrowed shares were released to Sapphire and the Founders, the Founders transferred 4,850,000 warrants to Sapphire, and the restrictions on the Founders' warrants lapsed. The releases and warrant transfer were triggered when the Company completed the ModSpace acquisition, which constituted a "Qualifying Acquisition" under the Earnout Agreement. The Earnout Agreement and escrow agreement were effectively terminated upon the release of the escrowed shares and warrant restrictions.
Equity Commitment Letter
On November 6, 2017, we entered into an amended equity commitment letter with TDR Capital II under which TDR Capital II committed to invest up to $500 million in our company to fund a portion of the cash consideration payable to WSII's prior owners in the Business Combination, certain transaction costs and expenses incurred to facilitate the Business Combination, and certain acquisitions after the Business Combination. $418.3 million of the commitment was utilized when Sapphire purchased Class A shares on the Combination Date. We did not subsequently elect to utilize any portion of the remaining commitment ($81.7 million), and the commitment expired on November 29, 2018.
Shareholders Agreement
On the Combination Date, we entered into a shareholders agreement (the "Shareholders Agreement") with WSII's former owners that governs the ownership and operation of WS Holdings. The agreement contains, among other things, (i) preemptive rights that permit Sapphire (to whom WSII's former owners' interest was assigned in 2017) to avoid dilution and maintain its ownership percentage in WS Holdings on a fully diluted basis upon any future issuance of shares of WS Holdings or WillScot; (ii) customary tag along and drag along provisions; (iii) protective provisions
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designed to protect Sapphire from changes to WS Holdings' organizational documents that would have a materially disproportionate effect on Sapphire; and (iv) transfer restrictions on our Class B common shares held by Sapphire. The Shareholder Agreement also provides to us a right of first refusal to purchase Sapphire's shares of WS Holdings, and provides that acquisitions of businesses similar to WSII's business must be consummated by WS Holdings or one of its wholly-owned subsidiaries.
Exchange Agreement
On the Combination Date, we entered into an exchange agreement (the "Exchange Agreement") with WS Holdings and WSII's former owners. Under the agreement, Sapphire (to whom WSII's former owners' interest was assigned in 2017) acquired the right at any time prior to November 29, 2022, to exchange all, but not less than all, of its WS Holdings shares into new shares of our Class A common stock in a private placement. Subject to potential adjustment, Sapphire's common shares of WS Holdings (representing Sapphire's then-current ownership percentage of WS Holdings) are exchangeable into new WillScot Class A shares representing an equal ownership percentage of our Class A common stock. The exchange ratio is subject to adjustment based on, among other things, (i) Sapphire's election to exercise, or to refrain from exercising, its preemptive rights under the Shareholders Agreement and (ii) the dilutive effect of certain issuances of equity securities and derivatives by WS Holdings or WillScot that do not trigger such preemptive rights. Upon Sapphire's exercise of its exchange right, we will automatically redeem for no consideration all of our Class B common shares owned by Sapphire.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership
The following table sets forth information regarding the beneficial ownership of our common stock as of April 23, 201822, 2019 by each person who is the beneficial owner of more than 5% of our common shares; each of our executive officers and directors; and all of our executive officers and directors as a group. The beneficial ownership of our common stock is based on 84,644,774108,693,209 Class A shares and 8,024,419 Class B shares issued and outstanding, as of April 23, 2018.22, 2019.
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Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all common shares beneficially owned by them. To our knowledge, no common shares beneficially owned by any executive officer, director or director nominee have been pledged as security.
Class A Common Stock | Class B Common Stock | Class A Common Stock | Class B Common Stock | |||||||||||||
Name and Address of Beneficial Owner | Number of Shares | % | Number of Shares | % | Number of Shares | % | Number of Shares | % | ||||||||
Directors and Executive Officers(1) | ||||||||||||||||
Bradley L. Soultz(2) | 685,556 | * | — | * | 185,385 | * | — | — | ||||||||
Timothy D. Boswell(2) | 210,940 | * | — | * | 55,534 | * | — | — | ||||||||
Bradley L. Bacon(2) | 92,419 | * | — | * | 19,994 | * | — | — | ||||||||
Sally J. Shanks(2) | 16,500 | * | — | * | 2,788 | * | — | — | ||||||||
Gerard E. Holthaus(3) | 309,225 | * | — | * | 349,018 | * | — | — | ||||||||
Gary Lindsay | — | * | — | * | — | — | — | — | ||||||||
Stephen Robertson(4)(9) | 46,382,531 | 54.8% | 8,024,419 | 100% | 51,578,740 | 46.4% | 8,024,419 | 100% | ||||||||
Mark S. Bartlett(5) | 3,690 | * | — | * | 94,607 | * | — | — | ||||||||
Jeff Sagansky(6) | 4,818,065 | 5.7% | — | * | 4,521,539 | 4.1% | — | — | ||||||||
Fredric D. Rosen(7) | 863,690 | 1% | — | * | 678,243 | * | — | — | ||||||||
Rebecca L. Owen | — | — | — | — | ||||||||||||
All executive officers and directors as a group | 53,382,616 | 63.1% | 8,024,419 | 100% | 57,491,765 | 52.9% | 8,024,419 | 100% | ||||||||
Five Percent Holders |
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Wellington Management Group LLP(8) | 8,580,765 | 9.9% | — | * | ||||||||||||
JPMorgan Chase & Co(8) | 6,223,014 | 5.7% | — | — | ||||||||||||
Sapphire Holding S.à r.l.(9) | 46,382,531 | 54.8% | 8,024,419 | 100% | 51,478,740 | 46.3% | 8,024,419 | 100% |
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deemed to beneficially own the securities held by Sapphire through his ability to either vote or direct the vote of the securities or dispose or direct the disposition of the securities, either through his role at the TDR Capital II, contract, understanding or otherwise. Mr. Robertson disclaims beneficial ownership of such securities, except to the extent of his pecuniary interests therein.
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MATTERS RAISED AT THE ANNUAL MEETING NOT INCLUDED IN THIS STATEMENT
We do not know of any matters to be acted upon at the annual meeting other than those discussed in this proxy statement. If any other matter is properly presented, proxy holders will vote on the matter in their discretion.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 20192020 ANNUAL MEETING
A director nomination or proposal for action to be presented by any stockholder at the 20192020 annual meeting of stockholders will be acted on only:
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In each case, your proposal or nomination must be delivered in the manner and accompanied by the information required in our bylaws. You may request a copy of the bylaws by writing to WillScot Corporation c/o Corporate Secretary at 901 S. Bond Street, Suite 600, Baltimore, MDMaryland 21231. Please also fax a copy of your request to us at (410) 933-5940.
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SECTION 16(A) BENEFICAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC, and to furnish us with copies of such forms. Based on our review of the forms we have received, or written representations from reporting persons, we believe that, during 2017,2018, each of our executive officers and directors complied with all such filing requirements.requirements, except that (i) Messrs. Soultz, Boswell and Bacon each late filed a Form 4 in March 2018 due to technical issues and (ii) Mr. Rosen filed a Form 5 in February 2019 reporting, among other things, a transaction in which his wife tendered warrants for exchange into our common shares in December 2018 (a Form 4 reportable event).
On written request, we will provide, without charge to each record or beneficial holder of our common stock as of April 23, 2018,22, 2019, a copy of our Annual Report on Form 10-K for the year ended December 31, 2017,2018, as filed with the SEC, including the financial statements and schedules. Written requests should be directed to WillScot Corporation c/o Corporate Secretary at 901 S. Bond Street, Suite 600, Baltimore, MDMaryland 21231.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why am I receiving these proxy materials?
You are invited to attend the annual meeting and are entitled to vote on the items of business described in this proxy statement because you are a stockholder of our company. The proxy materials include the notice of annual meeting, this proxy statement for the annual meeting and our annual report. If you received a paper copy of these materials by mail or email, the proxy materials also include a proxy card or voting instruction card for the annual meeting.
When and where will the company hold the annual meeting?
The annual meeting will be held on Tuesday, June 19, 2018,18, 2019, at 9 a.m. Eastern Daylight Time, at our executive office located at 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231.
Who may vote at the annual meeting?
As of the record date April 23, 2018(April 22, 2019), there were 84,644,774108,693,209 shares of our Class A common stock and 8,024,419 shares of our Class B common stock outstanding (collectively, "common stock"). You may vote all of the shares of our common stock that you own at the close of business on the record date. You may cast one vote for each share that you own. Holders of Class A shares and Class B shares vote together as a single class on all matters submitted to a vote of our stockholders. We do not have cumulative voting rights for the election of directors.
What is a quorum?
A quorum must be present at the annual meeting in order to transact business. A quorum will be present if a majority of our shares of common stock entitled to vote are represented at the annual meeting, either in person or by proxy. If a quorum is not present, no business may be conducted at the annual meeting, in which case the annual meeting may
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be adjourned, without a vote of stockholders by the chairman of the annual meeting, until such time as a quorum is present.
Proxies received and marked as abstentions from voting on a proposal, and broker non-votes are counted for determining whether a quorum is present. A "broker non-vote" results when a trust, broker, bank, or other nominee or fiduciary that holds shares for another person has not received voting instructions from the owner of the shares and,
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under the applicable rules, does not have the discretionary authority to vote on a matter. If a properly executed proxy has not been returned, the holder is not present for quorum purposes.
What am I voting on, how many votes are required to elect directors and approve the other proposals, and how does the Board recommend that I vote?
Proposal No. 1: Elect as directors the two nominees named in the proxy statement | As there are two nominees for the two seats up for election, each nominee will be elected as a director if he or she receives the affirmative vote a plurality of the total votes cast "FOR" with respect to his election as a director at the annual meeting. Any abstentions or broker non-votes are not counted as votes cast either "FOR" or "WITHHELD" with respect to a director's election and will have no effect on the election of directors. | |
The Board recommends a vote FOR the election of each nominee as a director. | ||
Proposal No. 2: Ratify the appointment of EY as our independent registered public accounting firm for the year ending December 31, | Ratification of the appointment of EY as our independent registered public accounting firm for the year ending December 31, | |
The Board recommends a vote FOR the ratification of EY's appointment. |
How many votes do I have?
You have one vote on each proposal for each share of common stock that you owned as of the record date, April 23, 2018.22, 2019.
How do I vote my shares?
If you are a stockholder of record (i.e., you hold your shares in certificate form or through an account with our transfer agent, Continental Stock Transfer & Trust Company), then you can attend the annual meeting, complete a ballot and submit it. You may also vote by completing, signing and dating the proxy card that you received from us, and returning it in the accompanying pre-addressed envelope.IF YOU VOTE BY MAIL, YOUR PROXY CARD WILL BE VALID ONLY IF YOU COMPLETE, SIGN, DATE AND RETURN IT BEFORE THE ANNUAL MEETING DATE.
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If you are a beneficial owner of shares registered in the name of your brokerage firm, bank or other agent, then you should receive a notice containing voting instructions from that organization rather than our company. Simply follow the voting instructions in the notice to ensure that your vote is counted. To vote in person at the annual meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form. See "How do I attend the annual meeting in person?" below for more information on how to attend the annual meeting.
Even if you plan to attend the annual meeting, please authorize a proxy to vote your shares right away, by following the instructions on the proxy card that you received from us or the voting instruction card that you received from your
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broker, bank or other agent. By voting by proxy, you will be directing the persons designated as proxy holders as your proxies to vote your shares at the annual meeting in accordance with your instructions.
Will my shares be voted if I do not complete, sign, date and return my proxy card or voting instruction card, or vote by some other method?
If you are a registered "record" stockholder and you do not vote your shares by completing, signing, dating and returning a proxy card, your shares will not be voted unless you attend the annual meeting and vote in person. In addition, if you sign, date and return a proxy card, but do not complete voting instructions for a proposal, your shares will be voted with respect to such proposal by the named proxies in accordance with the Board's recommendations and in the discretion of the proxy holder on any other matter that may properly come before the annual meeting.
If your shares are held in a brokerage account or by a bank or other agent, you are considered the "beneficial owner" of shares held in "street name" and the proxy materials were forwarded to you by that organization. In order to vote your shares, you must follow the voting instructions provided to you by that organization. Brokerage firms, banks and other agents are required to request voting instructions for shares they hold on behalf of customers and others. As the beneficial owner, you have the right to direct the record holder how to vote and you are also invited to attend the annual meeting. We encourage you to provide instructions to your brokerage firm, bank or other agent on how to vote your shares. Because a beneficial owner is not the record stockholder, you may not vote the shares in person at the annual meeting unless you obtain a legal proxy from the record holder giving you the right to vote the shares at the meeting.
Even if you do not provide voting instructions on your voting instruction card, your shares may be voted if you hold shares through an account with a brokerage firm, bank or other agent. Brokerage firms have the authority under Nasdaq rules to vote shares for which their customers do not provide voting instructions on certain routine matters. Proposal No. 2, to ratify the appointment of EY as our independent registered public accounting firm for the year ending December 31, 2017,2018, is considered a routine matter for which brokers, banks and other agents may vote in the absence of specific instructions.
When a proposal is not considered routine and the broker, bank or other agent has not received voting instructions from the beneficial owner of the shares with respect to such proposal, such firm cannot vote the shares on that proposal. All proposals, other than Proposal No. 2, are non-routine proposals. Votes that cannot be cast by a broker, bank or other agent on non-routine matters are known as "broker non-votes."
How can I revoke my proxy and change my vote prior to the annual meeting?
You may revoke your proxy or change your vote at any time prior to the vote taken at the annual meeting.
You may revoke your proxy by (i) notifying our Corporate Secretary, at our office at 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231, in writing that you wish to revoke your proxy; (ii) submitting a proxy
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dated later than your original proxy; or (iii) attending the annual meeting and voting by ballot. Attending the annual meeting will not by itself revoke a proxy; you must submit a ballot and vote your shares at the annual meeting.
For shares you hold beneficially or in street name, you may change your vote by following the specific voting instructions provided to you by the record holder to change or revoke any instructions you have already provided, or, if you obtained a legal proxy from your brokerage firm, bank or other agent giving you the right to vote your shares, by attending the annual meeting and voting in person.
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Who pays the costs of the proxy solicitation?
We will pay the cost of soliciting proxies. Beyond these proxy materials, our directors and employees may solicit proxies in person, by telephone or by electronic communication. Directors and employees will not receive any additional compensation for soliciting proxies. We will also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I received more than one proxy card or voting instruction card?
If you receive more than one proxy card or voting instruction card, it means that you have multiple accounts with our transfer agent and/or brokerage firm, bank or other agent, or you may hold shares in different ways or in multiple names (such as through joint tenancy, trusts and custodial accounts). Please vote all of your shares.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the annual meeting. Final voting results will be provided in a current report on Form 8-K that we expect to file within four business days after the annual meeting.
How do I attend the annual meeting in person?
Attendance at the annual meeting is limited to stockholders as of the close of business on the record date or their authorized representatives. Seating will be limited. Instructions for admission to the annual meeting are set forth below.
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agent holding your shares); (iii) a signed authorization appointing such individual to be your authorized named representative at the meeting, which includes the individual's name, mailing address, telephone number and email address, and a description of the extent of his or her authority; and (iv) a legal proxy if you intend such representative to vote your shares at the meeting.
Cameras, sound or video recording equipment, cellular telephones, smartphones or other similar equipment, and electronic devices will not be allowed in the meeting room. Please allow ample time for check-in, and please note that large bags will not be allowed due to security reasons.
Stockholders who do not present the required information may not be admitted to the annual meeting. We reserve the right to deny entry to the annual meeting if any of these conditions are not satisfied.
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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. WillScot Corporation Annual Meeting of Stockholders June 19, 2018,18, 2019, at 9:00 A.M. 901 S. Bond Street, Suite 600 Baltimore, Maryland 21231 This Revocable Proxy is Solicited on behalf of The Board Of Directors MAIL — Mark, sign and date your proxy card and return it in the postage-paid envelope provided. FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED PROXY THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2. Please mark your votes like this FOR AGAINST ABSTAIN 1. Election of Directors (1) Mark S. Bartlett (2) Bradley L. Soultz2. Ratification of Ernest & Young LLP as our independent registered public FOR all Nominees listed to the left WITHHOLD AUTHORITY (1) Gerard E. Holthaus (2) Rebecca L.Owen to vote (except as marked totoaccounting firm for 2019. the contrary for all nominees listed to the left) 2. Ratification of Ernest & Young LLP FOR AGAINST ABSTAIN as our independent registered public accounting firm for 2018.YES NO Please indicate if you plan to attend this meeting. (Instruction: To withhold authority to vote for any individual nominee, strike a line through that nominee’s name in the list above) Please indicate if you plan to attend this meeting. YES NO CONTROL NUMBER Signature Signature, if held jointly Date , 2018.2019. Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. X
FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WILLSCOT CORPORATION I hereby appoint Bradley L. Bacon, Timothy D. Boswell, and Bradley L. Soultz, together and separately, as proxies to vote all shares of common stock that I have the power to vote at the annual stockholders meeting to be held on June 19, 2018,18, 2019, at 9 a.m., at the company’s office located at 901 S. Bond Street, Suite 600, Baltimore, Maryland 21231, and at any adjournment or postponement thereof. The proxies are authorized in their discretion to name others to take their place. I also acknowledge receiptreceive of the notice of annual meeting and proxy statement, dated April 30, 2018,2019, and the company’s 20172018 annual report to stockholders. This proxy, when properly completed and returned, will be voted in the manner directed herein by the stockholder named on the reverse side. IF NO DIRECTION IS MADE, IT WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS AND IN ACCORDANCE WITH THE JUDGMENT OF THE PROXIES NAMED HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. (Continued, and to be marked, dated and signed, on the other side)