Item 1.01. Entry into a Material Definitive
Agreement.
Merger Agreement
On
August 16, 2022, Hill International, Inc., a Delaware corporation (the “Company”), Global Infrastructure
Solutions Inc., a Delaware corporation (“Parent”), and Liberty Acquisition Sub Inc., a Delaware corporation and an
indirect wholly owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions described therein, Merger Sub
has agreed to commence (within the meaning of Rule 14d-2 under the Exchange Act) a cash tender offer (as it may be extended and amended
from time to time as permitted under the Merger Agreement, the “Offer”) to purchase all of the issued and outstanding
shares of common stock, par value $0.0001 per share, of the Company (“Company Common Stock”) for $2.85 per share of
Company Common Stock (such amount, the “Offer Price”), net to the seller in cash, without interest.
The
Company’s Board of Directors (the “Board”) has unanimously (i) determined that the Merger Agreement and
the transactions contemplated thereby (the “Transactions”), including the Offer and the Merger (as defined below),
are advisable and fair to, and in the best interest of, the Company and its stockholders and (ii) recommended that the stockholders
of the Company accept the Offer and tender their shares of Company Common Stock pursuant to the Offer (the “Company Board Recommendation”),
subject to the right of the Board to withdraw or modify its recommendation in accordance with the terms of the Merger Agreement.
Under
the Merger Agreement, Merger Sub is required, as soon as practicable, and in any event within 15 business days after the date of the Merger
Agreement, to commence the Offer to purchase all outstanding shares of Company Common Stock. The Offer initially will remain open for
20 business days, subject to possible extension on the terms set forth in the Merger Agreement.
Merger
Sub’s obligation to accept shares of Company Common Stock tendered in the Offer is subject to customary conditions, including: (i) that
the number of shares of Company Common Stock validly tendered and not validly withdrawn, considered together with all other shares of
Company Common Stock (if any) beneficially owned by Parent, Merger Sub and their respective affiliates, represent one more than 50% of
the total number of shares of Company Common Stock; (ii) expiration or termination of any waiting periods applicable to the
consummation of the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of consent or authorization
under applicable antitrust laws; (iii) the absence of any order that has the effect of preventing, making illegal or otherwise prohibiting
the consummation of the Transactions; (iv) the continued accuracy of representations and warranties made by the Company in the Merger
Agreement, except as permitted in the Merger Agreement; (v) the Company’s material compliance with its obligations under the
Merger Agreement; (vi) the absence of any Company Material Adverse Effect (as defined in the Merger Agreement) since the date
of the Merger Agreement; and (vii) the Company’s delivery to Parent of a certificate signed by its Chief Executive Officer or Chief Financial Officer, certifying
that the foregoing clauses (iv), (v) and (vi) have been satisfied (collectively, the “Offer Conditions”).
The
Merger Agreement provides that, following the consummation of the Offer and provided that the parties have not agreed to effectuate the
Transactions as a One-Step Merger (as defined below), upon the terms and conditions set forth in the Merger Agreement and in accordance
with Section 251(h) of the General Corporation Law of the State of Delaware (“DGCL”), Merger Sub will be
merged with and into the Company (the “Merger”) with the Company surviving the Merger as the surviving corporation
and an indirect wholly owned subsidiary of Parent.
At
the effective time of the Merger (the “Effective Time”), each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than (A) shares of Company Common Stock (1) held in the treasury of the Company,
(2) at the commencement of the Offer, owned by Parent or Merger Sub, or any direct or indirect wholly owned subsidiaries of Parent
or Merger Sub, and (3) irrevocably accepted for purchase in the Offer (collectively, the “Excluded Shares”) and
(B) the Appraisal Shares (as defined in the Merger Agreement), shall be automatically converted into the right to receive an amount
in cash equal to the Offer Price, without interest (such amount of cash, the “Merger Consideration”). Each share of
Company Common Stock to be converted into the right to receive the Merger Consideration shall automatically be cancelled and shall cease
to exist as of the Effective Time. Each Excluded Share shall be cancelled without any consideration therefor and shall cease to exist
as of the Effective Time.
At
the Effective Time, each Company Compensatory Award, whether vested or unvested, that is outstanding immediately prior to the Effective
Time shall be cancelled and, in exchange therefor, each former holder of any such Company Compensatory Award shall have the right to receive
an amount in cash, without interest, equal to the product of (i) the aggregate number of shares of Company Common Stock subject to
each such Company Compensatory Award as of the Effective Time and (ii) the excess, if any, of the Merger Consideration over any per
share exercise or purchase price of such Company Compensatory Award immediately prior to such cancellation.
As
soon as practicable following the date of the Merger Agreement, the Company shall take all actions necessary or required under the Company
Employee Stock Purchase Plan (“Company ESPP”) and subject to applicable law to cause the Company ESPP not to commence
an offering period to purchase Company Common Stock that would otherwise begin on or after the date of the Merger Agreement or to accept
payroll deductions with respect to any such offering period that would otherwise begin on or after the date of the Merger Agreement and,
on or promptly following the date of the Merger Agreement, shall cause the Company ESPP to be terminated. In satisfaction of such condition, the Company ESPP was terminated by the Company on April 16, 2022 immediately following the signing
of the Merger Agreement.
The
consummation of the Merger is subject to customary conditions, including: (i) Merger Sub’s acceptance for payment of the Company
Common Stock validly tendered pursuant to the Offer and not withdrawn and (ii) the absence of any order that has the effect of preventing,
making illegal or otherwise prohibiting the consummation of the Merger. Neither the Offer nor the Merger is subject to any financing condition.
The
Merger Agreement also provides that, upon the written request of Parent, the parties agree to: (1) consider whether the Transactions
contemplated by the Merger Agreement should be effectuated by means of a Merger to be effected under Section 251(c) of the DGCL
(a “One-Step Merger”), and (2) if so determined, cooperate in good faith to effectuate the Transactions in such
manner and make such reasonable and customary amendments to the Merger Agreement as Parent, Merger Sub and the Company mutually agree
are necessary to reflect such structure. If the parties agree to effectuate the Transactions as a One-Step Merger, the Company would be
required to file a proxy statement to obtain approval of the Merger by the Company’s stockholders at a special stockholders meeting
held for the purpose of voting upon the adoption of the Merger Agreement, and the Merger would be effected pursuant to Section 251(c) of
the DGCL.
The Merger Agreement includes
certain representations and warranties of the Company, on the one hand, and Parent and Merger Sub, on the other hand. It also contains
customary covenants, including certain restrictions with respect to the Company’s business between the date of the Merger Agreement
and the consummation of the Merger. The Merger Agreement includes customary “no-shop” restrictions on the Company’s
ability, among other things, to solicit, furnish information to and engage in discussions or negotiations with, third parties regarding
alternative acquisition proposals. Notwithstanding these restrictions, the Company may provide information to and engage in discussions
or negotiations with third parties with respect to an unsolicited bona fide written alternative acquisition proposal if (i) the Board
has determined in good faith that such proposal constitutes or could reasonably be expected to lead to a Superior Proposal (as defined
in the Merger Agreement) and (ii) the failure to take such action would be inconsistent with the Board’s fiduciary duties under
applicable law.
The Merger Agreement restricts
the Board’s ability to withdraw, qualify or modify the Company Board Recommendation, approve or recommend any alternative acquisition
proposal or adopt or approve entrance by the Company into any agreement regarding an alternative acquisition proposal and requires that
the Board include the Company Board Recommendation in the Schedule 14D-9 filed with the SEC in connection with the Offer, reaffirm the
Company Board Recommendation upon request by Parent following public disclosure of an alternative acquisition proposal, and to recommend,
in a timely manner, against any alternative acquisition proposal that is a tender or exchange offer subject to Regulation 14D under the
Exchange Act. Notwithstanding these restrictions, the Board is permitted, subject to the terms and conditions set forth in the Merger
Agreement, to withdraw, qualify or modify the Company Board Recommendation in response to a Superior Proposal or an Intervening Event
(as defined in the Merger Agreement) or, in the case of a Superior Proposal, terminate the Merger Agreement to enter into a definitive
agreement with respect to the Superior Proposal, subject in each case to certain matching rights in favor of Parent.
The
Merger Agreement contains certain mutual termination rights for the Company and Parent, including, but not limited to, the right
for either party to terminate the Merger Agreement if the Offer is not consummated on or before April 15, 2023.
Under certain circumstances, the Company may terminate the Agreement (i) at any time prior to the consummation of the Offer in order
to enter into a definitive agreement with respect to a Superior Proposal (as defined in the Merger Agreement), (ii) if Merger Sub
fails to commence the Offer on or prior to the fifteenth (15th) business day following the date of the Merger Agreement, or (iii) if
Merger Sub fails to consummate the Offer within two (2) business days following the Expiration Date and, as of such Expiration Date,
all the Offer Conditions have been satisfied or waived. In addition, under certain circumstances, Parent may terminate the Merger Agreement
if the Company Board shall have effected a Change in Recommendation (as defined in the Merger Agreement) prior to the consummation of
the Offer. Upon the termination of the Merger Agreement under specified circumstances, the Company will be required to pay Parent a termination
fee of $5,200,000 (the “Termination Fee”). The Company will, following termination of the Merger Agreement under
certain circumstances, be required to reimburse up to $1,700,000 of the reasonable costs and expenses incurred by Parent, Merger Sub or
their respective affiliates in connection with the transactions (the “Expense Reimbursement”). Any amounts paid as
Expense Reimbursement will reduce the amount of the Termination Fee on a dollar-for-dollar basis.
If
the Merger is consummated, the Company Common Stock will be delisted from the New York Stock Exchange as soon as practicable following
the Effective Time and de-registered under the Securities Exchange Act of 1934, as amended.
The
foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Merger Agreement, which is attached hereto as Exhibit 2.1, and the terms of the Merger Agreement is incorporated herein
by reference.
The
Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the dates specified
therein. The assertions embodied in those representations, warranties and covenants were made, or will be made, for purposes of the contracts
among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating
such agreements. The representations, warranties and covenants in the Merger Agreement are also modified in important part by the disclosure
schedule delivered by the Company and not filed publicly and which may be subject to a contractual standard of materiality different from
that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing
matters as facts. The Company does not believe that the disclosure schedule contains information that is material to an investment decision.
Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective
affiliates.
Support Agreement
Concurrently
with the execution of the Merger Agreement, Parent entered into a Tender and Support Agreement (the “Support Agreement”)
with certain stockholders of the Company collectively beneficially owning approximately 10% of the outstanding shares of Company Common
Stock, pursuant to which each such stockholder agreed, among other things, to vote against other proposals to acquire the Company and,
subject to certain exceptions, to tender such stockholder’s shares of Company Common Stock pursuant to the Offer. The Support Agreement
terminates in certain circumstances, including in connection with (i) the Board’s determination to change its recommendation
with respect to the Transactions and (ii) any modification or amendment to, or the waiver of any provision of, the Merger Agreement
as in effect on the date of the Support Agreement or the Offer that is effected, in either case, without the written consent of the stockholders
of the Company party to the Support Agreement, that decreases the amount, or changes the form or terms of consideration payable for the
shares of Company Common Stock pursuant to the Merger Agreement or adversely affects the rights of any stockholder of the Company party
to the Support Agreement.
The
foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Support Agreement, which is attached hereto as Exhibit 10.1, and the terms of the Support Agreement is incorporated herein
by reference.