WOOF Petco Health and Wellness Company Inc

Projected Financial Information

The Company provides public equity investors with full-fiscal-year financial guidance that includes revenue, net income, diluted earnings per diluted share and non-GAAP adjusted diluted earnings per share, which is updated from time to time during the relevant fiscal year based on actual operating results and changes in outlook. The Company does not make public long-term projections of future performance or earnings due to, among other reasons, the unpredictability of the underlying assumptions and estimates and the inherent unreliability of such projections. To assist the Board in its evaluation of a potential strategic transaction, management prepared preliminary financial projections through fiscal year 2021 (the “Preliminary Management Projections”), which it provided to Barclays solely for the purpose of enabling Barclays to prepare its preliminary financial analysis of the Company, which was discussed with the Board at its December 8, 2016 meeting. The Company informed Barclays that management was continuing its review of the Preliminary Management Projections, and expected to revise certain of the assumptions and estimates used in the Preliminary Management Projections during the course of its continuing review. The Preliminary Management Projections were not provided to Mars.

Between December 6, 2016 and December 30, 2016, management refined the assumptions and estimates used in the preparation of its financial projections, as further described below. On December 16, 2016, management provided Barclays with updated financial projections, which were revised from the Preliminary Management Projections, for the purpose of enabling Barclays to prepare its updated preliminary financial analysis of the Company, which was discussed with the Board at its December 27, 2016 meeting. These revised financial projections were also made available to Mars and its advisors on December 16, 2016. On December 30, 2016, the Company provided to Barclays the Final Management Projections, which did not materially differ from the December 16, 2016 projections, and instructed Barclays to use the Final Management Projections in connection with the preparation of its fairness opinion to the Board. The Final Management Projections were also made available to Mars and the Board. While certain underlying components comprising the definition of Unlevered Free Cash Flow were provided to Mars, the Company’s arithmetical calculation of Unlevered Free Cash Flow was not provided to Mars.

The Management Projections, which consist of the Preliminary Management Projections and the Final Management Projections, were not prepared with a view to public disclosure and are included in this proxy statement only because such information was made available as described above. The Management Projections were not prepared with a view to compliance with generally accepted accounting principles as applied in the United States (“GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, KPMG LLP, our independent registered public accounting firm, has not examined, compiled or performed any procedures with respect the Management Projections. Accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto. The KPMG LLP report incorporated by reference in this proxy statement relates to the Company’s historical financial information. It does not extend to the Management Projections and should not be read to do so. The Management Projections included in this proxy statement have been prepared by, and are the responsibility of, our management. The Management Projections were prepared solely for internal use of the Company and are subjective in many respects.

Although a summary of the Preliminary Management Projections and the Final Management Projections is presented with numerical specificity, the Management Projections reflect estimates made by our management as to future events that our management believed were reasonable (subject, in the case of the Preliminary Management Projections, to the ongoing review by management of certain of the assumptions and estimates used therein), at the time they were prepared and numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other important factors that may affect actual results and cause the Management Projections not to be achieved (see the section entitled “ Cautionary Statement Concerning Forward-Looking Statements ” beginning on page 20). In addition, the Management Projections do not take into account any circumstances or events occurring after the date that they were prepared and do not give

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effect to the merger. As a result, there can be no assurance that the Management Projections will or would be realized, and actual results may be materially better or worse than those contained in the Management Projections.

The inclusion of this information should not be regarded as an indication that the Board, the Company or any of its affiliates or their respective directors, officers, employees or advisors or any other recipient of this information considered, or now considers, the Management Projections to be material information of the Company or predictive of actual future results nor should it be construed as financial guidance, and the Management Projections should not be relied upon as such. The summary of the Management Projections is not included in this proxy statement in order to induce any stockholder to vote in favor of the proposal to approve the adoption of the merger agreement or any of the other proposals to be voted on at the special meeting or to influence any stockholder to make any investment decision with respect to the merger or otherwise, including whether or not to seek appraisal rights with respect to shares of our common stock.

The Management Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company contained in our public filings with the SEC. Our management reviewed the Management Projections with the Board, which only considered the Final Management Projections in connection with its evaluation and approval of the merger agreement and the merger because it had been advised by management that the Final Management Projections reflected management’s best available estimates and judgment regarding the Company’s future financial performance. In preparing its financial analyses and opinion summarized in the section entitled “— Opinion of the Financial Advisor to the Company ” beginning on page 43, Barclays assumed that the Final Management Projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the Company’s management regarding the Company’s future financial performance and that the Company would perform in accordance with such Final Management Projections. The Board did not rely upon the Preliminary Management Projections in its evaluation and approval of the merger agreement and the merger at its meeting on January 7, 2017, and Barclays did not rely upon any portion of the Preliminary Management Projections in arriving at its opinion to the Board.

The Management Projections constitute forward-looking statements. For information on factors that may cause the Company’s future results to materially vary, see the section entitled “ Cautionary Statement Concerning Forward-Looking Statements ” beginning on page 20.

Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Management Projections, as applicable, to reflect circumstances existing after the date when the Company’s management prepared the Management Projections, as applicable, or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Management Projections are shown to be in error.

In light of the foregoing factors and the uncertainties inherent in the Management Projections, stockholders are cautioned not to rely on the Management Projections.

Furthermore, as noted below, certain of the measures included in the Management Projections are non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies.

The principle differences in the assumptions and estimates underlying the Preliminary Management Projections and the Final Management Projections are as follows:

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The following tables reflect selected metrics reflected in the Preliminary Management Projections and the Final Management Projections:

Table 1: Preliminary Management Projections

Table 2: Final Management Projections

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Interests of the Company’s Directors and Executive Officers in the Merger

In considering the unanimous recommendations of the Board that stockholders of the Company vote “ FOR ” the proposal to approve the adoption of the merger agreement and the transactions contemplated by the merger agreement, including, without limitation, the merger, stockholders should be aware that the Company’s directors and executive officers have interests in the merger that are different from, and/or in addition to, the interests of the stockholders of the Company generally. The Board was aware of and considered these differing interests, among other matters, in evaluating and negotiating the merger agreement and in unanimously recommending that the stockholders of the Company approve the adoption of the merger agreement and the transactions contemplated by the merger agreement, including, without limitation, the merger.

Treatment of Equity and Equity-Based Awards

The Company’s executive officers and directors hold various equity awards, as further described below.

Company Options . As identified in the table below, certain of the Company’s executive officers hold Company Options. At the effective time, each Company Option that is outstanding and unexercised (whether vested or unvested) will be cancelled and converted into the right to receive an amount, in cash, equal to (i) the total number of shares of the Company’s common stock subject to such Company Option multiplied by (ii) the excess, if any, of $93.00 over the exercise price per share of the Company’s common stock set forth in such Company Option.

Restricted Stock Units . As identified in the table below, certain of the Company’s executive officers hold RSUs. At the effective time, each RSU award that is outstanding immediately prior to the effective time will fully vest as to the number of shares of common stock issuable pursuant to such RSU (including, with respect to performance-based RSUs, upon attainment of the target level of performance applicable to such RSU) and become free of any vesting, forfeiture or other restriction, and shall entitle the holder to receive an amount, in cash, equal to (i) the total number of shares of the Company’s common stock subject to such RSU (assuming attainment of the target level of performance applicable to such RSU) multiplied by (ii) $93.00.

Restricted Stock . As identified in the table below, the Company’s directors hold Restricted Stock. At the effective time, each share of Restricted Stock that is outstanding immediately prior to the effective time and held by our directors will vest and be free of any vesting, forfeiture or other restrictions, and will entitle the director holding such share of Restricted Stock to receive, in cash, $93.00.

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The table below sets forth the number of Company Options, Restricted Stock and RSUs held by each of the Company’s executive officers and directors as of February 10, 2017, and the value that each executive officer and director can expect to receive for such awards as of the closing date, assuming they comply with any applicable service requirement and based on the per share merger consideration equal to $93.00.

Employment and Severance Agreements

The Company is party to employment or severance agreements with (i) Robert L. Antin, the Company’s Chairman, Chief Executive Officer and President, (ii) Arthur J. Antin, the Company’s Chief Operating Officer and Senior Vice President, (iii) Tomas W. Fuller, the Company’s Chief Financial Officer, Vice President and Secretary and (iv) Neil Tauber, the Company’s Senior Vice President of Development, pursuant to which upon the consummation of the merger (which constitutes a “change in control” under such agreements):

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The employment agreements of Messrs. R. Antin, A. Antin and Fuller and the severance agreement of Mr. Tauber also provide that, if any of the payments due to them thereunder qualify as “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), such executive is entitled to an additional payment to cover the tax consequences associated with excess parachute payments. However, based on the expected payments to be received by Messrs. R. Antin, A. Antin, Fuller and Tauber in connection with the merger, it is not expected that any of them will receive “excess parachute payments” and therefore none of them will be entitled to any such gross-up payment in respect of applicable excise tax.

For a calculation of the change in control payments or severance amounts to be paid to, and the benefits and perquisites expected to be received by, the named executive officers under the employment and severance agreements, please see the “ Golden Parachute Compensation ” table beginning on page 57.

Supplemental Executive Retirement Program (“SERP”) Agreements

The Company has entered into SERP agreements with each of Messrs. R. Antin, A. Antin, Fuller and Tauber, pursuant to which, in the absence of a change of control, each of the executives will receive 144 monthly payments in an amount equal to 1/12 ^th of his “accrued benefit percentage,” as defined in the SERP agreement, multiplied by his “final salary.” Final salary is the greater of (i) the executive’s annual base compensation paid in cash immediately prior to the attainment of his normal retirement age, as defined in the SERP agreement or (ii) the average of such executive’s annual base compensation paid in cash for the three highest years during the ten-year period ending on the December 31 ^st immediately preceding the attainment of his normal retirement age, as defined in the SERP agreement. Each of Messrs. R. Antin, A. Antin and Tauber has commenced receiving his benefits under his SERP agreement. Mr. Fuller will be entitled to receive his benefits under his SERP agreement on his 62 ^nd birthday. However, upon the consummation of the merger, which constitutes a “change in control” under the SERP agreements, each executive officer will be paid a lump sum equal to the actuarial equivalent of any remaining monthly benefits owed to him as of the date of such change in control. For a calculation of the amounts to be paid to the named executive officers under the SERP agreements, please see the “ Golden Parachute Compensation ” table beginning on page 57.

Post-Retirement Medical Benefits Coverage

The Company has entered into post-retirement medical benefits coverage agreements, as amended, with each of Messrs. R. Antin, A. Antin, Fuller and Tauber, pursuant to which such executive officers will be entitled to receive company-paid medical benefits coverage commencing upon any termination of employment. For each of Messrs. R. Antin, A. Antin, Fuller and Tauber, such coverage expires on the later of (i) his death, (ii) the death of his spouse or (iii) the end of the month in which each of his children has had a 30 ^th birthday. In addition, the post-retirement medical benefits coverage agreements provide (a) for dependent care benefits up to last day of the month that includes the 30 ^th birthday and (b) the right to continue to participate in the Company’s employee discount program for pet care for a period of seven years following termination of employment, in each case, on the same terms as provided from time to time by the Company to its executive officers. If the continuation of medical benefits coverage is subject to taxation under Section 409A of the Code as a result of the failure of the post-retirement medical benefits coverage agreement to comply with Section 409A of the Code, the Company will make a payment to the applicable executive officer in an amount equal to all federal, state and local taxes incurred by him as a result thereof. However, at this time, the Company does not expect any executive officer to become entitled to any tax gross-up payment in accordance with the preceding sentence. For a calculation of benefits expected to be received by the named executive officers under the post-retirement medical benefits coverage agreements, please see the Pension/NQDC column in the “ Golden Parachute Compensation ” table beginning on page 57.

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Fees Earned by Akin Gump Strauss Hauer & Feld LLP

Mr. Frank Reddick, a director of the Company, is a partner in the law firm of Akin Gump. Akin Gump has been retained by the Company for the proposed transaction. The Company expects to pay Akin Gump approximately $4.0 million in connection with services related to the proposed transaction, none of which is contingent on the consummation of the proposed transaction. Akin Gump also provided legal services to the Company during 2016, 2015 and 2014 that were unrelated to the proposed transaction, for which the Company paid Akin approximately $2.4 million, $1.5 million and $0.9 million in 2016, 2015 and 2014, respectively.

Insurance and Indemnification of Directors and Executive Officers

The Company has entered into indemnification agreements with each of our directors and certain of our executive officers that require us, among other things, to indemnify the directors and executive officers against certain liabilities that may arise by reason of their status or service as directors or officers. In addition, pursuant to the terms of the merger agreement, the Company’s directors and executive officers will be entitled to certain ongoing indemnification coverage under directors’ and officers’ liability insurance policies from the Company, as the surviving corporation. This indemnification and insurance coverage is further described in the section entitled “ The Merger Agreement—Other Covenants and Agreements—Indemnification and Insurance ” beginning on page 73.

Positions with Mars Following the Merger

The merger agreement provides that the officers of the Company prior to the effective time will be the officers of the Company after the merger. Specifically, following the merger, Mr. R. Antin is expected to continue to serve as the Company’s chief executive officer and, together with the rest of the Company’s management team (including the other named executive officers), is expected to continue to lead the Company. As of the date of this proxy statement, none of our executive officers has entered into any new agreement, arrangement or understanding with Acquiror or any of its affiliates regarding the terms and conditions of compensation, incentive pay or employment with the Company after the merger. Although no agreements have been entered into at this time with any of our executive officers, we have been informed that Acquiror and its affiliates plan to initiate discussions with members of our existing management team, including the named executive officers, regarding the terms of their employment with the Company after the merger. Prior to completion of the merger, members of our existing management team may enter into new agreements and/or amendments to existing employment or severance agreements with Acquiror or Merger Sub regarding their employment with the Company after the merger.

Quantification of Payments and Benefits to the Named Executive Officers

The table below sets forth the amount of payments and benefits that constitute “golden parachute compensation” that each of the named executive officers will receive in connection with the merger, assuming that the merger is consummated on June 30, 2017. The term “golden parachute” generally refers to compensation arrangements with named executive officers concerning any type of compensation that is based on or relates to an acquisition, merger or similar transaction. The amounts below are determined using a price per share of common stock of $93.00 and are based on assumptions that may or may not actually occur or be accurate on the relevant date, including the assumptions described in the footnotes to the table. Certain of the amounts payable may vary

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depending on the date on which the merger is actually completed. As a result, the actual amounts to be received by a named executive officer may differ from the amounts set forth below.

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Certain U.S. Federal Income Tax Considerations relating to the Merger

The following discussion summarizes the U.S. federal income tax considerations generally applicable to U.S. holders (as defined below) of common stock whose shares are exchanged for cash pursuant to the merger. This discussion does not address U.S. federal income tax consequences with respect to holders other than U.S. holders. This discussion is based on the provisions of the Code, applicable U.S. Treasury regulations promulgated thereunder, judicial opinions, and administrative rulings and published positions of the Internal Revenue Service (“IRS”), each as in effect as of the date hereof. These authorities are subject to change or differing interpretations, possibly on a retroactive basis, and any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion is for general information purposes only and does not purport to be a complete analysis of all potential tax consequences. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax consequences arising under state, local or non-U.S. tax laws or U.S. federal tax laws other than those pertaining to the U.S. federal income tax (such as U.S. federal estate or gift tax). This discussion is not binding on the IRS or the courts and, therefore, could be subject to challenge, which could be sustained. No ruling is intended to be sought from the IRS with respect to the merger.

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For purposes of this discussion, the term “U.S. holder” means a beneficial owner of common stock that is for U.S. federal income tax purposes:

This summary of U.S. federal income tax considerations is for general information purposes only and is not tax advice. Holders of common stock are urged to consult their tax advisors to determine the particular tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax, the unearned income Medicare contribution tax, and any other U.S. federal, state, local, non-U.S. or other tax laws.

This discussion applies only to U.S. holders of shares of common stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be relevant to a U.S. holder in light of its particular circumstances, or that may apply to U.S. holders subject to special treatment under U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, holders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, governmental agencies or instrumentalities, retirement plans, banks and certain other financial institutions, broker-dealers, mutual funds, certain expatriates, partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes), S corporations or other pass-through entities and their owners, real estate investment trusts, regulated investment companies, U.S. holders who hold shares of common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction, U.S. holders who hold (directly, indirectly or constructively) 5% or more (by vote or value) of the Company’s issued and outstanding shares of common stock, U.S. holders who will hold (directly, indirectly or constructively) an equity interest in the surviving corporation immediately after the merger, and U.S. holders who acquired their shares of common stock through the exercise of employee stock options or other compensation arrangements). This discussion also does not address the U.S. federal income tax consequences to holders of shares of common stock who exercise appraisal rights in connection with the merger under the DGCL.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. If you are, for U.S. federal income tax purposes, a partner of a partnership holding shares of common stock, you should consult your tax advisor.

Consequences to U.S. Holders

The receipt of cash by U.S. holders in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of common stock pursuant to the merger will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received pursuant to the merger and (2) the U.S. holder’s adjusted tax basis in its shares of common stock sold or exchanged therefor.

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Any such gain or loss will be long-term capital gain or loss if a U.S. holder’s holding period in the shares of common stock surrendered in the merger is greater than one year as of the date of the merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of common stock.

Information Reporting

Payments made in exchange for shares of common stock pursuant to the merger will be reported to holders of common stock and to the IRS to the extent required by the Code and applicable U.S. Treasury regulations promulgated thereunder. Under the Code, a U.S. holder (other than a corporation or other exempt recipient) may be subject, under certain circumstances, to information reporting on the cash received pursuant to the merger.

THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX CONSEQUENCES RELEVANT TO COMPANY STOCKHOLDERS. THE TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF EACH STOCKHOLDER. YOU SHOULD CONSULT YOUR TAX ADVISOR CONCERNING THE U.S. FEDERAL, STATE, LOCAL, NON-U.S. AND/OR OTHER TAX CONSEQUENCES OF THE MERGER TO YOU.

Regulatory Approvals

Under the merger agreement, the parties agreed to make all necessary filings under the HSR Act and Canadian Competition Act no later than February 6, 2017, unless otherwise mutually agreed by the parties.

Approval in the United States

Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until required information and materials are furnished to the Antitrust Division and the FTC and statutory waiting period requirements have been satisfied. On February 6, 2017, both the Company and Mars filed their respective Notification and Report Forms with the Antitrust Division and the FTC. The waiting period under the HSR Act is expected to expire on March 8, 2017 unless earlier terminated or extended by the issuance of a Second Request to the parties by the FTC or the Antitrust Division prior to that time. If the FTC or the Antitrust Division issues a Second Request, the waiting period with respect to the merger will be extended for an additional period of 30 calendar days following both parties’ substantial compliance with that request unless earlier terminated by the FTC or the Antitrust Division. After that time, the waiting period may be extended only by court order or with the consent of the parties. At any time before or after the consummation of any such transactions, the FTC or the Antitrust Division could take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to enjoin the merger.

Canadian Competition Act

Under the Canadian Competition Act, the merger cannot be consummated until one of the following has occurred: (a) the issuance of an advance ruling certificate as defined in Section 102 of the Canadian Competition Act; (b) the Company and Mars have given the notice required under the Canadian Competition Act, and the applicable waiting period has expired or has been terminated; or (c) the obligation to give the requisite notice has been waived. In the case of (c), the Company and Mars must also have received a no-action letter with respect to the merger.

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On January 23, 2017, Mars filed a request for an advance ruling certificate or no-action letter with the Canadian Commissioner of Competition.

State and Local Approvals

In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. Although neither the Company nor Mars believes that the merger will violate federal antitrust laws, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

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THE MERGER AGREEMENT

Below is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary does not purport to be complete, may not contain all of the information about the merger agreement that is important to you and is subject to, and qualified in its entirety by, the full text of the merger agreement. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

The following summary of the merger agreement, and the copy of the merger agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to provide any factual information about the Company or modify or supplement any factual disclosures about the Company in its public reports filed with the SEC. In particular, the merger agreement and the related summary are not intended to be disclosures regarding any facts and circumstances relating to the Company. The merger agreement contains representations and warranties by, and covenants of, the Company, Acquiror and Merger Sub (and solely in connection with providing a guaranty of Acquiror’s and Merger Sub’s obligations under the merger agreement, Mars) that were made only for purposes of the merger agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being modified and qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Investors are not third-party beneficiaries under the merger agreement. Accordingly, you should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Acquiror, Merger Sub or Mars.

Additional information about the Company may be found elsewhere in this proxy statement and the Company’s other public filings. See the section of this proxy statement entitled “ Where You Can Find Additional Information ” beginning on page 95.

Structure of the Merger; Certificate of Incorporation, Bylaws and Directors and Officers of the Surviving Corporation

At the effective time, Merger Sub will merge with and into the Company and the separate corporate existence of Merger Sub will cease. The Company will be the surviving corporation in the merger and will continue its corporate existence as a wholly owned subsidiary of Acquiror. At the effective time, all of the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the surviving corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the surviving corporation, all as provided under the DGCL. The certificate of incorporation and bylaws of Merger Sub that are in effect immediately prior to the effective time (which will include provisions with respect to exculpation, indemnification and advancement of expenses that are no less favorable to any person who is or prior to the effective time becomes, or has been at any time prior to the date of the merger agreement, a director or officer of the Company or any of its subsidiaries or any of their predecessors (in each case, when acting in such capacity or as a fiduciary of any Company benefit plan), which we collectively refer to as the “Company indemnified parties,” with respect to actions or omissions occurring at or prior to the effective time than those contained in the Company’s current certificate of incorporation and bylaws) will become the certificate of

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incorporation and bylaws of the surviving corporation until thereafter amended in accordance with its terms and the DGCL, although the certificate of incorporation and bylaws will be amended to reflect the name of the surviving corporation as VCA Inc.

Subject to applicable law, the directors of Merger Sub immediately prior to the effective time shall be the initial directors of the surviving corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. The officers of the Company immediately prior to the effective time shall be the initial officers of the surviving corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

When the Merger Becomes Effective; Closing and Effective Time

The closing of the merger will take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York at 10:00 a.m., New York City time, on the fifth business day (or other date agreed to by the parties) after the satisfaction or, if permissible, waiver of the last of the closing conditions set forth in the merger agreement (other than any such conditions that by their nature are to be satisfied by action taken at or immediately prior to the closing of the merger, but subject to the satisfaction or waiver of such conditions at the closing of the merger), unless another time, date or place is agreed to in writing by the Company and Acquiror.

On the closing date, the parties will cause a certificate of merger to be duly executed and filed with the Secretary of State of the State of Delaware as provided under the DGCL. The merger shall become effective at such time as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or on such later date and time as shall be agreed to by the Company and Acquiror and specified in the certificate of merger.

Effect of the Merger on the Company’s Common Stock

As of the effective time, each share of the Company’s common stock issued and outstanding immediately prior to the effective time (other than (a) shares owned (or held in treasury) by the Company, (b) shares owned by any of the Company’s subsidiaries, Mars, Acquiror or Merger Sub (or any other subsidiary of Mars) and (c) Dissenting Shares) shall be cancelled and automatically converted into the right to receive $93.00 in cash (which we refer to herein as the “merger consideration”), without interest, and subject to any applicable withholding taxes.

As of the effective time, each share of the Company’s common stock owned or held in treasury by the Company immediately prior to the effective time will be cancelled without any conversion thereof and no consideration will be delivered with respect thereto.

As of the effective time, each share of the Company’s common stock that is owned by any direct or indirect subsidiary of the Company or by Mars or any of its subsidiaries (including Acquiror and its subsidiaries) immediately prior to the effective time will remain outstanding and will not be converted into the right to receive the merger consideration.

Shares of the Company’s common stock issued and outstanding immediately prior to the effective time with respect to which a Company stockholder did not vote in favor of the adoption of the merger agreement (or consent thereto in writing) and is entitled to demand and has properly made a demand for appraisal and who does not thereafter fail to perfect, effectively withdraw, or otherwise lose such stockholder’s right to appraisal in accordance with Section 262 of the DGCL, will not be converted into the right to receive the merger consideration, but instead at the effective time will be converted into the right to receive payment of such amounts as are payable in accordance with Section 262 of the DGCL.

As of the effective time, each issued and outstanding share of Merger Sub common stock will be converted into and become one fully paid and nonassessable share of common stock of the surviving corporation.

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Withholding Rights

Each of the Company, Acquiror, Merger Sub, the surviving corporation and the paying agent for the merger consideration will be entitled to deduct and withhold from the amounts that would otherwise be payable under the terms of the merger agreement any amounts that may be required to be deducted or withheld with respect to the making of such payment under any applicable tax law, and any amounts so deducted or withheld that, if required, are paid over to the applicable governmental entity will be treated as having been paid to the person in respect of which such deduction or withholding was made.

Treatment of Company Equity Awards

The merger agreement provides that, at the effective time:

Payment for Common Stock and Company Equity Awards in the Merger

Prior to the effective time, Acquiror will appoint a paying agent reasonably acceptable to the Company. Acquiror will deposit with, or will make or cause to be made available to, the paying agent cash sufficient to pay the aggregate merger consideration payable pursuant to the merger agreement. Promptly after the effective time, Acquiror will cause the paying agent to send, to each record holder of shares of the Company’s common stock that were converted into the right to receive the merger consideration a letter of transmittal and instructions for use in such payment.

Upon surrender of a certificate (or effective affidavit of loss in lieu thereof) or transfer of book-entry share, as applicable, to the paying agent together with the letter of transmittal, duly completed and validly executed, the holder of such certificate or book-entry share will be entitled to receive the merger consideration (less applicable

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withholding taxes) in exchange for each share of the Company’s common stock formerly represented by the certificate or book-entry share. No interest will be paid or will accrue on the cash payable upon the surrender or transfer of such certificate or book-entry share.

Other than with respect to shares of Restricted Stock that were granted to employees of the Company or its subsidiaries in 2016 and that do not vest by their terms on or prior to December 31, 2017 or, if later, the effective time, which will be paid on the first anniversary of the closing date, Acquiror will cause the payments required to be made in respect of the Company equity awards (as described under “— Treatment of Company Equity Awards ” beginning on page 64) to be made no later than the first payroll date that is at least three business days after the effective time, without interest and less applicable withholding taxes.

Representations and Warranties

The merger agreement contains representations and warranties of the Company, Acquiror, Merger Sub and, solely in connection with providing a guaranty of Acquiror’s and Merger Sub’s obligations under the merger agreement, Mars.

Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a “Company material adverse effect” qualification with respect to the Company or an “Acquiror material adverse effect” qualification with respect to Acquiror and Merger Sub. For purposes of the merger agreement, a “Company material adverse effect” with respect to the Company means any fact, change, circumstance, event, occurrence, condition, development or combination of the foregoing (i) that is materially adverse to the business, properties, results of operations or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole or (ii) that prevents, materially delays or materially impairs the ability of the Company to consummate the merger or the other transactions contemplated by the merger agreement; provided , however , that, in the case of (i), “Company material adverse effect” shall not be deemed to include the impact of:

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However, with respect to the matters described in (iii), (iv), (ix) and (x) above, such impact will be taken into account to the extent that the effects of the change are disproportionately adverse to the business, properties, results of operations or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, as compared to other companies in the veterinary industry.

For the purpose of the merger agreement, an “Acquiror material adverse effect” with respect to Acquiror and Merger Sub means any fact, change, circumstance, event, occurrence, condition, development or combination of the foregoing that prevents, materially delays or materially impairs the ability of Acquiror or Merger Sub to consummate the merger or the other transactions contemplated by the merger agreement.

Subject to certain exceptions in the merger agreement, the confidential disclosure schedules delivered by the Company to Acquiror in connection with the merger agreement (which we refer to herein as the “Company disclosure schedules”) and certain of the Company’s public filings with the SEC filed after January 1, 2015 and made available prior to January 6, 2017, the merger agreement contains representations and warranties of the Company as to, among other things:

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Subject to certain exceptions in the merger agreement, the merger agreement also contains representations and warranties of Acquiror and Merger Sub as to, among other things:

Conduct of Business Pending the Merger

The merger agreement provides that, during the period commencing on the signing of the merger agreement and ending on the earlier of the termination of the merger agreement in accordance with its terms and the effective time, except (i) as required by applicable law, (ii) as expressly required by the merger agreement, (iii) as set forth in the Company disclosure schedules or (iv) with the prior written consent of Acquiror (which shall not be unreasonably withheld, conditioned or delayed), the Company will, and will cause each of its subsidiaries and each entity (other than any subsidiary of the Company) the primary purpose of which is to provide professional veterinary services and that is consolidated by the Company in its financial statements (which we refer to herein as “practice entities”) to, (x) conduct its business in the ordinary course consistent with past practice, (y) use commercially reasonable efforts to maintain and preserve substantially intact its business organization, keep available the services of key employees and maintain satisfactory relationships and goodwill with the practice entities and any governmental entity that has jurisdiction over the Company, its subsidiaries or the practice entities and (z) prepare and file any required regulatory filings on a timely basis consistent with past practice.

Further, the merger agreement also provides that, from the signing date of the merger agreement through the earlier of the termination of the merger agreement in accordance with its terms and the effective time, except (i) as required by applicable law, (ii) as expressly required by the merger agreement, (iii) as set forth in the Company disclosure schedules or (iv) with the prior written consent of Acquiror (which consent shall not be unreasonably withheld, conditioned or delayed; provided , that Acquiror shall be permitted, in its sole discretion, to withhold, condition or delay its consent with respect to the matters described in (xi) below), the Company will

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not, and will cause its subsidiaries not to, and will not direct any practice entity to or consent to any request from a practice entity to, among other things:

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In addition to the foregoing, prior to the closing of the merger, the Company and its subsidiaries are prohibited from, and the Company will not direct any practice entity or consent to any request from any practice entity in connection with the, acquiring or making an offer or commitment to acquire any person or business for consideration that is (x) for a single acquisition or series of related acquisitions in excess of $50,000,000 and (y) together with all such transactions consummated or agreed to after the date of the merger agreement (other than certain specified acquisitions included in the Company disclosure schedules) in excess of $260,000,000 in the aggregate.

Other Covenants and Agreements

Non-Solicitation; Takeover Proposals

Except as expressly permitted by the merger agreement, the Company has agreed that it shall, and shall cause each of its subsidiaries to, and shall use its reasonable best efforts to cause its and its subsidiaries’ representatives (i) to immediately cease and terminate any ongoing solicitation, encouragement, discussions or negotiations with any person (other than Mars and its subsidiaries including Acquiror) with respect to a Company takeover proposal (as defined below), and (ii) not to, directly or indirectly:

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Under the merger agreement, a “Company takeover proposal” means any proposal or offer from any person (other than Mars and its subsidiaries) with respect to, or that would reasonably be expected to lead to, in a single transaction or a series of related transactions, (i) a merger, consolidation, business combination, recapitalization, binding share exchange, liquidation, dissolution, joint venture or other similar transaction involving the Company or any of its subsidiaries, (ii) any acquisition of 20% or more of the Company’s outstanding common stock (or securities representing 20% or more of the voting power of the Company), (iii) any acquisition of assets or businesses of the Company or its subsidiaries representing 20% or more of the consolidated assets, revenues or net income of the Company, (iv) any tender offer or exchange offer that if consummated would result in any person beneficially owning 20% or more of the Company’s outstanding common stock (or securities representing 20% or more of the voting power of the Company) or (v) any combination of the foregoing types of transactions if the sum of the percentage of consolidated assets, consolidated revenues or earnings and the Company’s common stock (or voting power of securities of the Company other than common stock) involved is 20% or more.

Receipt of Company Takeover Proposal

If (i) prior to the receipt of the Company stockholder approval (as defined in the section entitled “ Summary—No Solicitation ” beginning on page 8), the Company or any of its representatives receives a bona fide, unsolicited written Company takeover proposal that did not result from a breach of the non-solicitation provisions of the merger agreement and (ii) the Board determines, in good faith, after consultation with its outside financial advisor and outside legal counsel, that such Company takeover proposal constitutes or could reasonably be expected to result in a Company superior proposal (as described below), then the Company and its representatives may, prior to the time the Company stockholder approval is obtained, but not after:

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Under the merger agreement, a “Company superior proposal” means a bona fide , unsolicited written Company takeover proposal (i) that if consummated would result in a third party (or the stockholders of such third party) acquiring, directly or indirectly, more than 50% of the Company’s outstanding common stock or more than 50% of the assets of the Company and its subsidiaries, taken as a whole, and (ii) that the Board determines in good faith (in accordance with the merger agreement), after consultation with its outside financial advisor and outside legal counsel, taking into account the timing and likelihood of consummation relative to the transactions contemplated by the merger agreement, and after giving effect to any changes to the merger agreement proposed by Acquiror in response to such Company takeover proposal (in accordance with the merger agreement) and all other financial, legal, regulatory, tax and other aspects of such Company takeover proposal, including all conditions contained therein and the person making such Company takeover proposal, as the Board deems relevant, is more favorable from a financial standpoint to the stockholders of the Company than the merger.

Notice of Company Takeover Proposal

Under the terms of the merger agreement, the Company must (i) promptly (and in any event within 24 hours) advise Acquiror of receipt of any Company takeover proposal or a request for information relating to the Company or its subsidiaries that constitutes or contemplates a Company takeover proposal, including the identity of the person making such Company takeover proposal and a description of the material terms and conditions thereof and (ii) keep Acquiror reasonably informed on a reasonably current basis as to the status of the Company takeover proposal including any developments, discussions or negotiations and a description of any changes to the material terms and conditions in respect thereof.

The Company Recommendation; Adverse Recommendation Change; Fiduciary Exception

As described above, and subject to the provisions described below, the Board has unanimously made the recommendation that the Company stockholders vote “ FOR ” the proposal to approve the adoption of the merger agreement and the transactions contemplated by the merger agreement, including, without limitation, the merger, which unanimous recommendation we refer to as the “Company recommendation.” The merger agreement provides that the Board will not effect an “adverse recommendation change” (as described below) except as described below.

Under the merger agreement, generally, the Board may not: (i) (A) fail to include the Company recommendation in this proxy statement; (B) change, qualify, withhold, withdraw or modify, or authorize or publicly propose to change, qualify, withhold, withdraw or modify, in a manner adverse to Acquiror, the Company recommendation; or (C) adopt, approve or recommend to the Company stockholders, or resolve to or publicly propose or announce its intention to adopt, approve or recommend to the Company stockholders, a Company takeover proposal (any action described in (i) being referred to as an “adverse recommendation change”) or (ii) authorize, cause or permit the Company or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, agreement (including an acquisition agreement, merger agreement, joint venture agreement or other agreement), commitment or agreement in principle with respect to any such Company takeover proposal (other than a confidentiality agreement entered into in accordance with the merger agreement).

The Board may, prior to receipt of Company stockholder approval:

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Prior to making such adverse recommendation change, effecting any such termination or making an intervening event recommendation change, (i) the Company must give Acquiror at least five business days’ prior notice of its intention to do so, the reasons therefor, and certain information related thereto, (ii) the Company must negotiate in good faith with Acquiror to enable Acquiror to propose revisions to the terms of the merger agreement, and (iii) the Board must consider in good faith any revisions to the terms of the merger agreement proposed in writing by Acquiror (and not revoked) and determine in good faith after consultation with its outside financial advisor and outside legal counsel, either that the Company superior proposal continues to constitute a Company superior proposal if the revisions proposed by Acquiror were to be given effect, or that the failure to make an intervening event recommendation change would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law, as the case may be. Further, in the event of any change to the financial terms or other material terms of a Company superior proposal, the Company must give a new notice to Acquiror consistent with that described in clause (i) above and a new notice period under clause (iii) above will commence, except that the five business day notice period will instead be the longer of three business days and the period remaining under the original notice period immediately prior to the delivery of such additional notice. The Company is not permitted to terminate the merger agreement under these provisions with respect to a Company superior proposal unless the Company pays Acquiror the termination fee (which is described in more detail in the section of this proxy statement entitled “ — Termination Fee ” beginning on page 78) prior to or concurrently with such termination.

Access to Information

Subject to certain exceptions and limitations, the Company will, and will cause its subsidiaries to (i) afford Acquiror and its representatives reasonable access during normal business hours, to the Company’s and its subsidiaries’ personnel, properties, contracts, commitments, books and records (including tax returns) and (ii) make available to Acquiror such other available information concerning its business, properties and personnel as Acquiror may reasonably request and shall instruct the Company’s (and its subsidiaries’) independent accountants to provide access to their work papers and such other information (including tax returns) as Acquiror may reasonably request (other than with respect to any person or information if so doing, in the Company’s and its outside counsel’s reasonable judgment, would violate any law or jeopardize the attorney-client privilege; provided , that the Company informs Acquiror of the general nature of such information and reasonably cooperates with Acquiror to share the information in such a manner that would not result in the violation of law

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or loss or waiver of such privilege). Any access or investigation must be conducted so as not to interfere unreasonably with the business and operations of the Company or any of its subsidiaries.

No investigation by Acquiror or its representatives will affect or be deemed to modify or waive the representations and warranties of the Company set forth in the merger agreement.

Indemnification and Insurance

All rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time, and any existing rights to advancement of expenses in favor of the Company indemnified parties, as provided in the organizational documents of the Company or its subsidiaries or any indemnification agreements in existence on the signing date of the merger agreement will survive the merger and may not be amended, repealed or otherwise modified for a period of six years after the effective time in any manner that would adversely affect the rights thereunder of Company indemnified parties with respect to acts or omissions occurring at or prior to the effective time. From and after the effective time, Acquiror will ensure the surviving corporation honors these obligations.

Prior to the effective time, at the Company’s option, the Company shall, or, if the Company is unable to, Acquiror shall cause the surviving corporation to, obtain and fully pay the premium for the non-cancelable extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability insurance policies, in each case with respect to acts or omissions occurring at or prior to the effective time and for a claims reporting or discovery period of at least six years from and after the effective time with respect to any claim related to any period of time at or prior to the effective time from an insurance carrier with the same or better credit rating as the Company’s current insurance carrier with respect to directors’ and officers’ insurance with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Company’s existing policies as in effect as of the date of the merger agreement; provided , however that the Company shall not pay an amount for the directors’ and officers’ insurance in excess of 300% of the annual premium currently paid by the Company. If such “tail” prepaid policy has been obtained by either the Company or the surviving corporation prior to or as of the effective time, Acquiror shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the surviving corporation. If such a “tail” policy cannot be obtained as of the effective time, then the surviving corporation is required to maintain in effect, for a period of not less than six years, the Company’s current directors’ and officers’ insurance policies or a comparable policy, subject to certain limitations and minimum standards.

Efforts to Complete the Merger; Regulatory Approvals

The merger agreement provides that the Company, Acquiror and Merger Sub will each use their respective reasonable best efforts to:

Under the merger agreement, each party is required to (i) promptly, and in no event later than February 6, 2017 (unless otherwise mutually agreed to), make its respective filings pursuant to the HSR Act and the Canadian

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Competition Act and (ii) as promptly as practicable, make its respective filings and notifications, if any, under any other applicable antitrust, competition, foreign investment or trade regulation law, and, in each case, to supply to the appropriate governmental entities as promptly as practicable any additional information and documentary materials as may be requested.

Acquiror and the Company have agreed to take all steps necessary to avoid or eliminate any impediment under any antitrust, competition, foreign investment or trade regulation law that may be asserted by any antitrust or competition governmental entity, so as to enable the parties to close the merger as promptly as practicable, including:

However, no party shall be required to commit to or effect any action that is not conditioned upon the consummation of the merger.

Acquiror and the Company have agreed that Acquiror shall control and direct the parties’ filings, strategies, process, negotiation of settlements (if any) and related proceedings to obtain regulatory approvals, and that Acquiror may take or pursue any reasonable actions or strategies to avoid, resist or reduce the scope of any action sought or required by governmental entities or pertaining to the submission of all required notices to any governmental entity and obtaining the consent therefrom, so long as such action or strategy will not delay satisfaction of the closing conditions past the “outside date” as it may be extended to the “extended outside date” or “further extended outside date,” as applicable (as such terms are defined in the section of this proxy statement entitled “ — Conditions to Consummation of the Merger ” beginning on page 75).

Mars, the Company and their respective subsidiaries (including Acquiror and Merger Sub) have agreed not to, prior to the closing of the merger, acquire or license any asset, businesses or securities of a third party if such action would reasonably be expected to prevent or delay the obtaining of necessary regulatory approvals.

Employee Matters

For a period of at least twelve months following the effective time, Acquiror or the surviving corporation shall, (i) provide each employee of the Company or any of its subsidiaries who continues as of the effective time to be employed by Acquiror, the surviving corporation or any affiliate (which we refer to herein as “continuing employees”) with at least the same level of base salary or hourly wage rate that was provided to such continuing employee immediately prior to the effective time and (ii) provide the continuing employees with other compensation and employee benefits substantially comparable in value, in the aggregate, to those provided to such continuing employees immediately prior to the effective time (including the grant date accounting value of target equity and equity-based compensation received in 2016, but excluding the value of any supplemental executive retirement plans and consulting agreements).

At the effective time, each continuing employee shall be given service credit for all purposes, including for eligibility to participate, benefit levels and eligibility for vesting under Acquiror employee benefit plans and arrangements (which we refer to herein as “Acquiror benefit plans”) with respect to his or her length of service

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with the Company (and its subsidiaries and predecessors) prior to the closing of the merger, provided that the foregoing shall not result in the duplication of benefits and service credit shall not be given for benefit accrual purposes under defined benefit pension plans and retiree medical plans.

After the effective time, Acquiror shall use its reasonable best efforts to (i) cause each continuing employee to be immediately eligible to participate in all Acquiror benefit plans to the extent coverage under such benefit plans replaces, to the extent that Acquiror deems it appropriate, coverage under a comparable Company benefit plan and (ii) for purposes of each Acquiror benefit plan providing medical, dental, pharmaceutical and/or vision benefits to any continuing employee and his or her covered dependents, (A) cause all pre-existing condition limitations, exclusions, waiting periods and actively at work requirements of such Acquiror benefit plan to be waived to the extent such limitations, exclusions, waiting periods and actively at work requirements were waived or satisfied under the comparable Company benefit plan and (B) recognize any eligible expenses incurred under a Company benefit plan during the portion of the plan year prior to the effective time to be taken into account under such Acquiror benefit plan for purposes of satisfying all deductible, co-insurance, co-payment and maximum out of pocket requirements for the applicable plan year as if such amounts had been paid in accordance with such Company benefit plan.

Company Special Meeting

The Company has agreed to duly give notice of, convene and hold a meeting of its stockholders for the purpose of voting upon the adoption of the merger agreement as promptly as practicable following resolution of any SEC comments with respect to this preliminary proxy statement (which the Company was required to use its reasonable best efforts to file within fifteen business days of signing the merger agreement). Subject to certain exceptions permitting a delay, the Company must hold a meeting of its stockholders for the purpose of voting on the adoption of the merger agreement on or around the twentieth business day following the commencement of the mailing of the proxy statement to its stockholders.

Certain Additional Covenants

The merger agreement also contains additional covenants, including, among others, covenants relating to the filing of this proxy statement, covenants relating to regulatory filings and approvals (which are described in the section entitled “ The Merger (Proposal 1)—Regulatory Approvals” beginning on page 60), reporting requirements under Section 16 of the Exchange Act, financing cooperation, the treatment of certain Company indebtedness, coordination with respect to litigation relating to the merger, public announcements with respect to the transactions contemplated by the merger agreement and notification regarding certain matters.

Conditions to Consummation of the Merger

The obligation of each party to complete the merger is subject to the satisfaction or waiver of the following conditions:

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The obligations of Acquiror and Merger Sub to consummate the merger are also subject to the satisfaction or waiver by Acquiror of the following conditions:

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The obligation of the Company to consummate the merger is also subject to the satisfaction or waiver by the Company of the following conditions:

Termination

The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time:

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Termination Fee

If the merger agreement is terminated in specified circumstances, the Company will be required to pay or cause to be paid to Acquiror a termination fee of $275,000,000, which we refer to as the “termination fee.”

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Acquiror would be entitled to receive the termination fee from the Company if the merger agreement is terminated:

Expenses

Except as otherwise provided in the merger agreement, whether or not the merger is consummated, all costs and expenses incurred in connection with the merger, the merger agreement and the other transactions contemplated by the merger agreement will be paid by the party incurring or required to incur such expenses.

Specific Performance; Remedies

In addition to any other remedy that may be available to any of the parties, including monetary damages, each of the Company, Acquiror and Merger Sub is entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement.

Amendment; Waiver

At any time prior to the effective time, any provision of the merger agreement may be amended or waived only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Acquiror and Merger Sub; provided , that, without the further approval of the Company stockholders and the sole stockholder of Merger Sub, no amendment or waiver will be made or given after the Company stockholder approval that requires the approval of the Company stockholders or the sole stockholder of Merger Sub under Delaware law unless the required further approval is obtained; provided , further , that certain sections of the merger agreement pertaining to debt financing, governing law, waiver of jury trial and absence of third-party beneficiaries may not be amended or waived in a manner adverse to the debt financing sources without the prior written consent of the debt financing sources.

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At any time prior to the effective time, either the Company, on the one hand, or Acquiror and Merger Sub, on the other hand, may, to the extent not prohibited by applicable law and except as otherwise set forth in the merger agreement:

Governing Law and Jurisdiction

The merger agreement is governed by Delaware law.

The Company, Acquiror and Merger Sub have agreed (i) to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, solely if such court lacks subject matter jurisdiction, the United States District Court sitting in New Castle County in the State of Delaware, with respect to any dispute arising out of, relating to or in connection with the merger agreement or transaction contemplated thereby, (ii) not to attempt to deny or defeat personal jurisdiction in any such court, (iii) not to bring any such action in any other court and (iv) not to plead or claim such courts are an inconvenient forum.

Notwithstanding the above, the Company, Acquiror and Merger Sub have agreed that (i) New York State or United States federal courts sitting in the borough of Manhattan, City of New York shall have exclusive jurisdiction over any claims, suits, actions or proceedings brought against any lender, arranger or other provider of debt financing, (ii) that no party will bring any such claim, suit or proceeding in any other court, except to the extent otherwise contemplated by any contract between any such debt financing source and Acquiror or any of its affiliates and (iii) except as expressly set forth in any agreement related to the debt financing to which a debt financing source is a party, all claims, suits or proceedings involving the debt financing shall be governed by the laws of the State of New York.

Guarantee

Mars, in order to induce the Company to execute and deliver the merger agreement, has absolutely, unconditionally and irrevocably guaranteed the covenants, agreements and other obligations of Acquiror and Merger Sub, including the due, punctual and full payment and performance of Acquiror’s and Merger Sub’s obligations, subject to limitations on Acquiror’s and Merger Sub’s obligations under the merger agreement.

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THE VOTING AGREEMENTS

The following description sets forth the material provisions of the voting agreements, but does not purport to describe all of the terms of the voting agreements. The full text of the form of voting agreement is attached to this proxy statement as Annex B, and incorporated herein by reference. You are urged to read the form of voting agreement in its entirety.

Concurrently with the execution of the merger agreement on January 7, 2017, Robert L. Antin, our Chairman and Chief Executive Officer, and Arthur J. Antin, our Chief Operating Officer, each entered into a voting agreement, which we refer to as the “voting agreements”, with Acquiror, pursuant to which each of Messrs. R. Antin and A. Antin, among other things, is:

In addition, pursuant to the voting agreements, each of Messrs. R. Antin and A. Antin irrevocably granted a proxy appointing Acquiror and any designee of Acquiror as his attorney-in-fact and proxy, with full power of substitution, to vote and otherwise act (including in any action by written consent of the Company’s stockholders) with respect to all of the subject shares on the matters and in the manner specified above.

Notwithstanding the foregoing agreements, each of Messrs. R. Antin and A. Antin and Acquiror have agreed that the foregoing obligations will not in any way restrict either Messrs. R. Antin or A. Antin, respectively, from taking any action in his capacity as a director, officer or employee of the Company that is otherwise permitted to be taken pursuant to the merger agreement.

The voting agreements terminate upon the earliest to occur of (i) a termination of the merger agreement, (ii) the mutual written consent of Acquiror and Mr. R. Antin or Mr. A. Antin, as applicable and (iii) the adoption of the merger agreement by the affirmative vote of the holders of a majority of the issued and outstanding shares of the Company’s common stock. As of the close of business on the record date, Mr. R. Antin was entitled to vote 2,577,123 shares of our common stock, or approximately 3.16% of the shares of our common stock issued and outstanding as of that date, and Mr. A. Antin was entitled to vote 301,229 shares of our common stock, or approximately 0.37% of the shares of our common stock issued and outstanding as of that date.

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