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SCHEDULE 14a
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(Amendment No._________)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
NATIONSRENT, INC.
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(Name of Registrant as Specified In Its Charter)
N/A
---
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of the transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
August 14, 2000
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
NationsRent, Inc. to be held on Friday, September 8, 2000 at 10:00 a.m. at the
Company's corporate headquarters at 450 East Las Olas Boulevard, Fort
Lauderdale, Florida 33301, and vote upon the matters set forth in the
accompanying Notice of Meeting and Proxy Statement.
The Notice of Special Meeting, Proxy Statement and proxy form are included
with this letter. The matters to be voted upon as listed in the Notice of
Meeting are more fully described in the Proxy Statement.
Whether or not you plan to attend in person, it is important that your
shares be represented at the Special Meeting. Please sign, date and return your
proxy card in the enclosed envelope as soon as possible. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE MATTERS DESCRIBED IN THE PROXY
STATEMENT TO BE VOTED UPON AT THE SPECIAL MEETING. Thank you.
Sincerely,
/s/ James L. Kirk
James L. Kirk
Chairman of the Board and
Chief Executive Officer
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(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of NationsRent, Inc.:
A Special Meeting of Stockholders, or any adjournment or postponement
thereof (the "Special Meeting"), of NationsRent, Inc., a Delaware corporation
(the "Company"), will be held on Friday, September 8, 2000 at 10:00 a.m. at 450
East Las Olas Boulevard, Fort Lauderdale, Florida 33301, to consider and vote
upon the following matters, all of which are set forth more completely in the
accompanying Proxy Statement.
1. To approve: (a) the issuance, in a series of transactions, of 100,000
shares of Series B Convertible Preferred Stock (the "Series B Preferred
Stock") to NR2 Holdings Limited, DB Capital Investors, L.P., J.P. Morgan
Capital Corporation and Sixty Wall Street Fund, L.P., 52,000 shares of
which have already been issued and 48,000 shares of which will be issued
after stockholder approval is obtained; and (b) the issuance of shares
of Common Stock upon the conversion of such Series B Preferred Stock.
2. To approve the future issuance of Common Stock or securities convertible
into or exercisable for Common Stock to the holders of the Series B
Preferred Stock, or their permitted transferees, from time to time
pursuant to their exercise of the preemptive rights to which they are
entitled under the Certificate of Designation for the Series B Preferred
Stock.
The Board of Directors has fixed the close of business on August 11, 2000
as the record date for determining those stockholders entitled to notice of, and
to vote at, the Special Meeting.
A FORM OF PROXY AND THE PROXY STATEMENT OF THE COMPANY RELATING TO THE
SPECIAL MEETING OF STOCKHOLDERS ARE ENCLOSED. IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT
THE SPECIAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
/s/ Joseph H. Izhakoff
Joseph H. Izhakoff
Vice President, General Counsel and
Secretary
Fort Lauderdale, Florida
August 14, 2000
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(NATIONSRENT, INC. LOGO)
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NationsRent, Inc. (the "Company"), for use
at a Special Meeting of Stockholders of the Company, or any adjournment or
postponement thereof (the "Special Meeting"). The Special Meeting will be held
on Friday, September 8, 2000 at 10:00 a.m. at the Company's corporate
headquarters at 450 East Las Olas Boulevard, Fort Lauderdale, Florida 33301.
It is anticipated that the Notice of Special Meeting, this Proxy Statement
and the proxy form will be mailed to stockholders of the Company on or about
August 14, 2000.
RECORD DATE
Only stockholders of record at the close of business on August 11, 2000
(the "Record Date") are entitled to vote at the Special Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
As of the Record Date, there were 58,352,704 shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), and 100,000 shares of the
Company's Series A Convertible Preferred Stock, par value $.01 per share (the
"Series A Preferred Stock"), issued and outstanding, all of which are entitled
to be voted at the Special Meeting, except for 465,100 shares of Common Stock
which are held in the Company's treasury. Also, as of the Record Date, there
were 52,000 shares of the Company's Series B Convertible Preferred Stock, par
value $.01 per share (the "Series B Preferred Stock"), issued and outstanding,
none of which are entitled to be counted toward the determination of whether
stockholder approval has been obtained in accordance with the requirements of
The New York Stock Exchange for the proposals to be acted upon at the Special
Meeting. As of the Record Date, the 100,000 shares of issued and outstanding
Series A Preferred Stock were convertible into 14,285,714 shares of Common
Stock, and the 52,000 shares of Series B Preferred Stock were convertible into
11,555,555 shares of Common Stock. Each share of Common Stock is entitled to one
vote on each matter submitted to stockholders for approval at the Special
Meeting. Each share of Series A Preferred Stock is entitled to one vote per
share of Common Stock issuable upon conversion of the Series A Preferred Stock
as of the Record Date and votes together with shares of Common Stock on all
matters submitted to stockholders for a vote at the Special Meeting.
PROXY PROCEDURE
Proxies properly executed and returned in a timely manner will be voted at
the Special Meeting in accordance with the directions noted thereon. If no
direction is indicated, proxies will be voted for (i) approval of the issuance
of the shares of Series B Preferred Stock to NR2 Holdings Limited, a Cayman
Islands corporation ("NR2 Holdings"), DB Capital Investors, L.P., a Delaware
limited partnership ("DB Capital"), J.P. Morgan Capital Corporation, a Delaware
corporation ("J.P. Morgan"), and Sixty Wall Street Fund, L.P., a Delaware
limited partnership ("Sixty Wall Street"), and the issuance of shares of Common
Stock upon the conversion of such Series B Preferred Stock and (ii) approval of
the future issuance of Common Stock or securities convertible into or
exercisable for Common Stock to the holders of the Series B Preferred Stock, or
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their permitted transferees, pursuant to their exercise of the preemptive rights
to which they are entitled under the Certificate of Designation for the Series B
Preferred Stock. Any stockholder giving a proxy has the power to revoke it at
any time before it is voted, either in person at the Special Meeting, by written
notice to the Secretary of the Company or by delivery of a later-dated proxy.
Votes cast by proxy or in person at the Special Meeting will be tabulated
by the inspectors of elections appointed for the Special Meeting and will be
counted as shares present and voting on the proposals brought to a vote at the
Special Meeting. A proxy submitted by a stockholder may indicate that all or a
portion of the shares represented by such proxy are not being voted by such
stockholder with respect to a particular matter ("broker non-votes"). This could
occur, for example, when a broker is not permitted to vote shares held in
"street name" on certain matters in the absence of instructions from the
beneficial owner of the shares. Broker non-votes with respect to a particular
matter will not be considered shares present and voting on such matter. Shares
voting to abstain as to a particular matter will be considered present and
voting with respect to such matter.
VOTING REQUIREMENTS
For the proposals to be approved in accordance with the requirements of The
New York Stock Exchange, they must be approved by a majority of the votes cast
on the proposals by the holders of Common Stock and Series A Preferred Stock,
provided that the total votes cast must represent more than 50% of the voting
power of the shares of Common Stock and Series A Preferred Stock outstanding on
the Record Date and entitled to vote on the proposals. Broker non-votes will
have no effect, other than to render more difficult obtaining votes constituting
50% of the voting power of the Shares of Common Stock and Series A Preferred
Stock outstanding on the Record Date. Abstentions from voting on any of the
matters brought to a vote at the Special Meeting will have the effect of votes
against that particular matter.
Current stockholders who owned 25,631,312 shares of Common Stock and
100,000 shares of Series A Preferred Stock (which are convertible into
14,285,714 shares of Common Stock) as of the Record Date, representing 55% of
the voting power of the outstanding shares of Common Stock and Series A
Preferred Stock, have agreed to vote in favor of the proposals. Accordingly,
approval of the proposals is assured.
COSTS OF SOLICITATION
All costs of solicitation will be borne by the Company. The solicitation is
to be principally conducted by mail and may be supplemented by telephone and
personal contacts by directors, executive officers and employees of the Company,
without additional remuneration. Arrangements will be made with brokerage
houses, banks and custodians, nominees and other fiduciaries to forward
solicitation materials to the beneficial owners of stock held of record. The
Company will reimburse such persons for their reasonable out-of-pocket expenses
incurred in connection with the distribution of proxy materials.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company recommends that the stockholders vote
"for" the approval of the issuance of the Series B Preferred Stock and the
approval of the issuance of securities to holders of the Series B Preferred
Stock upon the future exercise of their preemptive rights.
INTEREST OF CERTAIN PERSONS IN THE TRANSACTION
NR2 Holdings is an affiliate of Investcorp S.A. ("Investcorp"). Other
affiliates of Investcorp currently own all of the outstanding Series A Preferred
Stock issued by the Company. The Series A Preferred Stock is convertible into
14,285,714 shares of Common Stock, or 20% of the voting power of the outstanding
shares of Common Stock and Series A Preferred Stock as of the Record Date. The
Series A Preferred Stock has the right, voting as a separate class, to elect two
directors of the Company. The Series A Preferred Stock currently has one
designee on the Company's Board of Directors, Christopher J. O'Brien. Pursuant
to the preemptive rights provision of the Series A Preferred Stock, when the
Company issues capital stock in a public or private offering, the holders of the
Series A Preferred Stock have the right to purchase shares in such offering to
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maintain their proportionate ownership in the Company following the offering.
NR2 Holdings is acquiring shares of Series B Preferred Stock pursuant to the
exercise of such preemptive rights in connection with the Company's offering of
Series B Preferred Stock, which rights have been transferred to NR2 Holdings by
the holders of the Series A Preferred Stock.
NR2 Holdings, DB Capital, J.P. Morgan and Sixty Wall Street currently own
all the outstanding Series B Preferred Stock issued by the Company. The holders
of the Series B Preferred Stock have the right to designate two directors of the
Company. Pursuant to the Preferred Stock Purchase Agreement, dated August 2,
2000, among the Company, NR2 Holdings, DB Capital, J.P. Morgan and Sixty Wall
Street, concerning the purchase of the Series B Preferred Stock, the Company's
Board of Directors is required to increase the size of the Board from eight to
ten members and appoint Robert G. Sharp, designee of DB Capital, and Simon C.
Moore, designee of J.P. Morgan, as directors of the Company.
The holders of the Series A Preferred Stock have designated Sean P. Madden
to fill the vacant slot on the Board of Directors that such holders are entitled
to elect, and he is expected to be elected to the Board at the same time as the
designees of DB Capital and J.P. Morgan are elected.
PROPOSAL NO. 1
APPROVAL OF THE ISSUANCE OF SERIES B PREFERRED STOCK
AND THE ISSUANCE OF COMMON STOCK
UPON THE CONVERSION OF SUCH SERIES B PREFERRED STOCK
The Company is seeking stockholder approval, pursuant to Paragraphs
312.03(b) and (c) of The New York Stock Exchange Listed Company Manual, of:
(a) the issuance, in a series of transactions, of 100,000 shares of Series
B Convertible Preferred Stock (the "Series B Preferred Stock") to NR2
Holdings, DB Capital, J.P. Morgan and Sixty Wall Street, 52,000 shares
of which have already been issued and 48,000 shares of which will be
issued after stockholder approval is obtained; and
(b) the issuance of shares of Common Stock upon the conversion of such
Series B Preferred Stock.
Paragraph 312.03(c) requires stockholder approval prior to the issuance in
a transaction or series of transactions of securities convertible into common
stock if the number of shares of common stock issuable will upon issuance be
equal to or in excess of 20% of the number of shares of common stock or the
voting power outstanding before the issuance of the convertible securities. On
August 2, 2000, pursuant to the Preferred Stock Purchase Agreement described
below, the Company issued an aggregate of 52,000 shares of Series B Preferred
Stock to NR2 Holdings, DB Capital, J.P. Morgan and Sixty Wall Street. The 52,000
shares of Series B Preferred Stock are convertible into 11,555,555 shares of
Common Stock representing 19.8% of the outstanding Common Stock immediately
prior to issuance. At that time, the Company agreed to issue an additional
48,000 shares of Series B Preferred Stock to the same purchasers subject to
obtaining stockholder approval of such issuance pursuant to The New York Stock
Exchange rules. Even if stockholder approval of the issuance of the additional
48,000 shares of Series B Preferred Stock were not obtained, the initial 52,000
shares of Series B Preferred Stock would remain outstanding.
Paragraph 312.03(b) requires stockholder approval prior to the issuance of
securities convertible into common stock to a substantial security holder,
director or officer if the number of shares of common stock into which the
securities may be convertible exceeds either one percent of the number of shares
of common stock or voting power outstanding before the issuance or, if the
issuance of such securities is to a substantial security holder, five percent of
the number of shares of common stock or voting power outstanding before issuance
where the issuance relates to a sale of stock for cash at a price at least as
great as each of the book and market value of the issuer's common stock. The
issuance of shares of Series B Preferred Stock to DB Capital, J.P. Morgan and
Sixty Wall Street, as part of the issuance of 48,000 shares after stockholder
approval is obtained pursuant to paragraph 312.03(c), may require stockholder
approval pursuant to paragraph 312.03(b).
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The following summary of the provisions of the Preferred Stock Purchase
Agreement, dated August 2, 2000 (the "Purchase Agreement"), by and among the
Company, NR2 Holdings, DB Capital, J.P. Morgan, and Sixty Wall Street, the
Certificate of Designation of Convertible Preferred Stock, Series B, filed with
the Delaware Secretary of State on August 2, 2000 (the "Certificate of
Designation") and the Registration Rights Agreement, dated August 2, 2000 (the
"Registration Rights Agreement"), by and among the Company, NR2 Holdings, DB
Capital, J.P. Morgan, Sixty Wall Street, James L. Kirk, H. Wayne Huizenga and
the holders of the Series A Preferred Stock, is qualified in its entirety by
reference to such documents which are incorporated herein by reference. The
Purchase Agreement, the Registration Rights Agreement and the Certificate of
Designation have been included as exhibits to the Company's Form 10-Q for the
quarter ended June 30, 2000, which has been filed with the Securities and
Exchange Commission and a copy of such documents can be obtained by writing or
calling Joseph H. Izhakoff, Vice President, General Counsel and Secretary,
NationsRent, Inc., 450 East Las Olas Boulevard, Fort Lauderdale, Florida 33301,
telephone: 954-760-6550.
GENERAL DESCRIPTION OF THE TRANSACTION
Pursuant to the Purchase Agreement, the Company agreed to issue 100,000
shares of Series B Preferred Stock to NR2 Holdings, DB Capital, J.P. Morgan and
Sixty Wall Street (together, the "Purchasers"), for an aggregate purchase price
of $100,000,000 (the "Transaction") at two separate closings. On August 2, 2000,
the Company issued 52,000 shares of Series B Preferred Stock to the Purchasers,
(the "First Closing") consisting of 10,400 shares to NR2 Holdings, 20,800 shares
to DB Capital, 15,600 shares to J.P. Morgan and 5,200 shares to Sixty Wall
Street (collectively, the "First Series B Preferred Shares") for an aggregate
cash purchase price of $52,000,000, consisting of $10,400,000 from NR2 Holdings,
$20,800,000 from DB Capital, $15,600,000 from J.P. Morgan and $5,200,000 from
Sixty Wall Street (collectively, the "First Purchase Price"). At the second
closing, the Company will issue an aggregate of 48,000 additional shares of
Series B Preferred Stock to the Purchasers (the "Second Closing") consisting of
9,600 shares to NR2 Holdings, 19,200 shares to DB Capital, 14,400 shares to J.P.
Morgan and 4,800 shares to Sixty Wall Street (collectively, the "Second Series B
Preferred Shares") for a cash purchase price of an aggregate of $48,000,000,
consisting of $9,600,000 from NR2 Holdings, $19,200,000 from DB Capital,
$14,400,000 from J.P. Morgan and $4,800,000 from Sixty Wall Street
(collectively, the "Second Purchase Price").
The issuance and purchase of the Second Series B Preferred Shares will take
place at the Second Closing to be held on the third business day after the
conditions to the Second Closing have been satisfied or waived or on such other
date as the parties may agree. At the Second Closing, subject to the terms and
conditions set forth in the Purchase Agreement, the Company will deliver to each
Purchaser the Second Series B Preferred Shares to be purchased by it in exchange
for the Second Purchase Price.
The shares of Series B Preferred Stock issued or to be issued in the
Transaction are unregistered and are subject to transfer restrictions imposed by
the Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the
Registration Rights Agreement, the Purchasers have been granted certain rights
to require the Company to register their shares of Series B Preferred Stock for
resale in the future. See "-- The Registration Rights Agreement."
Consummation of the Second Closing is conditioned on the approval of the
issuance of the Second Series B Preferred Shares by the Company's stockholders
at the Special Meeting. Based on its evaluation of the Transaction, the Board of
Directors has recommended that the Company's stockholders vote in favor of the
issuance to NR2 Holdings, DB Capital, J.P. Morgan and Sixty Wall Street of the
shares of Series B Preferred Stock and the issuance of shares of Common Stock
upon the conversion of such Series B Preferred Stock. In the event that the
Company does not obtain such stockholder approval, the Company is not required
to, and will not, consummate the Second Closing.
The Company has used the net proceeds from the sale of the 52,000 shares of
Series B Preferred Stock to repay certain amounts outstanding under its senior
credit facilities. The Company anticipates using the net proceeds from the sale
of the 48,000 shares of Series B Preferred Stock to pay off certain
indebtedness, for capital expenditures and for other general corporate purposes
(including, without limitation, advertising and branding of its stores).
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VOTING AGREEMENTS
NR Holdings Limited and NR Investments Limited, who hold all of the issued
and outstanding shares of the Series A Preferred Stock, H. Family Investments,
Inc., Huizenga Investments Limited Partnership and Kirk Holdings Limited
Partnership have agreed to vote all the shares of Common Stock beneficially
owned by them in favor of the proposals to be brought before the Special
Meeting. These parties beneficially own shares of Common Stock and Series A
Preferred Stock representing approximately 55% of the voting power of the
outstanding shares of Common Stock and Series A Preferred Stock entitled to be
cast at the Special Meeting.
TERMS OF THE SERIES B PREFERRED STOCK
Set forth below is a summary of certain terms of the Series B Preferred
Stock. This summary is not complete and is qualified in its entirety by
reference to the Certificate of Designation for the Series B Preferred Stock.
Ranking
With respect to distributions upon the liquidation, winding-up and
dissolution of the Company, the Series B Preferred Stock will rank (i) senior to
all classes of common stock of the Company, and each class of capital stock or
series of preferred stock established after August 2, 2000, the terms of which
do not expressly provide that such class or series ranks senior to or on parity
with the Series B Preferred Stock as to dividend distributions and distributions
upon the liquidation, winding-up and dissolution of the Company, (ii) on a
parity with the Series A Preferred Stock and on a priority with any additional
shares of Series B Preferred Stock issued by the Company in the future and any
other class of capital stock or series of preferred stock established after
August 2, 2000, the terms of which expressly provide that such class or series
will rank on a parity with the Series B Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company, and (iii) junior to each class of capital stock or series of
preferred stock issued by the Company established after August 2, 2000 the terms
of which expressly provide that such class or series will rank senior to the
Series B Preferred Stock as to dividend distributions and/or distributions upon
the liquidation, winding-up and dissolution of the Company.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding-up of
the Company, each holder of Series B Preferred Stock will be entitled to payment
out of the assets of the Company available for distribution of an amount equal
to $1,000 per share of Series B Preferred Stock held by such holder (the
"Liquidation Preference"), plus accrued and unpaid dividends, if any, to the
date fixed for liquidation, dissolution or winding-up, before any distribution
is made on the Common Stock. After payment in full of the Liquidation Preference
and such dividends, if any, to which holders of Series B Preferred Stock are
entitled, such holders will not be entitled to any further participation in any
distribution of assets of the Company.
Dividends
The Series B Preferred Stock will not have a stated dividend other than
upon a Change in Control as described below. However, in the event that the
Company declares or pays any dividends or other distributions upon the Common
Stock other than dividends paid in shares of Common Stock, the Company must also
declare and pay to the holders of the Series B Preferred Stock, at the same time
that it declares and pays such dividends or other distributions to the holders
of the Common Stock, the dividends or distributions which would have been
declared and paid with respect to the Common Stock issuable upon conversion of
the Series B Preferred Stock had all of the outstanding shares of Series B
Preferred Stock been converted immediately prior to the record date for such
dividend or distribution, or if no record date is fixed, the date as of which
the record holders of Common Stock entitled to such dividends or distributions
are determined.
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Conversion Rights
Subject to possible adjustment as described below, each share of Series B
Preferred Stock is convertible into 222.2 shares of Common Stock (representing a
conversion price of $4.50 per share of Common Stock based on the Liquidation
Preference of $1,000 per share of Series B Preferred Stock).
The Certificate of Designation provides that the conversion price and the
number and kind of securities or rights into which the Series B Preferred Stock
is convertible are subject to certain anti-dilution adjustments upon the
occurrence of any of the following events:
- a distribution in the form of Common Stock is made on any class of
capital stock of the Company (see subsection 3(vi) of the Certificate of
Designation);
- the outstanding shares of Common Stock are subdivided into a greater
number of shares of Common Stock or combined into a smaller number of
shares of Common Stock (see subsection 3(vii) of the Certificate of
Designation); or
- a consolidation or merger of the Company, the sale or transfer of all or
substantially all of the assets of the Company, or a capital
reorganization or reclassification, conversion or exchange of shares of
Common Stock (see subsection 3(xv) of the Certificate of Designation).
Redemption or Automatic Conversion
The Company has no obligation to redeem or repurchase the Series B
Preferred Stock, other than upon a Change in Control as described below.
In the event of a Change in Control that is not in connection with an
acquisition that is accounted for under the "pooling-of-interests" method of
generally accepted accounting principles and that has been approved or publicly
recommended by the Board of Directors, the Company must offer to purchase,
within 20 business days after the Change in Control (or concurrently with the
effectiveness of the Change in Control if the Company is not the surviving
entity in such transaction), all of the then outstanding shares of Series B
Preferred Stock at a purchase price per share, in cash, equal to the Liquidation
Preference thereof plus an amount equal to 8.00% of the Liquidation Preference,
compounded annually from the date of issuance of such share to the purchase date
(the "Call Price").
In the event of a Change in Control that is not in connection with an
acquisition that is accounted for under the "pooling-of-interests" method of
generally accepted accounting principles and that has not been approved or
publicly recommended by the Board of Directors, the Company may, at its option,
offer to purchase for cash all of the then outstanding shares of Series B
Preferred Stock in the same manner as described above. However, if the Company
elects not to make such an offer, the holders of Series B Preferred Stock will
have, as an alternative to their normal conversion right, the right to convert
their shares of Series B Preferred Stock into a number of shares of Common Stock
equal to 110% of the Call Price per share of Series B Preferred Stock divided by
the closing price of the Common Stock at the close of business on the business
day prior to the expiration of the tender offer, or if the Change in Control
does not result from a tender offer, the business day prior to the effective
time of the Change in Control. Further, immediately following the Change in
Control, the Liquidation Preference of all shares of Series B Preferred Stock
that were not converted shall automatically increase to an amount equal to 110%
of the Call Price and the holders will be entitled to receive dividends at the
rate of 8% per year.
In the event of a Change in Control that is an acquisition that is
accounted for under the "pooling-of-interests" method of generally accepted
accounting principles, then, upon the occurrence of the Change in Control, all
of the then outstanding Series B Preferred Stock will be automatically converted
into Common Stock having a market value equal to 110% of the Call Price, valued
at the closing price of the Common Stock at the close of business on the
business day prior to the effective date of the Change in Control.
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The Certificate of Designation defines a Change in Control as the
occurrence of any of the following events:
- a person or group becomes the beneficial holder of more than 50% of the
total voting stock of the company. An acquisition of more than 50% of the
stock by Messrs. Kirk or Huizenga, H. Family Investments, Inc. or any
holder of Series B Preferred Stock will not be a Change in Control,
unless, in the case of Messrs. Kirk and Huizenga and H. Family
Investments, the event causes the Common Stock to no longer be listed on
a national securities exchange or quoted on NASDAQ; or
- a merger of the Company or a sale or other disposition of all or
substantially all of the Company's assets where the holders of voting
stock of the Company prior to the transaction do not own more than 50% of
the voting power of the voting stock of the entity surviving the
transaction, or to which the assets were transferred.
Redemption at the Option of the Company
At any time after the first anniversary of the issuance of the Series B
Preferred Stock, the Company may, at its election, redeem, in whole but not in
part, the shares of then outstanding Series B Preferred Stock at a purchase
price in cash per share of Common Stock issuable upon conversion of the Series B
Preferred Stock equal to $9.00 compounded annually at the rate of 20% per annum
for the period from the first anniversary of the issuance of the Series B
Preferred Stock up to and including the date of redemption.
Voting
General Voting Rights. The holders of Series B Preferred Stock are
entitled to vote (or act by written consent) together with the holders of the
Common Stock and the Series A Preferred Stock on all matters submitted to
stockholders of the Company for a vote (or for action) except where holders of
Series B Preferred Stock are entitled to vote separately as a class (as provided
below) and except as otherwise required by applicable law. Each share of Series
B Preferred Stock is entitled to one vote for each share of Common Stock
issuable upon conversion of such share of Series B Preferred Stock. Except as
provided below under "-- Class Voting Rights," the holders of the Series B
Preferred Stock are not entitled to vote as a separate class on any matter to be
voted on by stockholders of the Company.
Class Voting Rights. The Company may not, without the affirmative vote or
consent of the holders of at least two-thirds of the shares of Series B
Preferred Stock then outstanding, voting or consenting as the case may be, as a
separate class, take certain actions specified in the Certificate of
Designation, including, among others:
- authorize, create or issue any Senior Securities (as defined in the
Certificate of Designation) or any obligation or security convertible
into or evidencing a right to purchase any Senior Securities;
- authorize an amendment or waiver of the Certificate of Designation or the
Certificate of Incorporation which would (i) alter the voting rights of
Series B Preferred Stock or reduce the number of shares of Series B
Preferred Stock that must consent to an amendment, supplement or waiver
of the Certificate of Designation; (ii) reduce the Liquidation Preference
or alter the provisions relating to redemption of the Series B Preferred
Stock; (iii) alter the conversion rights of the holders of Series B
Preferred Stock; (iv) reduce the rate of or change the time for payment
of dividends on the Series B Preferred Stock; (v) waive the consequences
of any failure to pay dividends; (vi) make any shares of Series B
Preferred Stock payable other than as stated in the Certificate of
Designation; (vii) change the provisions of the Certificate of
Designation relating to waivers of rights of holders of Series B
Preferred Stock to receive the Liquidation Preference and dividends;
(viii) waive a redemption payment on Series B Preferred Stock, (ix)
change the foregoing amendment and waiver provisions of the Certificate
of Designation; or (x) require the prior vote of the holders of Series B
Preferred Stock as a separate class under the Delaware General
Corporation Law;
- waive compliance with any provision of the Certificate of Designation;
7
<PAGE> 11
- make repurchases of, optional redemptions of and/or tender offers for,
the capital stock of the Company the aggregate fair market value of which
exceeds 5% of the Company's market capitalization (determined as provided
in the Certificate of Designation) during any 12-month period that occurs
in whole or in part during the first five years after August 2, 2000; or
- except for a transaction constituting a Change in Control, merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the Company's assets to, any person unless,
if the Company is not the Surviving Person (as defined in the Certificate
of Designation), the Series B Preferred Stock is converted into or
exchanged for and becomes shares of such Surviving Person, having the
same (or more favorable) powers, preferences and relative, participating,
optional or other special rights as the Series B Preferred Stock had
immediately prior to such transaction.
Voting for Directors. In the election of directors of the Company, the
holders of the Series B Preferred Stock, voting separately as a single class to
the exclusion of all other classes or series of the Company's capital stock,
may:
- elect two members of the Company's board of directors provided that on
the record date for such vote, DB Capital, J.P. Morgan, Investcorp and
their affiliates have voting and dispositive power with respect to at
least 66,666 shares of Series B Preferred Stock;
- elect one member of the Company's board of directors provided that on the
record date for such vote, DB Capital, J.P. Morgan, Investcorp and their
affiliates have voting and dispositive power with respect to at least
33,333 shares of Series B Preferred Stock (but less than 66,666 shares of
Series B Preferred Stock); or
- elect one member of the Company's board of directors provided that on the
record date for such vote, DB Capital and its affiliates, J.P. Morgan and
its affiliates, or Investcorp and its affiliates have voting and
dispositive power with respect to at least 25,000 shares of Series B
Preferred Stock (but less than 33,333 shares of Series B Preferred
Stock).
If on the record date for a vote for directors, DB Capital, J.P. Morgan,
Investcorp and their affiliates do not have voting and dispositive power as
outlined in the immediately preceding paragraphs to elect directors as a
separate class, then the holders of Series B Preferred Stock shall be entitled
to vote for the election of directors voting together with the holders of the
Common Stock as a single class, with each share of Common Stock entitled to one
vote per share and each share of Series B Preferred Stock entitled to one vote
for each share of Common Stock issuable upon conversion of the Series B
Preferred Stock, respectively.
The Purchasers have agreed to vote their shares of Series B Preferred Stock
for nominees to the Company's Board of Directors designated by certain
Purchasers in accordance with the Preferred Stockholders Agreement. See "-- The
Preferred Stockholders Agreement."
Preemptive Rights. Provided the holders of Series B Preferred Stock are
entitled to elect as a class at least one member of the Company's Board of
Directors pursuant to the Certificate of Designation, then the holders of at
least 15,000 shares of Series B Preferred Stock shall have preemptive rights to
purchase or subscribe to purchase any capital stock of the Company, or any
obligation or security convertible or exchangeable into or evidencing the right
to purchase any capital stock of the Company, offered from time to time by the
Company for cash in a public offering or private placement (other than any such
capital stock or obligation or security issued or issuable as consideration in a
business combination or as compensation to an employee, consultant or
otherwise).
BOARD REPRESENTATION
Pursuant to the Purchase Agreement, the Company's Board of Directors is
required to increase the size of the Board from eight to ten members and appoint
two persons designated by DB Capital and J.P. Morgan, Robert G. Sharp and Simon
C. Moore, respectively, as directors to serve until the next annual meeting of
stockholders.
8
<PAGE> 12
TRANSFER RESTRICTIONS
The shares of Series B Preferred Stock will not be registered under federal
or state securities laws and will bear a legend to such effect. Under such laws,
the shares of Series B Preferred Stock may not be offered, sold or transferred
except (i) pursuant to an exemption from registration under the Securities Act
and such other applicable laws, or (ii) pursuant to an effective registration
statement under the Securities Act. The Purchasers will have certain rights to
require the Company to register the shares of Series B Preferred Stock in the
future in accordance with the Registration Rights Agreement. See "-- The
Registration Rights Agreement." Further, the Purchasers and the holders of the
Series A Preferred Stock have certain tag-along rights in connection with future
sales of shares of Series A Preferred Stock, Series B Preferred Stock or Common
Stock by other Purchasers or by the holders of the Series A Preferred Stock
pursuant to the Preferred Stockholders Agreement. See "-- The Preferred
Stockholders Agreement." Pursuant to the Purchase Agreement, each of NR2
Holdings, DB Capital and J.P. Morgan has agreed that it or an affiliate will
maintain control of a majority of the voting and dispositive power of the Series
B Preferred Stock purchased by it or an affiliate.
INDEMNIFICATION
The Company has agreed to indemnify and hold harmless each Purchaser and
their respective affiliates, agents, partners, officers and employees from any
and all losses, liabilities, damages, judgments, settlements and expenses that
arise out of any breach by the Company of any of its representations, warranties
or covenants in the Purchase Agreement or in the Registration Rights Agreement.
CONDITIONS TO THE PURCHASERS' OBLIGATION TO CLOSE AT THE SECOND CLOSING
The obligation of each Purchaser to purchase the Second Series B Preferred
Shares at the Second Closing is subject to the satisfaction or waiver of the
following conditions:
- The representations and warranties of the Company contained in the
Purchase Agreement shall be true and correct when made and at the time of
the Second Closing, except where the failure of such representations and
warranties to be so true and correct would not individually or in the
aggregate have a material adverse effect, and the Company shall have
delivered a certificate to such effect;
- The Company shall have performed and complied with all agreements and
conditions contained in the Purchase Agreement required to be performed
or complied with by it prior to or at the Second Closing and the Company
shall have delivered a certificate to such effect; and
- The Company shall have obtained approval of its stockholders of the
transactions contemplated by the Purchase Agreement, in accordance with
the requirements of The New York Stock Exchange.
FEES AND EXPENSES
The Company paid to each of the Purchasers or an affiliate of each of the
Purchasers at the First Closing a fee equal to 4% of the First Purchase Price
for the First Series B Preferred Shares purchased by that Purchaser and will pay
to each of the Purchasers or an affiliate of each of the Purchasers at the
Second Closing a fee equal to 4% of the Second Purchase Price for the Second
Series B Preferred Shares purchased by that Purchaser. In addition, the Company
is required to reimburse the Purchasers for up to $400,000 of out-of-pocket
expenses incurred by the Purchasers in connection with the transactions
contemplated by the Purchase Agreement.
THE REGISTRATION RIGHTS AGREEMENT
In connection with the Transaction, the Company, the Purchasers, the
holders of the Series A Preferred Stock and certain beneficial owners of shares
of Common Stock entered into the Registration Rights Agreement. Pursuant to the
Registration Rights Agreement, the Purchasers are entitled to certain demand and
piggyback registration rights with respect to the shares of Common Stock
issuable upon conversion of the shares of Series B Preferred Stock. The holders
of 25% (by number of shares) of Registrable Securities (as
9
<PAGE> 13
defined in the Registration Rights Agreement) acquired by the Purchasers in the
Transaction or the holders of Registrable Securities with a market value of $25
million on the day preceding the request, will generally be entitled to request
that a registration statement be filed with the Securities and Exchange
Commission for the resale of shares of Common Stock issuable upon the conversion
of the Series B Preferred Stock. Such demand registrations will be limited to
three occasions. The Company will generally not be obligated to effect any such
registration during certain periods prior to or after underwritten public
offerings by the Company or if the Company determines in good faith that such
registration would require premature disclosure of certain material corporate
developments. The holders of Registrable Securities will also generally be
entitled to piggyback registration rights in connection with underwritten public
offerings by the Company or other selling stockholders.
In addition, for five years following the Second Closing, the Purchasers
and the holders of the Series A Preferred Stock will have "tag-along rights"
entitling them to participate on a pro-rata basis in certain sales of Common
Stock by Mr. Kirk or Mr. Huizenga or members of their immediate families. The
tag-along rights only apply to sales of Common Stock that exceed 2% of the
shares of Common Stock outstanding on a fully-diluted basis. The tag-along
rights do not apply to underwritten offerings, transfers for tax or estate
planning purposes or any pledge as security in a bona fide loan transaction.
THE PREFERRED STOCKHOLDERS AGREEMENT
In connection with the Transaction, the Purchasers and the holders of the
Series A Preferred Stock entered into the Preferred Stockholders Agreement.
Pursuant to the Preferred Stockholders Agreement, when the holders of the Series
B Preferred Stock are entitled to elect two members of the Company's Board of
Directors pursuant to the Certificate of designation, the Purchasers have agreed
to vote their shares of Series B Preferred Stock for one person designated by DB
Capital and one person designated by J.P. Morgan. When the holders of the Series
B Preferred Stock are entitled to elect one member of the Company's Board of
Directors pursuant to the Certificate of Designation, the Purchasers have agreed
to vote their shares in accordance with the terms of the Preferred Stockholders
Agreement depending on the number of shares of Series B Preferred Stock then
held by the Purchasers. The initial designees of DB Capital and J.P. Morgan are
Robert G. Sharp and Simon Moore, respectively.
In addition, the Purchasers and the holders of the Series A Preferred Stock
will have "tag-along rights" entitling them to participate on a pro-rata basis
in certain sales of Series A Preferred Stock, Series B Preferred Stock or Common
Stock by the other Purchasers and the holders of the Series A Preferred Stock.
The tag-along rights only apply to sales that exceed 1% of the shares of Common
Stock outstanding on a fully-diluted basis. The tag-along rights do not apply to
underwritten offerings or sales by NR2 Holdings to Investcorp or their
affiliates, or any sale by any other Purchaser to an affiliate of such
Purchaser.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS PROPOSAL UNLESS
CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
10
<PAGE> 14
PROPOSAL NO. 2
TO APPROVE THE FUTURE ISSUANCE OF COMPANY SECURITIES
TO THE HOLDERS OF THE SERIES B PREFERRED STOCK
PURSUANT TO THEIR PREEMPTIVE RIGHTS
The Company is seeking stockholder approval, pursuant to Paragraph
312.03(b) of The New York Stock Exchange Listed Company Manual, of the future
issuance of Common Stock or securities convertible into or exercisable for
Common Stock to the holders of the Series B Preferred Stock from time to time
pursuant to their exercise of the preemptive rights to which the they are
entitled under the Certificate of Designation, or to transferees of such holders
that are permitted by the Certificate of Designation. Paragraph 312.03(b)
requires stockholder approval prior to the issuance of common stock, or
securities convertible into or exercisable for common stock, to a substantial
security holder, director or officer if the number of shares of common stock to
be issued, or if the number of shares of common stock into which the securities
may be convertible or exercisable, exceeds either one percent of the number of
shares of common stock or voting power outstanding before the issuance or, if
the issuance of such securities is to a substantial security holder, five
percent of the number of shares of common stock or voting power outstanding
before issuance where the issuance relates to a sale of stock for cash at a
price at least as great as each of the book and market value of the issuer's
common stock. In the event the holders of the Series B Preferred Stock elect to
exercise their preemptive rights, which are described below, the issuance of
securities to them, or their permitted transferees, by the Company pursuant to
such exercise may require prior stockholder approval pursuant to Paragraph
312.03(b). The Company is hereby seeking advance stockholder approval of any
such future issuance or issuances that may require such approval.
The following summary of the preemptive rights is qualified in its entirety
by reference to the provisions of the Certificate of Designation which is
incorporated herein by reference. The Certificate of Designation for the Series
B Preferred Stock provides that as long as holders of Series B Preferred Stock
are entitled to elect at least one director of the Company, then such holders
who hold at least 15,000 shares of Series B Preferred Stock shall have
preemptive rights to purchase or subscribe to purchase any capital stock of the
Company, or any obligation or security convertible or exchangeable into or
evidencing the right to purchase any capital stock of the Company, offered from
time to time by the Company for cash in a public offering or private placement,
other than any such capital stock or obligation or security issued or issuable
as consideration in a business combination or as compensation to an employee,
consultant or otherwise. Each holder of Series B Preferred Stock shall have the
right to purchase its proportionate share of such securities based on the ratio
which the Common Stock of the Company owned by or issuable to such holder upon
conversion of any Series B Preferred Stock owns bears to all the issued and
outstanding shares of Common Stock of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROXY CARDS EXECUTED AND RETURNED WILL BE VOTED FOR THIS PROPOSAL UNLESS
CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
11
<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of August 11, 2000, information with
respect to the beneficial ownership of the Common Stock by (1) each executive
officer of the Company for whom executive compensation disclosure is required by
Item 402 of Regulation S-K and each of the Company's directors, (2) all of the
Company's directors and executive officers as a group and (3) each person or
entity known to the Company to beneficially own more than 5% of the outstanding
shares of Common Stock. Unless otherwise indicated, each such stockholder has
sole voting and investment power with respect to the shares beneficially owned
by such stockholder. Percentages of shares beneficially owned are based upon
58,352,704 shares of Common Stock outstanding as of August 11, 2000 plus for
each person named below any shares of Common Stock that may be acquired by such
person within 60 days of such date upon exercise of outstanding options or other
rights.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OWNED COMMON STOCK
---- ---------------- ------------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
James L. Kirk............................................. 12,199,265(1)(2) 20.8%
Gene J. Ostrow............................................ 622,400(3) 1.1%
Philip V. Petrocelli...................................... 340,762(4) *
Joseph H. Izhakoff........................................ 91,250(5) *
H. Wayne Huizenga......................................... 1,702,047(1)(6) 2.9%
Harris W. Hudson.......................................... 1,033,650(7) 1.8%
Gary L. Gabriel........................................... 481,250(8) *
Thomas H. Bruinooge....................................... 107,092(9) *
Christopher J. O'Brien.................................... 85,000(10) *
Ivan W. Gorr.............................................. 65,700(10) *
All executive officers and directors as a group (13
persons)................................................ 17,301,714(11) 28.4%
BENEFICIAL STOCKHOLDERS
Investcorp S.A............................................ 19,441,658(12)(13) 25.0%
6 Rue Adolph Fischer
L-1520 Luxembourg
H. Family Investments, Inc................................ 12,000,000(1)(14) 20.6%
450 East Las Olas Boulevard
Ft. Lauderdale, Florida 33301
NR Holdings Limited....................................... 11,285,714(15) 16.2%
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Islands, B.W.I
DB Capital Investors, L.P................................. 8,888,889(13)(16) 13.2%
130 Liberty Street, 25th Floor
New York, New York 10006
J.P. Morgan Capital Corporation........................... 8,888,889(13)(17) 13.0%
60 Wall Street, 14th Floor
New York, New York 10260
Don R. O'Neal............................................. 5,019,531(18) 8.6%
450 East Las Olas Boulevard
Ft. Lauderdale, Florida 33301
NR2 Holdings Limited...................................... 4,444,444(13)(19) 7.1%
West Wind Building
P.O. Box 1111
Harbour Drive
Grand Cayman, Cayman Island, B.W.I
</TABLE>
---------------
* Less than 1%
(1) H. Family Investments, Inc., a Florida corporation ("HFI"), Huizenga
Investments Limited Partnership, a Nevada limited partnership controlled by
Mr. Huizenga ("HILP") and Kirk Holdings Limited Partnership, a Nevada
limited partnership controlled by Mr. Kirk ("KHLP"), have entered into
separate voting agreements to vote their shares for the proposals to be
acted upon at the Special Meeting. HFI, HILP and KHLP may be deemed to be a
group for purposes of Rule 13d-5(b)(1) under the
12
<PAGE> 16
Securities Exchange Act of 1934 (the "Exchange Act"). Accordingly, the
group may be deemed to be the beneficial owner of the shares of Common
Stock beneficially owned by each member of the 13D group, or an aggregate
of 25,901,312 shares of Common Stock.
(2) 11,999,265 of these shares are held by KHLP. Includes 200,000 shares of
Common Stock issuable upon exercise of options, which are exercisable
within 60 days.
(3) Includes 93,750 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(4) Includes 216,986 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(5) Includes 91,250 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(6) 1,632,047 of these shares are held by HILP. Also includes 70,000 shares of
Common Stock issuable upon exercise of options, which are immediately
exercisable. The number of shares of Common Stock beneficially owned by Mr.
Huizenga does not include the 12,000,000 shares of Common Stock held by HFI
because Mr. Huizenga does not share voting or dispositive control of such
shares and disclaims beneficial ownership of such shares.
(7) Includes 250,000 shares of Common Stock owned by Mr. Hudson's spouse, as to
which Mr. Hudson disclaims beneficial ownership. Also includes 70,000
shares of Common Stock issuable upon exercise of options, which are
immediately exercisable.
(8) Includes 411,250 shares of Common Stock issuable upon conversion of
convertible promissory notes in an aggregate principal amount of $3.29
million, which are convertible at a price of $8.00 per share of Common
Stock. Also includes 70,000 shares of Common Stock issuable upon exercise
of options, which are immediately exercisable.
(9) Includes 70,000 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(10) Includes 60,000 shares of Common Stock issuable upon exercise of options,
which are immediately exercisable.
(11) Includes (a) an aggregate of 1,856,712 shares of Common Stock issuable upon
exercise of options held by certain executive officers and directors, which
are immediately exercisable and (b) 661,250 shares of Common Stock issuable
upon conversion of convertible promissory notes beneficially owned by
certain executive officers and directors.
(12) Investcorp S.A. does not directly own any shares of Common Stock or
Preferred Stock. Includes 14,285,714 shares of Common Stock issuable upon
conversion of 100,000 shares of Series A Preferred Stock that Investcorp
S.A. may be deemed to beneficially own, 79,000 shares of which are owned by
NR Holdings and 21,000 shares of which are owned by NR Investments. Also
includes 4,444,444 shares of Common Stock issuable upon conversion of
20,000 shares of Series B Preferred Stock that Investcorp S.A. may be
deemed to beneficially own, which shares are owned by NR2 Holdings. The
voting securities of NR Holdings, NR Investments and NR2 Holdings are owned
by certain persons and/or entities which indirectly are managed by
affiliates of Investcorp (the "Managed Entities") through revocable
management services or similar agreements between such persons and/or
entities or their shareholders or principals and an affiliate of Investcorp
S.A. pursuant to which each such person or entity indirectly has granted
such affiliate of Investcorp the authority to direct the voting of the
voting securities of NR Holdings, NR Investments and/or NR2 Holdings for so
long as such agreement is in effect. Also includes 711,500 shares of Common
Stock which Investcorp S.A. may be deemed to beneficially own, which are
directly held by REF Equity Limited ("REF") on behalf of certain entities
(the "REF Managed Entities"), which indirectly are managed by affiliates of
Investcorp S.A. through revocable management services or similar agreements
between such entities or their shareholders or principals and an affiliate
of Investcorp pursuant to which each such entity indirectly has granted
such affiliate the authority to direct the voting and disposition of its
equity interests in REF for so long as such agreement is in effect. Sipco
Limited ("Sipco") may be deemed to be the beneficial owner of the shares of
Common Stock beneficially owned by Investcorp S.A. Sipco, which is a
passive holding company entity without operations or employees, may be
deemed to control Investcorp S.A. through its ownership of a majority of
the stock of a company which indirectly owns a majority of the outstanding
stock of Investcorp.
(13) As the result of a voting agreement entered into by the Purchasers pursuant
to the Preferred Stockholders Agreement, the Purchasers are a group for
purposes of Rule 13d-5(b)(1) under the Exchange Act. Accordingly, the group
is deemed to be the beneficial owner of the shares of Series B Preferred
Stock beneficially owned by each member of the 13D group, or an aggregate
of 100,000 shares of Series B Preferred Stock which are convertible into
22,222,222 shares of Common Stock.
(14) HFI is a Florida corporation controlled by H. Wayne Huizenga, Jr., the son
of Mr. Huizenga.
(15) Represents shares of Common Stock issuable upon conversion of 79,000 shares
of Series A Preferred Stock held by NR Holdings. NR Holdings shares voting
and dispositive power with respect to these shares with Investcorp S.A.,
Sipco and the Managed Entities. See footnote (12) above.
(16) Represents shares of Common Stock issuable upon conversion of 40,000 shares
of Series B Preferred Stock beneficially owned by DB Capital. DB Capital
shares beneficial ownership of such shares with Taunus Corporation, DB
Capital Partners, Inc. and DB Capital Partners, L.P. Taunus Corporation may
be deemed to control DB Capital because DB Capital is an indirect
wholly-owned subsidiary of Taunus Corporation. DB Capital Partners, L.P. is
the general partner of DB Capital and DB Capital Partners, Inc. is the
general partner of DB Capital Partners, L.P. Includes 4,266,667 shares of
Common Stock issuable upon conversion of shares of Series B Preferred Stock
that DB Capital has the right (and obligation) to acquire at the Second
Closing pursuant to the Purchase Agreement, because satisfaction of the
only material condition to such acquisition, the approval of the issuance
of such shares by the Company's stockholders, is assured. See "Proposal No.
1 -- Voting Agreements" above.
(17) Represents 6,666,667 shares of Common Stock issuable upon conversion of
30,000 shares of Series B Preferred Stock beneficially owned by J.P. Morgan
and 2,222,222 shares of Common Stock issuable upon conversion of 10,000
shares of Series B Preferred Stock held or to be acquired by Sixty Wall
Street, an affiliate of J.P. Morgan. J.P. Morgan and Sixty Wall Street
share beneficial ownership of each of their respective shares with J.P.
Morgan & Co. Incorporated. J.P. Morgan & Co. Incorporated may be deemed to
control J.P. Morgan because J.P. Morgan is an indirect wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated. J.P. Morgan & Co.
Incorporated may also be deemed to control Sixty Wall Street because Sixty
Wall Street Corporation, which is the general partner of Sixty Wall Street,
is an indirect wholly-owned subsidiary of J.P. Morgan & Co. Incorporated.
Includes 3,200,000
13
<PAGE> 17
shares of Common Stock issuable upon conversion of shares of Series B
Preferred Stock that J.P. Morgan has the right (and obligation) to acquire
at the Second Closing pursuant to the Purchase Agreement, because
satisfaction of the only material condition to such acquisition, the
approval of the issuance of such shares by the Company's stockholders, is
assured. See "Proposal No. 1 -- Voting Agreements" above. Also includes
1,066,667 shares of Common Stock issuable upon conversion of shares of
Series B Preferred Stock that Sixty Wall Street has the right (and
obligation) to acquire at the Second Closing pursuant to the Purchase
Agreement, because satisfaction of the only material condition to such
acquisition, the approval of the issuance of such shares by the Company's
stockholders, is assured. See "Proposal No. 1 -- Voting Agreements" above.
(18) Includes 775,180 shares of Common Stock owned by Mr. O'Neal's spouse, as to
which Mr. O'Neal disclaims beneficial ownership. Also includes 2,452,564
shares of Common Stock in the name of the 1997 Ray L. O'Neal and Ellen M.
O'Neal irrevocable trust for Don R. O'Neal of which Mr. O'Neal is a
trustee. Mr. O'Neal served as President of the Company from October 1998
until May 2000.
(19) Represents shares of Common Stock issuable upon conversion of 20,000 shares
of Series B Preferred Stock beneficially owned by NR2 Holdings. NR2
Holdings shares voting and dispositive power with respect to these shares
with Investcorp S.A., Sipco and the Managed Entities. See footnote (12)
above. Includes 2,133,333 shares of Common Stock issuable upon conversion
of shares of Series B Preferred Stock that NR2 Holdings has the right (and
obligation) to acquire at the Second Closing pursuant to the Purchase
Agreement, because satisfaction of the only material condition to such
acquisition, the approval of the issuance of such shares by the Company's
stockholders, is assured. See "Proposal No. 1 -- Voting Agreements" above.
STOCKHOLDER PROPOSALS
In accordance with the rules promulgated by the Securities and Exchange
Commission, any stockholder who wishes to submit a proposal for inclusion in the
proxy material to be distributed by the Company in connection with the 2001
Annual Meeting of Stockholders must do so no later than December 31, 2000. Any
such proposal should be submitted in writing to the Secretary of the Company at
its principal executive offices, 450 East Las Olas Boulevard, Suite 1400, Fort
Lauderdale, Florida 33301, Attention: Joseph H. Izhakoff, Vice President,
General Counsel and Secretary.
14
<PAGE> 18
1797-PS-SPEC
<PAGE> 19
[LOGO]
NATIONSRENT, INC.
450 EAST LAS OLAS BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of NATIONSRENT, INC., a Delaware corporation (the
"Company"), hereby appoints James L. Kirk and Gene J. Ostrow, or either of them,
the proxy or proxies of the undersigned, each with full power of substitution,
to vote all shares of Common Stock and Series A Convertible Preferred Stock of
the Company which the undersigned would be entitled to vote at the Special
Meeting of Stockholders to be held on Friday, September 8, 2000 at 10:00 a.m.,
Eastern Standard Time at the Company's corporate headquarters, at 450 East Las
Olas Boulevard, Fort Lauderdale, Florida 33301, or any adjournment thereof,
according to the number of votes that the undersigned would be entitled to vote
if personally present upon the matters referred to in this proxy.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the proposals set forth herein.
1. To approve: (a) the issuance, in a series of transactions, of 100,000
shares of Series B Convertible Preferred Stock (the "Series B
Preferred Stock") to NR2 Holdings Limited, DB Capital Investors, L.P.,
J.P. Morgan Capital Corporation and Sixty Wall Street Fund, L.P.,
52,000 shares of which have already been issued and 48,000 shares of
which will be issued after stockholder approval is obtained; and (b)
the issuance of shares of Common Stock upon the conversion of such
Series B Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To approve the future issuance of Common Stock or securities
convertible into or exercisable for Common Stock to the holders of the
Series B Preferred Stock, or their permitted transferrees, from time to
time pursuant to their exercise of the preemptive rights to which they
are entitled under the Certificate of Designation for the Series B
Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 20
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
The undersigned acknowledges receipt
of Notice of Special Meeting of
Stockholders dated August 14, 2000,
and the accompanying Proxy Statement.
MARK HERE FOR ADDRESS CHANGE AND NOTE [ ]
AT LEFT
Please sign exactly as your name appears on
this proxy. When shares are held by joint
tenants, both should sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as such.
If a corporation, please sign in full
corporate name by the President or other
authorized officer. If a partnership, please
sign in the partnership name by authorized
person.
Signature:_________________ Date:______ Signature:_________________ Date:______
VOTE BY TELEPHONE
-----------------------------------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY STATEMENT AND
PROXY CARD
2. CALL THE TOLL-FREE NUMBER 1-877-PRX-VOTE (1-877-779-8683).
3. ENTER YOUR 14 DIGIT VOTER CONTROL NUMBER LOCATED ON YOUR PROXY CARD
ABOVE YOUR NAME.
4. FOLLOW THE RECORDED INSTRUCTIONS.
-----------------------------------------
YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE
