Item 1.01
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Entry into a Material Definitive Agreement.
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Merger Agreement
On July 28, 2020, On Deck Capital, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Enova International, Inc., a Delaware corporation (“Parent”) and Energy Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company surviving as an indirect wholly owned subsidiary of Parent (the “Merger”).
Effect on Capital Stock
On and subject to the terms and conditions set forth in the Merger Agreement, upon the effective time of the Merger (the “Effective Time”), each issued and outstanding share of Company common stock, par value $0.005 per share (the “Company Common Stock”) (other than any shares of Company Common Stock owned by the Company or owned by Parent, Merger Sub, or any other direct or indirect wholly owned subsidiary of Parent or any shares of Company Common Stock as to which appraisal rights have been properly exercised in accordance with Delaware law), will be automatically cancelled and converted into the right to receive (i) 0.092 of a duly authorized, validly issued, fully paid and nonassessable share of common stock, par value $0.00001 per share, of Parent (the “Exchange Ratio” and “Parent Common Stock”, respectively), (ii) $0.12 in cash (without interest) (the “Cash Consideration”) and (iii) if applicable, cash (without interest) for any fractional shares of Parent Common Stock (such consideration in clauses (i) through (iii) collectively, the “Merger Consideration”).
Representations and Warranties and Covenants
The Company, Parent and Merger Sub have each made customary representations, warranties and covenants in the Merger Agreement. Among other things, (i) each party has agreed, subject to certain exceptions, to use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business, from the date of the Merger Agreement until the Effective Time, and not to take certain actions prior to the Effective Time without the prior written consent of the other party (not to be unreasonable withheld, conditioned or delayed) and (ii) the Company agreed not to solicit alternative business combination transactions and, subject to certain exceptions designated to allow the Company’s board of directors to fulfill its fiduciary duties, not to engage in discussions or negotiations regarding any alternative business combination transactions.
Equity Awards
In connection with the Merger Agreement, each option that represents the right to acquire shares of Company Common Stock that is outstanding immediately prior to the Effective Time (each, an “Option”) with an exercise price less than the Merger Consideration Cash Value (as defined below), whether vested or unvested, will, at the Effective Time, be cancelled and converted into the right to receive an amount in cash (without interest) equal to (x) the Merger Consideration Cash Value minus the exercise price of such Option multiplied by (y) the total number of shares of Company Common Stock subject to such Option. The Merger Agreement defines Merger Consideration Cash Value as the sum of the (i) Cash Consideration and (ii) product obtained by multiplying the Exchange Ratio by the volume weighted average closing sale price of one share of Parent Common Stock as reported on the New York Stock Exchange for the 10 consecutive trading days ending on the date that is two trading days prior to the closing date (the “Parent Trading Price”). Each Option that is outstanding immediately prior to the Effective Time with an exercise price equal to or greater than the Merger Consideration Cash Value, whether vested or unvested, will, at the Effective Time, be forfeited and cancelled automatically without any consideration paid.
In addition, each service vesting award of restricted stock units of the Company that is outstanding immediately prior to the Effective Time and held by an employee of the Company or any subsidiary of the Company (the “Employee RSUs”), will, at the Effective Time, be assumed and converted automatically into a time vesting restricted stock unit award (each, an “Adjusted RSU”) that, subject to later vesting thereof, will be settled for a number of shares of Parent Common Stock equal to the sum of (i) the product of (A) the Exchange Ratio, multiplied by (B) the number of shares of Company Common Stock subject to the Employee RSU immediately prior to the Effective Time, plus (ii) the quotient of (A) the product of (x) the number of shares of Company Common Stock subject to the Employee RSU immediately prior to the Effective Time, multiplied by (y) the Cash Consideration, divided by (B) the Parent Trading