Central Parking Corporation
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 21, 2007 (February 20, 2007)
Central Parking Corporation
(Exact name of Registrant as specified in its charter)
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Tennessee
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001-13950
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62-1052916 |
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number) |
2401 21st Avenue South, Suite 200 Nashville, TN 37212
(Address of principal executive offices)
(615) 297-4255
(Registrants telephone number, including area code)
Not applicable
(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry Into a Material Definitive Agreement.
On February 20, 2007, Central Parking Corporation, a Tennessee corporation (the Company),
entered into an Agreement and Plan of Merger (the Merger Agreement) with KCPC Holdings, Inc., a
Delaware corporation (Parent) and KCPC Acquisition, Inc., a Tennessee corporation and a
wholly-owned subsidiary of Parent (Merger Sub). Under the terms of the Merger Agreement, Merger
Sub will be merged with and into the Company, with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of Parent (the Merger). Parent is owned by a
consortium of private investment funds affiliated with Kohlberg & Co., L.L.C., Lubert-Adler
Management, Inc. and Chrysalis Capital Partners, Inc. (the Equity Sponsors).
The Board of Directors of the Company approved the Merger Agreement upon the unanimous
recommendation of a Special Committee of the Board of Directors comprised entirely of independent
directors.
At the effective time of the Merger, each outstanding share of common stock of the Company (the
Common Stock), other than any shares owned by the Company, Parent, Merger Sub, or Rollover Shares
(as defined below) will be cancelled and converted into the right to receive $22.53 in cash, without interest (the
Common Stock Merger Consideration). In addition, at the effective time of the Merger, each
outstanding share of the Trust Issued Preferred Securities issued by Central Parking Finance Trust,
a statutory business trust and wholly-owned subsidiary of the Company (TIPS) shall remain
outstanding and shall thereafter be convertible at the election of the holder of the TIPS into an
amount equal to the product of the Common Stock Merger Consideration times the number of Company
Common Stock into which the TIPS could have been converted at the Effective Time.
The Merger Agreement subjects the Company to a no-shop restriction on its ability to solicit
third party proposals, provide information and engage in discussions with third parties. The
no-shop provision is subject to a fiduciary-out provision that allows the Company to provide
information and participate in discussions with respect to unsolicited third party written
proposals submitted, that the Board of Directors (1) believes in good faith to be bona fide, (2)
determines in good faith, after consultation with advisors, could reasonably be expected to result
in a superior proposal, as defined in the Merger Agreement, and (3) determines it is required to
pursue (by furnishing information or engaging in discussions) in order to comply with its fiduciary
duties.
The Company may terminate the Merger Agreement under certain circumstances, including if its Board
of Directors determines in good faith that it has received a superior proposal, and otherwise
complies with certain terms of the Merger Agreement. In connection with such termination, the
Company must pay a fee of $22.4 million (Company Termination Fee) to Parent. If the Company
terminates the Merger Agreement because Parent fails to obtain sufficient financing, then Parent
must pay a fee of $30 million (Parent Termination Fee) to the Company, payment of which fee is
guaranteed by the Equity Sponsors.
Monroe Carell, his family and certain related trusts, representing approximately 47% of the
outstanding Common Stock have entered into voting agreements pursuant
to which they, among other
things, agree to vote their shares of Common Stock of the Company in favor of the approval of the
Merger Agreement and the approval of the transactions contemplated thereby, provided, however, such
voting agreement shall terminate upon the termination or material amendment of the Merger
Agreement. A copy of the Form of Voting Agreement is attached hereto as Exhibit 10.2.
Certain
employees of the Company may be given the opportunity to exchange a portion of their
Company equity into equity of the Parent or an affiliate thereof (collectively, the Rollover Shares), at the
election of the Sponsors pursuant to an agreement between such employee and Parent to be entered
into between the execution of the Merger Agreement and closing of the Merger. As of the date of
this Report, no such agreements have been entered into.
Parent has obtained equity and debt financing commitments for the transactions contemplated by the
Merger Agreement, the aggregate proceeds of which will be sufficient for Parent to pay the
aggregate merger consideration and all related fees and expenses. Consummation of the Merger is not
subject to a financing condition, but is subject to various other conditions, including approval of
the Merger by the Companys shareholders, expiration or termination of applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing
conditions. The parties expect to close the transaction during the second calendar quarter of 2007.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby do not
purport to be complete and are subject to, and qualified in its entirety by, the full text of the
Merger Agreement attached as Exhibit 2.1 and incorporated herein by reference.
The Company engaged The Blackstone Group L.P. (Blackstone) to serve as financial advisor to the
Company. On February 20, 2007, Blackstone delivered an opinion
to the Special Committee of the Board of Directors of the
Company that as of the date of the opinion, the merger consideration to be received by holders of
the Companys common stock is fair to such holders from a financial point of view.
The Merger Agreement has been included to provide investors and security holders with information
regarding its terms. It is not intended to provide any other factual information about the Company.
The representations, warranties and covenants contained in the Merger Agreement were made only for
purposes of such agreement and as of specific dates, were solely for the benefit of the parties to
such agreement, and may be subject to limitations agreed upon by the contracting parties, including
being qualified by confidential disclosures exchanged between the parties in connection with the
execution of the Merger Agreement. The representations and warranties may have been made for the
purposes of allocating contractual risk between the parties to the agreement instead of
establishing these matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to investors. Investors are not
third-party beneficiaries under the Merger Agreement and should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the actual state of
facts or condition of the Company or Parent or any of their
respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in the Companys public disclosures.
Important Additional Information will be Filed with the SEC:
In connection with the proposed Merger, the Company will prepare a proxy statement for the
shareholders of the Company to be filed with the SEC. Before making any voting decision, the
companys shareholders are urged to read the proxy statement regarding the merger carefully in its
entirety when it becomes available because it will contain important information about the proposed
transaction. The Companys shareholders and other interested parties will be able to obtain,
without charge, a copy of the proxy statement (when available) and other relevant documents filed
with the SEC from the SECs website at http://www.sec.gov. The Companys shareholders and other
interested parties will also be able to obtain, without charge, a copy of the proxy statement and
other relevant documents (when available) by directing a request by mail or telephone to Central
Parking Corporation, 2401 21st Avenue South, Nashville, Tennessee 37212, telephone: (615) 297-4255,
or from the Companys website, www.parking.com.
The Company and its directors and officers may be deemed to be participants in the solicitation of
proxies from the Companys shareholders with respect to the Merger. Information about the Companys
directors and executive officers and their ownership of the Companys common stock is set forth in
the Companys Annual Report on Form 10-K, as amended, for the
year ended September 30, 2006, which
was filed with the SEC on December 14, 2006 and amended on January 29, 2007. Shareholders and
investors may obtain additional information regarding the interests of the Company and its
directors and executive officers in the Merger, which may be different than those of the Companys
shareholders generally, by reading the proxy statement and other relevant documents regarding
Merger, which will be filed with the SEC.
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Item 5.2 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
Transaction Bonuses.
On
February 20, 2007, the compensation committee approved
transaction bonuses to certain officers and key employees of the Company. The transaction bonuses provide that the
officers and key employees will be paid a bonus
of up to 100% of their twelve (12) months base salary and are payable one half at the time of the
execution of the Merger Agreement and one half at the closing of the
Merger, provided such officer
or key employee remains with the Company at the time of the Merger.
The officers receiving these transaction bonuses include, among others, the
Companys named executive officers, CEO and CFO each as described below:
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Percentage |
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Total |
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Name & Title |
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Bonus |
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Bonus |
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Emanuel J. Eads, President and Chief Executive Officer |
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100 |
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550,000 |
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Jeff Heavrin, Chief Financial Officer |
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100 |
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$ |
275,000 |
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Greg Stormberg, Executive Vice President |
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25 |
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90,000 |
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James Bond, Executive Vice President |
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20 |
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90,000 |
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Carell Agreement.
On February 20, 2007, with the Equity Sponsors consent and approval, the Special Committee
approved an Agreement with Monroe J. Carell, Jr, the Executive Chairman as a material inducement to
Mr. Carell entering into the Voting Agreement, but contingent on the closing of the Merger. The
Agreement interprets and modifies Mr. Carells compensation arrangement with the Company and
included the following:
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Effective as of the closing of the Merger, Mr. Carell shall resign as Executive Chairman
of the Companys Board of Directors and shall resign as a member of the Companys Board of
Directors. Such resignation shall be deemed to be a termination for Good Reason for
purposes of Mr. Carells Employment Agreement which will entitle Mr. Carell to the payments
referred to in the Employment Agreement. For purposes of calculating such payments, Mr.
Carells Base Salary shall be deemed to be Eight Hundred Forty-Five Thousand Dollars
($845,000). |
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Mr. Carell shall waive, effective upon the closing of the Merger, the right in his
Employment Agreement which provides that upon the termination of Mr. Carells employment
with the Company for Good Reason, he will be entitled to be paid up to Twenty-Five
Thousand Dollars ($25,000) for outplacement assistance. |
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Mr. Carells Revised Deferred Compensation Agreement contains certain post-termination
non-compete and non-solicitation covenants. Effective upon the closing of the Merger, the
non-compete and non-solicitation provisions in the Revised Deferred
Compensation Agreement are amended and restated primarily to
(i) fix the term of the non-compete at twelve (12) months, (ii) clarify the consulting services that Mr.
Carell can provide without violating the non-compete and
(iii) allow Mr. Carell the right to acquire parking
assets without offering the Company a right of first refusal to operate such assets. |
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For a period of two weeks following the closing of the Merger, Mr. Carell shall be
entitled to the continued use of the Company office he is using at the time of his
resignation. Thereafter, the Company will relocate Mr. Carell to reasonably equivalent
office space selected by Mr. Carell. Through September 30, 2012, the Company will pay the
rental fees for such new office space and the base salary for Mr. Carells secretary. |
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The Company shall reimburse Mr. Carell for all actual and reasonable legal, tax, and
accounting fees and expenses incurred after February 14, 2007 by Mr. Carell, his immediate
family members, and the trusts created by Mr. Carell which are associated with the sale of
their interests in the Company in connection with the Merger. |
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Effective upon the closing of the Merger, the Company shall
pay Mr. Carell the net present value of the monthly consulting fees
currently provided for in the Revised Deferred Compensation Agreement. |
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Following the closing of the Merger, the Company shall permit Mr. Carell, his spouse,
his lineal descendants and their spouses to continue to park their personal vehicles in any
Company parking facility free of charge during Mr. Carells lifetime. |
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The Company shall take such actions as necessary to effect certain changes to the
existing split-dollar life insurance policies on the life of
Mr. Carell which will limit the Companys recovery under
such policies to the current cash value of the policies plus certain
future premium payments to be made by the Company. |
Item 7.01 Regulation FD Disclosure.
On February 21, 2007 the Company issued a press release announcing that it had entered into the
Merger Agreement. A copy of the press release is attached as Exhibit 99.1 hereto.
Forward Looking Statements
This Report contains historical and forward-looking information. The words possible, may,
guidance, looking ahead, expectations, plan, assumptions, estimates, anticipates,
goal, outlook, intend, plan, continue to expect, should, believe, project,
objective, outlook, forecast, will likely result, or will continue and similar
expressions identify forward-looking statements. The forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company
believes the assumptions underlying these forward-looking statements are reasonable; however, any
of the assumptions could be inaccurate, and therefore, actual results may differ materially from
those projected in the forward-looking statements. The factors that may result in actual results
differing from such forward-looking information include, but are not limited to: the occurrence of
any event, change or other circumstances that could give rise to the termination of the merger
agreement, the outcome of any legal proceedings that may be instituted against the Company and
others following announcement of the merger agreement; the inability to complete the merger due to
the failure to obtain shareholder approval or the failure to satisfy other conditions to completion
of the merger, the failure of the private equity partners to obtain the necessary debt financing
set forth in commitment letter received in connection with the merger, risks that the proposed
merger disrupts current plans, operations, contracts or business relationships, the amount of the
costs, fees, expenses and charges related to the merger and the actual terms of certain financings
that will be obtained for the merger, the Companys ability to implement its strategic plan,
maintain reduced operating costs, reduce indebtedness and sell real estate at projected values as
well as continued improvement in same store sales, which is dependent on general economic
conditions and office occupancy rates; the loss or renewal on less favorable terms, of management
contracts and leases; the timing of pre-opening, start-up and break-in costs of parking facilities;
the Companys ability to cover the fixed costs of its leased and owned facilities and its overall
ability to maintain adequate liquidity through its cash resources and credit facilities; the
Companys ability to comply with the terms of the Companys credit facilities (or obtain waivers
for non-compliance); interest rate fluctuations; acts of war or terrorism; changes in demand due to
weather patterns and special events including sports events and strikes; higher premium and claims
costs relating to the Companys insurance programs, including medical, liability and workers
compensation; the Companys ability to renew and obtain performance and surety bonds on favorable
terms; the impact of claims and litigation; and increased regulation or taxation of parking
operations and real estate.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date of this release. The Company undertakes no obligation to publicly update or
revise any forward-looking statements contained herein to reflect events or circumstances occurring
after the date of this release or to reflect the occurrence of unanticipated events. We have
provided additional information in our Annual Report on Form 10-K for our fiscal year ended
September 30, 2006, on Form 10-Q for the quarter ended December 31, 2006, filed with the Securities
and Exchange Commission and in other filings with the Securities and Exchange Commission, which
readers are encouraged to review, concerning other factors that could cause actual results to
differ materially from those indicated in the forward-looking statements.
Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
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Exhibit |
2.1
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Agreement and Plan of Merger dated as of February 20, 2007 by and among
KCPC Holdings, Inc., a Delaware corporation, KCPC Acquisition, Inc., a Tennessee
corporation, and Central Parking Corporation, a Tennessee corporation |
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10.1
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Agreement executed as of February 20, 2007 by and between Monroe J.
Carell, Jr. and Central Parking Corporation, a Tennessee corporation. |
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10.2
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Form of Voting Agreement |
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99.1
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Press Release dated February 21, 2007. |
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Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon
request. |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Central Parking Corporation
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/s/ Benjamin F. Parrish, Jr.
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Benjamin F. Parrish, Jr. |
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Senior Vice President and General Counsel |
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Date: February 21, 2007
Exhibit Index
Exhibit No.
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2.1
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Agreement and Plan of Merger dated as of February 20, 2007 by and
among KCPC Holdings, Inc., a Delaware corporation, KCPC Acquisition,
Inc., a Tennessee corporation, and Central Parking Corporation, a
Tennessee corporation. |
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10.1
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Agreement executed as of February 20, 2007 by and between Monroe J.
Carell, Jr. and Central Parking Corporation, a Tennessee corporation. |
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10.2
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Form of Voting Agreement |
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99.1
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Press release dated February 21, 2007. |