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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
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))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12
HILL INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
   
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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One Commerce Square
2005 Market Street, 17th Floor
Philadelphia, Pennsylvania 19103
September 30, 2022
Dear Fellow Stockholder:
You are cordially invited to attend a special meeting of stockholders (the “special meeting”) of Hill International, Inc., a Delaware corporation (the “Company”), to be held at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania on Wednesday, November 2, 2022, at 10:00 a.m. Eastern Time.
On August 26, 2022, the Company entered into an Amended and Restated Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified in accordance with its terms, the “merger agreement”) with Global Infrastructure Solutions Inc., a Delaware corporation (“Parent”), and Liberty Acquisition Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), providing for, subject to the satisfaction or waiver of specified conditions set forth therein, the acquisition of the Company by Parent. Subject to the terms and conditions of the merger agreement, Merger Sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent.
At the special meeting, you will be asked to consider and vote on:

a proposal to adopt and approve the merger agreement (Proposal 1);

a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger (Proposal 2); and

a proposal to adjourn the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt and approve the merger agreement if there are insufficient votes at the time of such special meeting to approve such proposal (Proposal 3).
If the merger is consummated, the holders of the common stock, par value $0.0001 per share, of the Company (the “Company common stock”) will receive $3.40 in cash, without interest, less any applicable withholding taxes, for each share of Company common stock that they own immediately prior to the time the merger becomes effective (the “effective time”), other than shares (i) held in treasury by the Company or owned by Parent or Merger Sub or any direct or indirect wholly owned subsidiaries of Parent, Merger Sub or the Company and (ii) issued and outstanding immediately prior to the effective time that are held by a holder who is entitled to demand and has properly exercised and perfected appraisal rights in respect of such shares pursuant to, and who complies in all respects with, Section 262 of the General Corporation Law of the State of Delaware and has not effectively and validly withdrawn or lost such holder’s rights to appraisal.
The Board of Directors of the Company (the “Company Board”) reviewed and considered the terms and conditions of the merger agreement and the transactions contemplated by the merger agreement, including the merger. After consideration, the Company Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the merger agreement and the consummation of the merger and the other transactions and (iii) recommended that the Company’s stockholders vote to approve the adoption of the merger agreement, subject to the right of the Company Board to withdraw or modify its recommendation in
 

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accordance with the terms of the merger agreement. Accordingly, the Company Board unanimously recommends a vote “FOR” the adoption and approval of the merger agreement and the approval of the other proposals to be voted on at the special meeting, each as described in the accompanying proxy statement.
The accompanying proxy statement provides you with more specific information about the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement. You should carefully read the entire proxy statement, including the annexes and documents referred to or incorporated by reference therein. You may also obtain more information about the Company from the documents the Company files with the U.S. Securities and Exchange Commission (the “SEC”), including those incorporated by reference into the accompanying proxy statement.
Your vote is very important.   Adoption and approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock. The failure of any stockholder to vote will have the same effect as a vote against the merger agreement. Accordingly, whether or not you plan to attend the special meeting, you are requested to promptly vote your shares by completing, signing and dating the enclosed proxy card or voting instruction card and returning it in the envelope provided or by voting over the telephone or the Internet as instructed in these materials. If you are a stockholder of record and you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote:
1.
FOR adoption and approval of the merger agreement;
2.
FOR approval of the non-binding named executive officer merger-related compensation proposal; and
3.
FOR adjourning the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies.
Voting by proxy will not prevent you from voting your shares in person at the special meeting if you choose to attend the special meeting.
If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the enclosed voting instruction card. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt and approve the merger agreement, without your instructions.
Thank you for your cooperation and continued support.
Sincerely,
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Raouf S. Ghali,
Chief Executive Officer and President
The merger has not been approved or disapproved by the SEC or any state securities commission. Neither the SEC nor any state securities commission has passed upon the merits or fairness of the merger or upon the adequacy or accuracy of the information contained in this document or the accompanying proxy statement. Any representation to the contrary is a criminal offense.
THE ACCOMPANYING PROXY STATEMENT IS DATED SEPTEMBER 30, 2022 AND IS FIRST BEING MAILED TO STOCKHOLDERS OF THE COMPANY ON OR ABOUT SEPTEMBER 30, 2022.
 

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One Commerce Square
2005 Market Street, 17th Floor
Philadelphia, Pennsylvania 19103
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 2, 2022
To our Stockholders:
A special meeting of stockholders (the “special meeting”) of Hill International, Inc. (the “Company”) will be held at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103 on Wednesday, November 2, 2022, at 10:00 a.m. Eastern Time. We are holding the special meeting for the following purposes:
1.
Adoption and Approval of the Merger Agreement.   To consider and vote on a proposal to adopt and approve the Amended and Restated Agreement and Plan of Merger, dated as of August 26, 2022, among the Company, Global Infrastructure Solutions Inc., a Delaware corporation (“Parent”), and Liberty Acquisition Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”) (as it may be amended, supplemented, or otherwise modified in accordance with its terms, the “merger agreement”), pursuant to which Merger Sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent (such proposal, the “merger agreement proposal”);
2.
Non-Binding Named Executive Officer Merger-Related Compensation Proposal.   To consider and vote on a proposal to approve, on a non-binding, advisory basis, a resolution approving the compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger (such proposal, the “non-binding named executive officer merger-related compensation proposal”); and
3.
Adjournment of the Special Meeting.   To approve the adjournment of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal (such proposal, the “adjournment proposal”).
The Board of Directors of the Company unanimously recommends that the stockholders of the Company vote “FOR” the merger agreement proposal, “FOR” the non-binding named executive officer merger-related compensation proposal and “FOR” the adjournment proposal, each as described in greater detail in the accompanying proxy statement.
Only stockholders of record at the close of business on September 29, 2022 are entitled to notice of and to vote at the special meeting and at any adjournment of the special meeting in accordance with the merger agreement.
We intend to hold the special meeting in person, but we are actively monitoring the coronavirus pandemic (COVID-19). We are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the special meeting in person or we otherwise determine that alternative arrangements are necessary, we will announce those alternative arrangements as promptly as practicable. Please refer to the accompanying proxy statement for where to find additional information on such announcements, if any.
For more information concerning the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement, please review the accompanying proxy statement and the copy of the merger agreement attached as Annex A to the proxy statement.
 

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To ensure your representation at the special meeting, regardless of whether you plan to attend the special meeting, you are urged to vote your shares by completing, signing, dating and returning the enclosed proxy or voting instruction card as promptly as possible in the postage-paid envelope enclosed. Alternatively, you may vote by telephone or over the Internet as instructed in these materials. If you are voting by telephone or over the Internet, then your voting instructions must be received by 11:59 p.m., Eastern Time, on the day before the special meeting. Your proxy is being solicited by the Board of Directors of the Company.
A stockholder who does not vote in favor of the merger agreement proposal will have the right to seek appraisal of the fair value of its shares if the merger is consummated, but only if such stockholder submits a written demand for appraisal to the Company prior to the time the vote is taken on the merger agreement proposal and complies with all other requirements of the Delaware General Corporation Law (“DGCL”). A copy of the applicable DGCL statutory provisions is included as Annex C to the accompanying proxy statement, and a summary of these provisions can be found under the section entitled “Appraisal Rights” in the accompanying proxy statement.
Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of common stock, par value $0.0001 per share, of the Company (the “Company common stock”). The failure to vote will have the same effect as a vote against the merger agreement proposal. Even if you plan to attend the special meeting, please complete, sign, date and return the enclosed proxy or voting instruction card or vote over the telephone or the Internet as instructed in these materials as promptly as possible to ensure that your shares will be represented at the special meeting if you are unable to attend. If you are a stockholder of record and sign, date and mail your proxy card without indicating how you wish to vote, your shares will be voted in favor of the merger agreement proposal, the non-binding named executive officer merger-related compensation proposal and the adjournment proposal. If you fail to return your proxy card, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and it will have the same effect as a vote against the merger agreement proposal. If your shares are held in “street name” and you fail to return your voting instruction card or otherwise properly instruct your broker, bank or other nominee how to vote your shares, it will have the same effect as a vote against the merger agreement proposal.
By Order of the Board of Directors,
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William H. Dengler, Jr., Executive Vice President, Chief Administrative Officer
and Corporate Secretary
September 30, 2022
Philadelphia, Pennsylvania
 

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YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY OR VOTING INSTRUCTION CARD AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE; (2) OVER THE INTERNET; OR (3) BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY OR VOTING INSTRUCTION CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY REVOKE YOUR PROXY OR CHANGE YOUR VOTE AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING.
If you are a stockholder of record, voting in person during the special meeting will revoke any proxy that you previously submitted. Registered stockholders may be admitted to the special meeting upon providing picture identification. If you own shares in street name (i.e., your shares are held in street name through a broker, bank, trustee or other nominee), you must also bring your most recent brokerage statement, along with picture identification, to the special meeting. We will use your brokerage statement to verify your ownership of common stock and admit you to the special meeting.
If you are a stockholder of record and you fail to (1) return your proxy, (2) grant your proxy or provide voting instructions electronically over the Internet or by telephone or (3) attend and vote at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and it will have the same effect as a vote against the merger agreement proposal.
If you hold your shares in “street name,” you will need to instruct your bank, broker or other nominee how to vote your shares in accordance with the enclosed voting instruction card provided by your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the merger agreement proposal, without your instructions. Failure to provide these instructions will have the same effect as a vote against the merger agreement proposal.
We encourage you to read the accompanying proxy statement and its annexes, including all documents referred to or incorporated by reference into the accompanying proxy statement, carefully and in their entirety. Please monitor our press releases and filings with the Securities Exchange Commission for updated information. If you are planning to attend the special meeting, please check our press releases available at http://ir.hillintl.com/press-releases in the days leading up to the meeting date. As always, we encourage you to vote your shares by proxy before the special meeting regardless of whether you intend to attend in person. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Company common stock, please contact:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Telephone (toll-free): (800) 322-2885
 

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SUMMARY TERM SHEET
This Summary Term Sheet, together with “Questions and Answers About the Special Meeting and Merger” beginning on page 9, summarizes certain of the material information set forth or incorporated by reference in this proxy statement. We encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. Each item in this Summary Term Sheet includes a page reference directing you to a more complete description of that topic. See “Where You Can Find More Information” beginning on page 85 for additional information regarding the documents incorporated by reference in this proxy statement. In this proxy statement, the terms “the Company,” “Hill,” “we,” “our” and “us” refer to Hill International, Inc. and its consolidated subsidiaries taken as a whole, unless the context requires otherwise.
The Parties to the Merger (page 16)
Hill International, Inc.
Hill International, Inc. is a Delaware corporation with more than 3,000 professionals in 100 offices worldwide, provides project management, construction management, facilities management and other consulting services primarily to the building, transportation, environmental, energy and industrial markets. The Company is headquartered in Philadelphia, Pennsylvania. Upon completion of the Merger, the Company will be an indirect wholly owned subsidiary of GISI.
Global Infrastructure Solutions Inc., a Delaware corporation (“Parent” or “GISI”)
GISI is the largest privately owned construction manager in the commercial building, industrial and healthcare markets, and a leading project/construction manager in the environmental and public infrastructure sectors. Through the dedicated efforts of its more than 8,500 employees, it generates annual revenue of approximately $11 billion, and enjoys project backlog of more than $22 billion.
Liberty Acquisition Sub Inc., a Delaware corporation (“Merger Sub”)
Merger Sub is a wholly owned indirect subsidiary of Parent formed by Parent solely for the purpose of engaging in the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will merge with and into the Company, and Merger Sub will cease to exist, and the Company will continue as the surviving company and an indirect wholly owned subsidiary of GISI.
The Merger (page 21)
You are being asked to adopt and approve the Amended and Restated Agreement and Plan of Merger, dated as of August 26, 2022, among the Company, Parent and Merger Sub (as it may be amended, supplemented, or otherwise modified in accordance with its terms, the “merger agreement”), pursuant to which, subject to the terms and conditions set forth therein, Merger Sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned indirect subsidiary of Parent. The merger agreement amended and restated the prior Agreement and Plan of Merger, dated August 16, 2022, among the Company, Parent and Merger Sub (the “original merger agreement”). Upon completion of the merger, the Company will cease to be a publicly traded company, and you will cease to have any rights in the Company as a stockholder except the right to receive the merger consideration.
Consideration To Be Received in the Merger (page 57)
If the merger is consummated, each share of the Company’s common stock, par value $0.0001 per share (the “Company common stock”), other than as provided below, will be converted into the right to receive $3.40 in cash, without interest, less any applicable withholding taxes (the “merger consideration”). The following shares of Company common stock will not be converted into the right to receive the merger consideration in connection with the merger: (i) shares held in treasury by the Company or owned by Parent or Merger Sub or any direct or indirect wholly owned subsidiaries of Parent, Merger Sub or the Company immediately prior to the effective time, and (ii) shares issued and outstanding immediately prior to the effective time that are held by a holder who is entitled to demand and has properly exercised and perfected demand
 
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for appraisal of such shares pursuant to, and who complies in all respects with, Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) and has not effectively and validly withdrawn or lost such holder’s rights to appraisal.
Treatment of Company Compensatory Awards (page 58)
Subject to the terms of the merger agreement, at the effective time, pursuant to the applicable Company stock incentive plan, each (i) restricted stock unit award covering shares of Company common stock (“Company RSU”), (ii) deferred stock unit award covering shares of Company common stock (“Company DSU”), (iii) option to purchase Company shares of common stock (“Company Option”), and (iv) restricted stock award (the “Company Restricted Stock”) and together each Company RSU, Company DSU and Company Option, the “Company Compensatory Award”), that is outstanding and unvested immediately prior to the effective time of the merger will become vested and be settled in cash, without interest, in an amount equal to the product of (x) the aggregate number of shares of Company common stock subject to each such Company Compensatory Award as of the Effective Time and (y) the excess, if any, of the merger consideration over any per share exercise or purchase price of such Company Compensatory Award immediately prior to such cancellation. For more information, see “The Merger Agreement — Treatment of Company Compensatory Awards.”
When the Merger is Expected to be Consummated
The Company currently anticipates that the merger will be consummated in the fourth quarter of 2022. However, there can be no assurances that the merger will be completed at all, or if completed, that it will be completed in 2022. Completion of the merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to the completion of the merger, which are described below and include regulatory clearances and approvals, and it is possible that factors outside the control of the Company or Parent could delay the completion of the merger, or prevent it from being completed at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required approvals.
The Special Meeting (page 17)
A special meeting of our stockholders will be held at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103 on Wednesday, November 2, 2022, at 10:00 a.m. Eastern Time (the “special meeting”). We intend to hold the special meeting in person, but we are actively monitoring the coronavirus pandemic (COVID-19). We are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the special meeting in person or we otherwise determine that alternative arrangements are necessary, we will announce those alternative arrangements as promptly as practicable. At the special meeting, you will be asked to, among other things, vote for the merger agreement proposal. See “Questions and Answers About the Special Meeting and Merger” and “The Special Meeting of the Company’s Stockholders.”
Record Date and Quorum (page 17)
Only holders of record of Company common stock, as of the close of business on September 29, 2022 (the “record date”), the date established by the Board of Directors of the Company (the “Company Board”) as the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. On the record date, there were 57,331,357 shares of Company common stock outstanding.
To conduct any business at the special meeting, a quorum must be present in person or by proxies. The holders of a majority of the shares of Company common stock outstanding and entitled to vote at the meeting, present in person or by proxy, will constitute a quorum for the transaction of business at the special meeting. For more information, see “The Special Meeting of the Company’s Stockholders — Who Can Vote at the Special Meeting” and “The Special Meeting of the Company’s Stockholders — Quorum for the Special Meeting.”
 
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Votes Required (page 17)
Adoption and approval of the merger agreement (the “merger agreement proposal”) requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock.
Approval of the specified compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger, on a non-binding, advisory basis (the “non-binding named executive officer merger-related compensation proposal”), requires the affirmative vote of the holders of shares of Company common stock present in person or by proxy having a majority of the votes entitled to vote thereon.
Approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal (the “adjournment proposal”) requires the affirmative vote of the holders of shares of Company common stock represented in person or by proxy having a majority of the votes entitled to vote thereon.
A vote to abstain will have the same effect as voting against each proposal as to which you abstain.
If you are a holder of record, failure to submit a proxy or to vote at the special meeting will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.
In the absence of a quorum, the chairman of the meeting or the stockholders so present may, by a majority vote of the holders of shares of Company common stock represented in person or by proxy, adjourn the meeting from time to time in the manner provided in the Company bylaws.
Recommendation of the Company Board (page 36)
After consideration of various factors, including the factors described in the section entitled “The Merger — Recommendation of the Company Board,” the Company Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the merger agreement, and the consummation of the merger and the other transactions, and (iii) recommended that the Company’s stockholders vote to approve the adoption of the merger agreement, subject to the right of the Company Board to withdraw or modify its recommendation in accordance with the terms of the merger agreement (the “recommendation of the Company Board”).
Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. The failure to vote your shares, or to provide instructions to your broker, bank or other nominee as to how to vote your shares, will have the same effect as a vote against the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.
Interests of the Company’s Directors and Executive Officers in the Merger (page 48)
In considering the recommendation of the Company Board, you should be aware that some of the Company’s directors and executive officers may have interests in the merger that are different from, or in addition to, your interests as a stockholder. These interests include, among others:

the accelerated vesting and cash settlement of unvested Company Compensatory Awards for the merger consideration;

with respect to certain executive officers and other key employees, the opportunity to receive cash severance payments and benefits; and

continued indemnification and directors’ and officers’ liability insurance applicable for a period of six years following completion of the merger.
 
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The Company Board was aware of these interests and considered them, among other matters, prior to making its determination to recommend the adoption and approval of the merger agreement to the Company’s stockholders. For more information, see the section entitled “The Merger — Interests of the Company’s Directors and Executive Officers in the Merger.”
Opinion of Houlihan Lokey (page 39 and Annex B)
On August 26, 2022, Houlihan Lokey Capital, Inc., which we refer to as Houlihan Lokey, verbally rendered its opinion to the Company Board (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Company Board dated August 26, 2022), as to the fairness, from a financial point of view and as of such date, of the merger consideration to be received by the holders of Company common stock (other than Excluded Persons, as described below) in the merger pursuant to the merger agreement, which opinion was based on and subject to the various procedures followed, assumptions made, qualifications and limitations on the review undertaken and the other matters considered by Houlihan Lokey in connection with the preparation of its opinion. For purposes of Houlihan Lokey’s opinion, “Excluded Persons” refers to Parent, Merger Sub and their respective affiliates.
Houlihan Lokey’s opinion was directed to the Company Board (in its capacity as such) and only addressed the fairness, from a financial point of view and as of such date, of the merger consideration to be received by holders of Company common stock (other than Excluded Persons) in the merger pursuant to the merger agreement and did not address any other aspect or implication of the merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex B to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice or a recommendation to the Company Board, any security holder of the Company or any other person as to how to act or vote with respect to any matter relating to the merger. See “The Merger — Opinion of the Financial Advisor to the Company.”
Certain U.S. Federal Income Tax Consequences of the Merger (page 51)
The exchange of Company common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “The Merger — Certain U.S. Federal Income Tax Consequences of the Merger”) of Company common stock who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.
This proxy statement contains a general discussion of certain U.S. federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it address state, local or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the merger.
Non-Solicitation Covenant (page 64)
In the merger agreement, the Company has agreed that it will not, and will cause its subsidiaries not to, and will not permit their respective representatives to, directly or indirectly (i) solicit, initiate, seek, facilitate or knowingly encourage or knowingly induce or take any other action designed or intended to lead to, or that would reasonably be expected to lead to, or the making, submission or announcement of any acquisition proposal or acquisition inquiry (as defined in “The Merger Agreement — Non-Solicitation Covenant”) or (ii) participate in any discussions or negotiations regarding or furnish to any person or entity any information relating to the Company or any Company subsidiary, in each case in connection with an acquisition proposal, other than to state that the Company and its representatives are prohibited hereunder from engaging in any discussions or negotiations. However, the merger agreement allows the Company to furnish
 
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information and participate in unsolicited discussions or negotiations under certain circumstances prior to obtaining the requisite approval of the Company’s stockholders.
In the merger agreement, the Company has also agreed that the Company Board (and any committee thereof) will not (i) adopt, approve, publicly endorse or publicly recommend or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal, (ii) withdraw, modify or qualify, or otherwise publicly propose to withdraw, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation, (iii) fail to include the Company Board Recommendation in this proxy statement, (iv) if an acquisition proposal has been publicly disclosed, fail to publicly reaffirm the Company Board Recommendation within 10 business days after Parent’s written request that the Company Board provide such reaffirmation following the first public disclosure of any acquisition proposal (provided that Parent may only make such request once with respect to any particular acquisition proposal and once with respect to any publicly announced material change thereof), (v) fail to recommend against an acquisition proposal that is a tender or exchange offer subject to Regulation 14D under the Exchange Act within 10 business days after of such tender or exchange offer, or (vi) adopt or approve, or propose to adopt or approve, or permit the Company or any Company subsidiary to enter into any binding or non-binding letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other agreement, commitment, arrangement or understanding relating to or in connection with, or that is intended to or would reasonably be expected to lead to, any acquisition proposal.
However, at any time prior to obtaining stockholder approval, the Company Board may make a change of recommendation in response to an intervening event (as defined in “The Merger Agreement — Changes in Board Recommendation”), if the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law.
In addition, at any time prior to obtaining stockholder approval, the Company Board, may make a change of recommendation or cause the Company to terminate the merger agreement (pursuant to and in accordance with the terms thereof) in order to enter into a definitive agreement providing for an acquisition proposal that did not result from a material breach of the non-solicitation restrictions and that the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors is a superior proposal (as defined in “The Merger Agreement — No Solicitation; Recommendations of the Merger”), but only if, in each case, the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law.
The Company must comply with certain provisions of the merger agreement related to Parent (including with respect to notifying Parent and negotiating with Parent) before making an adverse recommendation change or terminating the merger agreement. Upon termination of the merger agreement under specified circumstances, the Company will be required to pay Parent a termination fee of $8.4 million.
Conditions to Completion of the Merger (page 70)
The consummation of the merger is subject to, among other things, the following conditions:

the adoption of the merger agreement at the special meeting by the holders of at least a majority of the outstanding shares of Company common stock;

the absence of any order that has the effect of preventing, making illegal or otherwise prohibiting the consummation of the merger;

the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the receipt of authorization or consent from applicable governmental entitites under certain foreign antitrust laws;

each party’s respective representations and warranties in the merger agreement being true and correct as of the closing date, or with respect to certain representations and warranties, as of a time otherwise specified, in the manner described in “The Merger Agreement — Conditions of the Merger” subject to certain materiality and material adverse effect qualifiers;
 
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each party’s performance in all material respects of its obligations required to be performed under the merger agreement prior to the effective time of the merger; and

the absence of any, with respect to the Company, material adverse effect, in the manner described in “The Merger Agreement — Representations and Warranties.”
Financing (page 70)
The merger agreement does not contain any financing-related closing condition, and Parent and Merger Sub have represented that Parent will have at the effective time sufficient funds to consummate the transactions contemplated by the merger agreement and to make all cash payments contemplated under the merger agreement in connection with the merger and the other transactions, including payment of all related fees and expenses.
Regulatory Approvals (page 54)
Under the terms of the merger agreement, the merger cannot be consummated until the Company has obtained the applicable regulatory approvals and satisfied all statutory waiting period requirements, including the applicable waiting period (and any extension thereof) under the HSR Act has expired or been terminated, and making certain other merger filings or clearances that may be required or advisable in other jurisdictions.
Under the HSR Act and the rules promulgated thereunder by the U.S. Federal Trade Commission (the “FTC”), the merger cannot be consummated until each of the Company and Parent files a notification and report form with the FTC and the Antitrust Division of the U.S. Department of Justice (“DOJ”) under the HSR Act and the applicable waiting period has expired or been terminated, and after the mandatory approval requirements outside of the United States have been obtained under applicable antitrust and foreign investment laws. Each of the Company and Parent filed such a notification and report form with the FTC and DOJ.
On September 29, 2022 at 11:59 p.m. Eastern Time, the applicable waiting period under the HSR Act expired.
At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the Antitrust Division of the DOJ or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, or part of it, seeking divestiture of substantial assets of the Company or Parent, requiring the Company or Parent to license, or hold separate, assets or terminating existing relationships and contractual rights. In addition, state attorneys general and other regulators could take action under the antitrust or other laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the applicable laws under some circumstances. There can be no assurance that a challenge to the merger will not be made or, if such a challenge were made, that it would not be successful.
Termination of the Merger Agreement (page 72)
The merger agreement may be terminated, and the merger may be abandoned at any time prior to the effective time:

by mutual written consent of Parent and the Company;

by either Parent or the Company, if:

the merger has not been consummated by April 15, 2023 (which we refer to as the “end date”); however, this right to terminate will not be available to any party whose failure to fulfill any obligation has been the principal cause of, or principally resulted in, the failure of the merger to have occurred on or before the end date;

any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or judgment in each case preventing, making illegal or otherwise prohibiting the consummation
 
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of the merger; however, this right to terminate will not be available to any party whose failure to fulfill any obligation has been the principal cause of, or principally resulted in, the issuance, promulgation, enforcement or entry of any such order, injunction, decree or judgment; or

the special meeting (including any adjournments or postponements thereof) has concluded and the Company stockholders have not adopted the merger agreement;

by the Company:

if Parent and/or Merger Sub has breached any of the representations and warranties of Parent or Merger Sub set forth in the merger agreement or failed to perform or violated their respective covenants or agreements under the merger agreement, and such breach, or failure to perform would reasonably be expected to prevent or materially delay the consummation of Parent or Merger Sub of the merger or any of the transactions and is not capable of being cured by the end date or, if capable of being cured by the end date, is not cured before the earlier of the business day immediately prior to the end date and the 20th calendar day following receipt of written notice from the Company of such breach, failure to perform, violation or inaccuracy, except the Company will not have the right to effect such termination if it is then in material breach of the merger agreement; or

prior to receipt of the stockholder approval, in order to enter into a definitive agreement providing for a superior proposal (as defined in “The Merger Agreement — Non-Solicitation Covenant”) so long as the Company has complied with its obligations under the non-solicitation covenant in the merger agreement from and immediately prior to or simultaneously with the termination of this Agreement, the Company pays to Parent the $8,400,000 termination fee described below.

by Parent:

if the Company has breached or failed to perform or violated its covenants or agreements under the merger agreement or any of the representations and warranties of the Company set forth in the merger agreement shall have become inaccurate, and such breach, failure to perform, violation or inaccuracy would result in the failure of the related conditions to Parent’s obligation to close the merger to be satisfied and is not capable of being cured by the end date or, if capable of being cured by the end date, is not cured before the earlier of the business day immediately prior to the end date and the 30th calendar day following receipt of written notice from Parent of such breach, failure to perform, violation or inaccuracy, except Parent will not have the right to effect such termination if it is then in material breach of the merger agreement; or

if, prior to the Company stockholder approval, the Company Board has effected a change of the Company Board Recommendation.
Termination Fee Payable by the Company (page 73)
If the merger agreement is terminated under certain circumstances, the Company may be obligated to pay Parent a termination fee of $8.4 million.
Effect of Termination (page 73)
Each of the parties to the merger agreement is entitled to specific performance of the terms of the merger agreement, in addition to any other remedy at law or equity.
Support Agreement (page 74)
Concurrently with the execution of the merger agreement, Parent entered into a Support Agreement (the “support agreement”) with certain stockholders of the Company collectively beneficially owning approximately 10% of the outstanding shares of Company common stock, pursuant to which each such stockholder agreed, among other things, to vote in favor of the transactions contemplated by the merger agreement and in favor of adopting the merger agreement and against other proposals to acquire the Company.
Litigation Related to the Merger (page 53)
Following the announcement of the merger, Shiva Stein, a purported stockholder of the Company, filed a complaint captioned Stein v. Hill International, Inc. et al, 1:22-cv-07907 in the United States District
 
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Court for the Southern District of New York on September 15, 2022 (the “Stein Complaint”). The Stein Complaint generally alleges that the Company made misleading or materially incomplete disclosures regarding the merger in the preliminary proxy statement on Schedule 14A filed with the SEC on September 14, 2022, including but not limited to claims that the preliminary proxy statement omitted material information regarding the financial projections provided to Houlihan Lokey and the valuation analyses performed by Houlihan Lokey, and that, as a result, the Company and each Company Board member violated Section 14(a) of the Exchange Act and each Company Board member violated Section 20(a) of the Exchange Act. The Stein Complaint also alleges that all defendants violated 17 C.F.R. § 244.100. The Stein Complaint seeks (i) injunctive relief, (ii) rescission in the event the merger is consummated or alternatively rescissory damages, (iii) an accounting for all damages suffered, (iv) plaintiff’s costs and disbursements in connection with the action, including plaintiff’s attorneys’ and experts’ fees, and (v) such other relief as the Court deems just and proper. Additionally, the Company has received demand letters from purported stockholders of the Company that contain claims similar to those in the Stein Complaint. The Company and the Company Board believe that the claims asserted in the Stein Complaint and demand letters are without merit. Additional lawsuits and demand letters arising out of or relating to the merger agreement or the merger may be filed or made in the future. If additional similar lawsuits or demands are filed or made, absent new or different material allegations, the Company will not necessarily announce such additional filings, unless such announcement or disclosure is required by law.
The outcome of any current or future litigation related to the transactions, including the merger, is uncertain. Such litigation, if not resolved, could prevent or delay consummation of the merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. One of the conditions to the consummation of the merger is that no governmental entity of competent jurisdiction (i) enacted, issued or promulgated any order that is in effect or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect, in each case which has the effect of preventing, making illegal or otherwise prohibiting the consummation of the merger. Therefore, if a plaintiff were successful in obtaining an injunction prohibiting the consummation of the merger, then such injunction may prevent the merger from being consummated, or from being consummated within the expected time frame.
Appraisal Rights (page 81)
Under the DGCL, a holder of record of Company common stock who does not vote in favor of the merger agreement proposal will have the right to seek appraisal of the fair value of its shares of Company common stock as determined by the Court of Chancery of the State of Delaware if the merger is completed, but only if such stockholder complies with all requirements of the DGCL for exercising appraisal rights, including Section 262 of the DGCL. This appraisal amount could be more than, the same as or less than the merger consideration. Any holder of record of the Company common stock intending to exercise appraisal rights must, among other things, submit a written demand for an appraisal to us prior to the vote on the merger agreement proposal at the special meeting and must not vote or otherwise submit a proxy in favor of the merger agreement proposal. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. The requirements of the DGCL for exercising appraisal rights are summarized in this proxy statement, including Section 262 of the DGCL, the text of which can be found in Annex C to this proxy statement.
Delisting and Deregistration of Company Capital Stock (Page 85)
If the merger is consummated, the Company common stock will be delisted from the NYSE and deregistered under the Exchange Act. Accordingly, following the consummation of the merger, we would no longer file periodic reports with the U.S. Securities and Exchange Commission (the “SEC”), on account of the Company common stock.
Where You Can Find More Information (page 85)
You can find more information about the Company in the periodic reports and other information we file with the SEC. The information is available at the website maintained by the SEC at www.sec.gov. See “Where You Can Find More Information.”
 
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER
Q:
Why am I receiving this proxy statement?
A:
You are receiving this proxy statement because on August 26, 2022 the Company entered into the merger agreement with Parent and Merger Sub. You are receiving this proxy statement in connection with the solicitation of proxies by the Company Board in favor of the merger agreement proposal. The merger agreement is attached as Annex A to this proxy statement. The description of the merger agreement in this proxy statement is not complete and is qualified in its entirety by reference to the complete text of the merger agreement.
Q:
What will the Company’s stockholders receive in the merger?
A:
If the merger is consummated, each holder of Company common stock will receive the merger consideration of $3.40 in cash, without interest, less any applicable withholding taxes, for each share of the Company common stock that such stockholder owns immediately prior to the time the merger becomes effective (the “effective time”), unless such stockholder exercises and perfects its appraisal rights under the DGCL.
Q:
When and where is the special meeting?
A:
The special meeting of Company stockholders will be held at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania on Wednesday, November 2, 2022, at 10:00 a.m. Eastern Time. We intend to hold the special meeting in person, but we are actively monitoring the coronavirus pandemic (COVID-19). We are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the special meeting in person or we otherwise determine that alternative arrangements are necessary, we will announce those alternative arrangements as promptly as practicable. Please refer to the accompanying proxy statement for where to find additional information on such announcements, if any.
Q:
Who is eligible to vote?
A:
Holders of record of the Company common stock as of the close of business on September 29, 2022, the record date established by the Company Board for the special meeting, are eligible to vote at the special meeting.
Q:
How many votes do the Company’s stockholders have?
A:
Holders of the Company common stock are entitled to one vote for each share of the Company common stock that such holder owned at the close of business on September 29, 2022, the record date for the special meeting.
Q:
What vote of the Company’s stockholders is required to approve the merger agreement proposal?
A:
Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock. Failures to vote, abstentions and broker non-votes will have the same effect as a vote against the merger agreement proposal.
Q:
What vote of the Company’s stockholders is required to approve the other proposals to be considered at the special meeting?
A:
Approval of each of the non-binding named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of shares of Company common stock represented in person or by proxy having a majority of the votes entitled to vote thereon. Abstentions have the same effect as a vote against either proposal, but broker non-votes will not affect the outcome of either proposal.
 
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Q:
How does the Company Board recommend that I vote?
A:
After consideration of various factors, including the factors described in the section entitled “The Merger — Recommendation of the Company Board and Reasons for the Merger,” the Company Board unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein, and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement. Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.
You should be aware that some of the Company’s directors and executive officers are subject to plans, agreements or arrangements that may provide them with interests in the merger that are different from, or are in addition to, the interests of the Company’s stockholders generally. These interests relate to equity securities held by such persons and their affiliates; change of control severance covering the Company’s executive officers; and indemnification of the Company’s directors and officers by the surviving company following the merger. See the section entitled “The Merger — Interests of the Company’s Directors and Executive Officers in the Merger.”
Q:
What do I need to do now?
A:
Please read this proxy statement carefully in its entirety, including its annexes and the documents referred to or incorporated by reference herein, to consider how the merger would affect you. After you read these materials, you should complete, sign and date your proxy or voting instruction card and mail it in the enclosed return envelope or submit your vote over the telephone or the Internet as soon as possible so that your shares can be voted at the special meeting. If you are a stockholder of record and you sign, date and mail your proxy card or otherwise submit your proxy without indicating how you wish to vote, your shares will be voted in accordance with the recommendations of the Company Board, as applicable, with respect to each proposal.
Q:
Do I need to attend the special meeting?
A:
No. It is not necessary for you to attend the special meeting in order to vote your Company common stock. If you are a stockholder of record as of the record date, you may vote by mail, by telephone or through the Internet, as described in more detail below. If you are a “street name” holder of Company common stock, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee for your shares of Company common stock to be voted at the special meeting, as described in more detail below.
Q:
How do I vote?
A:
If you are a stockholder of record, you may vote:

by proxy by returning the enclosed proxy card in the enclosed return envelope;

by proxy over the telephone using the telephone number printed on each proxy card you receive;

by proxy through the Internet voting instructions printed on each proxy card you receive; or

by casting your vote at the special meeting.
Only our stockholders and invited guests may attend the special meeting. Refer to “How to Attend the Special Meeting” for further information regarding admission to the special meeting. You will need to bring picture identification to the meeting. If you own shares in street name (i.e., your shares are held in street name through a broker, bank, trustee or other nominee), you must also bring your most recent brokerage statement to the meeting. We will use your brokerage statement to verify your
 
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ownership of common stock and admit you to the meeting. Shares held in your name as the stockholder of record may be voted by you in person at the special meeting. Shares held beneficially in street name may be voted by you in person at the special meeting only if you obtain a legal proxy from the broker or other agent that holds your shares giving you the right to vote the shares and only if you bring such proxy to the special meeting. If you vote by proxy and also attend the special meeting, you do not need to vote again at the special meeting unless you wish to change your vote. Even if you plan to attend the special meeting, we strongly urge you to vote in advance by proxy by signing and dating the enclosed proxy card and returning it in the postage-paid envelope provided.
If you are submitting your proxy by telephone or through the Internet, your voting instructions must be received by 11:59 p.m., Eastern Time, on the day before the special meeting.
If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares of Company common stock will be voted “FOR” the approval of the merger agreement proposal, “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.
If your shares of Company common stock are held in “street name” by your broker, bank or other nominee, you should have received a voting instruction card with these proxy materials from that organization rather than a proxy card from the Company. Your broker, bank or other nominee will vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares by following the procedures provided by your broker. See “The Special Meeting of the Company’s Stockholders — How to Vote.”
Q:
How does an employee participating in the Company’s 401(k) Plan vote?
A:
If you are an employee of the Company and participate in the Hill International Inc. 401(k) Retirement Savings Plan (the “Plan”), the enclosed voting instruction form indicates the aggregate number of shares of common stock credited to your account as of September 29, 2022, the record date for voting at the special meeting. If you timely submit your voting instructions to the Plan’s trustee (the “Trustee”) by following the instructions on the enclosed voting instruction form, your shares will be voted as you have directed. If you do not provide the Trustee with voting instructions, the Trustee will vote your Plan shares in the same proportion as the shares for which the Trustee receives voting instructions from other participants in the Plan. The Trustee must receive your voting instructions no later than November 1, 2022. Please note that Plan participants may vote their shares through the Trustee only and accordingly may not vote their Plan shares in person at the special meeting.
Q:
If my shares are held for me by a bank, broker, trust or other nominee, will my bank, broker, trust or other nominee vote those shares for me with respect to the proposals?
A:
Your bank, broker, trust or other nominee will NOT have the power to vote your shares of Company common stock at the special meeting unless you provide instructions to your bank, broker, trust or other nominee on how to vote. You should instruct your bank, broker, trust or other nominee on how to vote your shares of Company common stock with respect to the proposals, using the instructions provided by your bank, broker, trust or other nominee. You may be able to vote by telephone or through the Internet if your bank, broker, trust or other nominee offers these options.
Q:
What happens if I do not return a proxy card, voting instruction card or otherwise vote or vote to abstain?
A:
If you are a holder of record, the failure to return your proxy card or to otherwise vote will have the same effect as voting against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.
If your shares are held in “street name” and you do not return your voting instruction card or otherwise instruct your broker, bank or other nominee how to vote your shares, it will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.
A vote to abstain will have the same effect as voting against each proposal as to which you abstain.
 
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See “The Special Meeting of the Company’s Stockholders — Votes Required; Treatment of Abstentions and Broker Non-Votes.”
Q:
What does it mean if I receive more than one set of materials?
A:
This means you own shares of Company common stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must complete, sign, date and return each of the proxy or voting instruction cards that you receive, or vote all of your shares over the telephone or the Internet in accordance with the applicable instructions in order to vote all of the shares you own. Any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, and therefore any shares held in “street name” will not be combined for voting purposes with shares you hold of record. Each set of proxy materials you receive comes with its own prepaid return envelope and control number(s); if you vote by mail, make sure you return each proxy or voting instruction card in the return envelope that accompanies that proxy or voting instruction card, and if you vote by telephone or over the Internet, use the control number(s) on each proxy or voting instruction card, as applicable.
Q:
Why am I being asked to consider and vote on the non-binding named executive officer merger-related compensation proposal?
A:
SEC rules require the Company to seek approval on a non-binding, advisory basis with respect to certain payments that will or may be made to the Company’s named executive officers in connection with the merger. Approval of the non-binding named executive officer merger-related compensation proposal is not required to complete the merger.
Q:
What happens if I sell my shares of Company common stock before the special meeting?
A:
The record date for the special meeting is earlier than the expected date of the merger. If you own shares of Company common stock as of the close of business on the record date but transfer your shares prior to the date of the special meeting, you will retain your right to vote at the special meeting, but the right to receive the merger consideration will pass to the person who holds your shares immediately prior to the effective time of the merger.
Q:
Am I entitled to appraisal rights?
A:
Under Section 262 of the DGCL, a stockholder will be entitled to dissent and to seek appraisal for its shares only if certain criteria are satisfied. See the section entitled “Appraisal Rights” and Annex C of this proxy statement.
Q:
Will I be subject to U.S. federal income tax upon the exchange of Company common stock for cash pursuant to the merger?
A:
The exchange of Company common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder of Company common stock who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.
For a more detailed description of certain U.S. federal income tax consequences of the merger, see “The Merger — Certain U.S. Federal Income Tax Consequences of the Merger” beginning on page 51.
This proxy statement contains a general discussion of certain U.S. federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it address state, local or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the merger.
 
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Q:
When do you expect the merger to be completed?
A:
The Company and Parent are working to be in a position to complete the merger as quickly as possible after the special meeting. As of the date of this proxy statement, the Company anticipates that the merger will be completed in the fourth quarter of 2022. In order to complete the merger, we must obtain the required stockholder approval, approval under the HSR Act and certain foreign competition laws, and a number of other closing conditions under the merger agreement must be satisfied or waived. See “The Merger Agreement —  Conditions of the Merger.”
Q:
What happens if the merger is not completed?
A:
In the event that the merger agreement proposal does not receive the required approval of the stockholders described elsewhere in this proxy statement, or if the merger is not completed for any other reason, the Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company expects that its management will operate the Company’s business in a manner similar to that in which it is being operated today, and the Company will remain an independent public company, the Company common stock will continue to be listed and traded on the NYSE, the Company common stock will continue to be registered under the Exchange Act, and the Company’s stockholders will continue to own their shares of the Company common stock and will continue to be subject to the same general risks and opportunities as they currently are with respect to ownership of the Company common stock. Under certain circumstances, if the merger is not completed, the Company may be obligated to pay to Parent a termination fee.
Q:
Should I send in my stock certificates now?
A:
No. At or about the date of completion of the merger, if you hold certificated shares, you will receive a letter of transmittal with instructions informing you how to send in your stock certificates to Parent’s paying agent in order to receive the merger consideration. You should use the letter of transmittal to exchange stock certificates for the merger consideration to which you are entitled as a result of the merger. PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY OR OTHERWISE SEND THEM TO THE COMPANY, PARENT OR THE PROXY SOLICITATION AGENT.
If you are a beneficial owner of shares of Company common stock, you will receive instructions from your broker, bank or other nominee as to how to surrender your shares and receive the merger consideration for those shares following the completion of the merger.
Q:
Who can help answer my questions?
A:
The information provided above in the Q&A format is for your convenience only and is merely a summary of some of the information in this proxy statement. You should carefully read the entire proxy statement, including its annexes and the documents referred to or incorporated by reference herein. If you would like additional copies of this proxy statement, without charge, or if you have questions about the merger, including the procedures for voting your shares, you should contact the Company’s proxy solicitation agent:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Telephone (toll-free): (800) 322-2885
You may also wish to consult your legal, tax and/or financial advisors with respect to any aspect of the merger, the merger agreement or other matters discussed in this proxy statement.
 
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement and the documents incorporated into it by reference contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company including, but not limited to, statements related to the proposed acquisition of the Company and the anticipated timing, results and benefits thereof; and statements regarding the expectations and beliefs of the Company Board and management and other statements that are not historical facts. You can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are based on each of the companies’ current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties, many of which are beyond the Company’s control. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with the Company’s ability to complete the merger on the proposed terms or on the anticipated timeline, or at all, including:

risks and uncertainties related to securing the necessary regulatory and stockholder approvals and the satisfaction of other closing conditions to consummate the merger;

the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

risks related to diverting the attention of Company management from ongoing business operations;

risk that the proposed merger disrupts the Company’s current operations;

significant transaction costs and/or unknown or inestimable liabilities;

the risk of stockholder litigation in connection with the merger, including resulting expense or delay;

disruption from the proposed transaction, making it more difficult to conduct business as usual or maintain relationships with customers, employees, suppliers or other third parties;

effects relating to the announcement of the merger or any further announcements or the consummation of the merger on the market price of the Company’s common stock;

the effect of the announcement or pendency of the merger on the Company’s ability to retain and hire key personnel and other employees or the Company’s business relationships (including customers and suppliers), operating results and business generally;

limitations placed on the Company’s ability to operate its business under the merger agreement;

the occurrence of any event that could give rise to the termination of the merger agreement, including under circumstances that require the Company to pay Parent a termination fee;

regulatory initiatives and changes in tax laws;

the impact of the COVID-19 pandemic on the operations and financial results of the Company;

market volatility;

the financial performance of the Company through the completion of the merger;

general economic conditions; and

other risks and uncertainties affecting the Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Company’s filings and reports, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, and future filings and reports by the Company.
All of the forward-looking statements in this proxy statement are qualified by the information contained or incorporated by reference into this proxy statement. See the section entitled “Where You Can Find More Information” beginning on page 85 of this proxy statement.
 
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Moreover, other risks and uncertainties of which the Company is not currently aware may also affect its forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The Company cautions investors that such forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such forward-looking statements.
The forward-looking statements in this proxy statement are made only as of the date hereof or as of the dates indicated in the forward-looking statements and reflect the views stated therein with respect to future events as at such dates, even if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.
 
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THE PARTIES TO THE MERGER
Hill International, Inc.
Hill International, Inc. is a Delaware corporation with more than 3,000 professionals in 100 offices worldwide. The Company provides project management, construction management, facilities management and other consulting services primarily to the building, transportation, environmental, energy and industrial markets. The Company’s executive offices are located at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA 19103. The Company’s telephone number is (215) 309-7700. For additional information about the Company, see “Where You Can Find More Information” or visit Company’s website at https://www.hilintl.com. The information provided on the Company’s website is not part of this proxy statement and is not incorporated by reference in this proxy statement.
Global Infrastructure Solutions Inc.
GISI is the largest privately owned construction manager in the commercial building, industrial and healthcare markets, and a leading project/construction manager in the environmental and public infrastructure sectors. Through the dedicated efforts of its more than 8,500 employees, it generates annual revenue of approximately $11 billion, and enjoys project backlog of more than $22 billion. Parent’s executive office is located at 660 Newport Center Drive, Suite 940, Newport Beach, CA 92660. Parent’s telephone number is (213) 640-8159. Parent’s website address is https://www.gisi.com. The information provided on Parent’s website is not part of this proxy statement and is not incorporated by reference in this proxy statement.
Liberty Acquisition Sub Inc.
Liberty Acquisition Sub Inc. is a wholly owned subsidiary of Parent, whose principal executive offices are located at 660 Newport Center Drive, Suite 940, Newport Beach, CA 92660. Merger Sub’s telephone number is (213) 640-8159. Merger Sub was formed solely for the purpose of facilitating Parent’s acquisition of the Company.
 
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THE SPECIAL MEETING OF THE COMPANY’S STOCKHOLDERS
We are furnishing this proxy statement as part of the solicitation of proxies by the Company Board for use at the special meeting and at any properly convened meeting following an adjournment or postponement of the special meeting.
Time, Place and Purpose of the Special Meeting
The Company will hold the special meeting at One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103 on Wednesday, November 2, 2022, at 10:00 a.m. Eastern Time. The purpose of the special meeting is to consider and vote on the merger agreement proposal, the non-binding named executive officer merger-related compensation proposal and the adjournment proposal. We intend to hold the special meeting in person, but we are actively monitoring the coronavirus pandemic (COVID-19). We are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. If it is not possible or advisable to hold the special meeting in person or we otherwise determine that alternative arrangements are necessary, we will announce those alternative arrangements as promptly as practicable. Please refer to the accompanying proxy statement for where to find additional information on such announcements, if any.
Who Can Vote at the Special Meeting
Only holders of record of the Company common stock, as of the close of business on September 29, 2022, which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. If you own shares that are registered in the name of someone else, such as a broker, bank or other nominee, you need to direct that person how to vote those shares or obtain an authorization from them and vote the shares yourself at the special meeting. As of the close of business on the record date, there were 57,331,357 shares of Company common stock outstanding.
Quorum for the Special Meeting
To conduct any business at the special meeting, a quorum must be present in person or by proxies. The holders of a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, represented in person or by proxy, will constitute a quorum for the transaction of business at the special meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. As of the close of business on the record date, there were 57,331,357 shares of the Company common stock outstanding. Accordingly, 28,665,679 shares of the Company common stock must be represented in person or by proxy at the special meeting to constitute a quorum.
If you are a Company stockholder of record and you vote by mail, by telephone or through the Internet or at the special meeting, then your shares of Company common stock will be counted as part of the quorum. If you are a “street name” holder of shares of Company common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares of Company common stock will be counted in determining the presence of a quorum. If you are a “street name” holder of shares of Company common stock and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares of Company common stock will not be counted in determining the presence of a quorum.
Once a share of Company common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum and any adjournment of the special meeting, unless the holder is present solely to object to the special meeting. However, if a new record date is set for an adjourned meeting, a new quorum will have to be established.
Votes Required; Treatment of Abstentions and Broker Non-Votes
Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock.
Approval of each of the non-binding named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of shares of Company common stock represented in person or by proxy having a majority of the votes entitled to vote thereon.
 
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A vote to abstain will have the same effect as voting against each proposal as to which you abstain.
If you are a holder of record, failure to submit a proxy or to vote at the special meeting will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.
If your shares of Company common stock are held in “street name” by your broker, you should instruct your broker how to vote your shares using the enclosed voting instruction card provided by your broker. Under applicable regulations, brokers, banks and other nominees who hold shares in “street name” for customers may not exercise their voting discretion with respect to non-routine matters such as the proposals to be voted upon at the special meeting. As a result, if you do not instruct your broker, bank or other nominee how to vote your shares of Company common stock, your shares will be treated as “broker non-votes” and will not be voted, which will have the same effect as voting against the merger agreement proposal. Broker non-votes will not, however, have any effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.
How to Vote
Stockholders have a choice of voting by proxy by completing a proxy card and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or through the Internet. Please refer to your proxy card or the information forwarded by your bank, broker, trust or other nominee to see which options are available to you. The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m., Eastern Time on the day before the special meeting.
If you are a holder of record and sign and return a proxy card but do not include “FOR,” “AGAINST” or “ABSTAIN” on a proposal to be voted, your shares of Company common stock will be voted in favor of that proposal.
If you wish to vote by proxy and your shares of common stock are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of Company common stock, your bank, broker, trust or other nominee will not be able to vote your shares on the proposals.
If you are an employee of the Company and participate in the Plan, the enclosed voting instruction form indicates the aggregate number of shares of common stock credited to your account as of September 29, 2022, the record date for voting at the special meeting. If you timely submit your voting instructions to the Trustee by following the instructions on the enclosed voting instruction form, your shares will be voted as you have directed. If you do not provide the Trustee with voting instructions, the Trustee will vote your Plan shares in the same proportion as the shares for which the Trustee receives voting instructions from other participants in the Plan. The Trustee must receive your voting instructions no later than November 1, 2022. Please note that Plan participants may vote their shares through the Trustee only and accordingly may not vote their Plan shares in person at the special meeting.
The stockholders of record as of the close of business on the record date for the special meeting, their duly appointed proxy holders, and the “street name” stockholders who beneficially owned shares of Company common stock as of the close of business on the record date are entitled to participate in the special meeting. Registered stockholders may be admitted to the special meeting upon providing picture identification. If you own shares in street name (i.e., your shares are held in street name through a broker, bank, trustee or other nominee), you must also bring your most recent brokerage statement, along with picture identification, to the meeting. We will use your brokerage statement to verify your ownership of common stock and admit you to the special meeting.
Please note that cameras, sound or video recording equipment, or other similar equipment, electronic devices, large bags or packages will not be permitted in the special meeting.
If you have any questions about how to vote or direct a vote in respect of your shares of Company common stock, you may contact our proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885.
 
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YOU SHOULD NOT SEND IN YOUR SHARE CERTIFICATE(S) WITH YOUR PROXY CARD.    A letter of transmittal with instructions for the surrender of certificates representing shares or book-entry shares will be mailed to stockholders if the merger is consummated.
Revocation of Proxies
Any proxy given by a Company stockholder may be revoked at any time before it is voted at the special meeting by doing any of the following:

submitting another proxy by telephone or through the Internet, in accordance with the instructions on the proxy card;

delivering a signed written notice of revocation bearing a date later than the date of the proxy to William H. Dengler, Jr., Corporate Secretary, Hill International, Inc., One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA 19103 stating that the proxy is revoked;

submitting a later-dated proxy card relating to the same shares of Company common stock; or

attending the special meeting and voting at the meeting (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote at the special meeting).
Street name” holders of shares of Company common stock should contact their bank, broker, trust or other nominee to obtain instructions as to how to revoke or change their proxies.
Adjournments
Although it is not currently expected, the special meeting may be adjourned one or more times in accordance with the merger agreement to a later day or time if necessary or appropriate, including to solicit additional proxies in favor of the merger agreement proposal. Your shares will be voted on any adjournment proposal in accordance with the instructions indicated in your proxy or voting instruction card. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the Company common stock represented in person or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting in accordance with the merger agreement until a quorum shall be present. If the adjournment is for more than 60 days after the date of this proxy statement, or if a new record date is set for the adjourned meeting, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting. In addition, the special meeting could be postponed before it commences, subject to the terms of the merger agreement. If the special meeting is adjourned or postponed, stockholders who have already submitted their proxies or voting instructions will be able to revoke them at any time prior to the final vote on the proposals. If you are a holder of record and return a proxy without indicating how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.
Householding
Certain stockholders of the Company who share an address are being delivered only one copy of this proxy statement unless the Company or one of its mailing agents has received contrary instructions. SEC regulations permit the Company to send a single set of proxy materials, which includes this proxy statement, to two or more stockholders that share the same address. Each stockholder will continue to receive his or her own separate proxy card. Upon written or oral request, the Company will promptly deliver a separate set of proxy materials to a stockholder at a shared address that only received a single set of proxy materials for this year. If a stockholder would prefer to receive his or her own copy, please contact William H. Dengler, Jr., Corporate Secretary, at the Company’s principal executive office: One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA 19103; by telephone at (215) 309-7700; or by email addressed to hil@openboard.info. Similarly, if a stockholder would like to receive his or her own set of the Company’s proxy materials in future years or if a stockholder shares an address with another stockholder and both would like to receive only a single set of the Company’s proxy materials in future years, please contact Mr. Dengler.
Solicitation of Proxies
The Company is soliciting the enclosed proxy card on behalf of the Company Board, and the Company will bear the expenses in connection with the solicitation of proxies. In addition to solicitation by mail, the
 
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Company and its directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.
The Company has engaged MacKenzie Partners, Inc., or MacKenzie, to assist in the solicitation of proxies for the special meeting and will pay MacKenzie a fee of approximately $15,000, plus reimbursement of out-of-pocket expenses. The address of MacKenzie is 1407 Broadway, 27th Floor, New York, NY 10018. You can call MacKenzie toll-free at (800) 322-2885.
Recommendation of the Company Board
After consideration of various factors, including the factors described in the section entitled “The Merger — Recommendation of the Company Board and Reasons for the Merger,” the Company Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, (ii) authorized and approved the merger agreement and the other transactions contemplated by the merger agreement, including the merger, and directed the senior officers of the Company to execute and deliver the merger agreement, (iii) directed that the merger agreement and the transactions contemplated thereby, including the merger, be submitted to the Company’s stockholders for adoption at the special meeting in accordance with the merger agreement and (iv) recommended that the Company’s stockholders vote in favor of the adoption and approval of the merger agreement and the transactions contemplated thereby, including the merger.
Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.
Questions and Additional Information
If you have more questions about the merger, the special meeting or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Telephone (toll-free): (800) 322-2885
 
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THE MERGER (PROPOSAL 1)
The discussion of the merger and the merger agreement in this proxy statement is qualified in its entirety by reference to the complete text of the merger agreement, which is attached to this proxy statement as Annex A. You should read the merger agreement carefully in its entirety.
Background of the Merger
The following chronology summarizes key meetings and events that led to the signing of the merger agreement. The following chronology does not purport to catalogue every communication among the Company Board, representatives of Hill and other parties.
The Company Board and Hill executive management periodically review and assess Hill’s results of operations, financial position, business strategy and prospects, as well as the trends and conditions affecting Hill’s industry and business generally. Such assessments include periodic meetings or consultations with third-party advisors, as well as consideration of potential strategic and financial alternatives to enhance stockholder value, including potential sale transactions. Hill executive management and certain members of the Company Board also engage in general discussions from time to time with various parties, including strategic parties and financial sponsors, as well as financing sources, market participants and investment banking firms, regarding Hill’s business, strategy and growth opportunities, including opportunities for collaboration, potential business combinations, acquisitions and financing transactions.
In July 2017, Hill entered into a letter agreement with Houlihan Lokey Capital, Inc. (which we refer to as “Houlihan Lokey”) pursuant to which Hill retained Houlihan Lokey to act as its exclusive financial advisor with respect to Hill’s continuing review of its corporate strategic posture and to assist Hill in executing on certain identified, preferred strategic alternatives available to Hill. Under the letter agreement, Houlihan Lokey’s services were divided into two phases. In the first phase, Houlihan Lokey agreed to perform a strategic analysis focusing on evaluation and analysis of Hill. In the second phase, Houlihan Lokey agreed to act as Hill’s exclusive financial advisor and/or placement agent to provide investment banking and related financial services in connection with a possible liquidity transaction, including a possible sale of Hill.
In February 2018, Hill initiated a sale process in which Houlihan Lokey confidentially reached out to 124 potential strategic and financial buyers. Between March 2018 and May 2018, 62 potential buyers subsequently entered into confidentiality agreements, of which five potential buyers, including GISI and Company A, submitted indications of interest. Ultimately, only GISI submitted a formal, final-round indication of interest in July 2018. GISI’s July 2018 proposal contemplated a potential transaction in which GISI would purchase certain assets and assume certain liabilities relating to certain of Hill’s regional businesses for consideration comprised of (i) cash at closing of $224.0 million, (ii) a $160.0 million one-time earnout payment in cash contingent upon achievement of certain performance benchmarks in 2019, and (iii) up to approximately $34.5 million in cash to the extent the accounts receivable owed to Hill by Libya (which would be retained by Hill in the proposed transaction) were collected. Hill would also retain all debt and debt-equivalents and certain other liabilities that remained outstanding at closing of the proposed transaction. In August 2018, after discussion among the Company Board, the Company Board determined that remaining an independent company was in the best interests of Hill’s stockholders at the time and declined to accept GISI’s July 2018 due in part to the fact that the cash consideration proposed to be delivered at closing represented a discount to the trading price per share of Company common stock on the NYSE at the time and a lack of confidence that the earnout payment could be achieved. In September 2018, Hill and Houlihan Lokey terminated the July 2017 letter agreement.
In September 2019, Hill received an unsolicited non-binding indication of interest from GISI to acquire all of the shares of Company common stock for a price of $3.76 in cash per share, reflecting a cash premium of 26% to the 30-day volume weighted average closing share price of the Company common stock ended on the date of the non-binding indication of interest. After discussion among the Company Board, the Company Board determined that remaining an independent company was in the best interests of Hill’s stockholders at the time and declined to accept GISI’s 2019 proposal.
In September 2020, Hill received an unsolicited non-binding indication of interest from GISI to acquire all of the shares of Company common stock for a price of $3.00 in cash per share, reflecting a
 
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premium of 101% and 93% to Hill’s 3-month and 6-month volume weighted average share price of the Company common stock to the date of the non-binding indication of interest, respectively.
In October 2020, in light of the September 2020 unsolicited indication of interest from GISI, Hill entered into a new letter agreement with Houlihan Lokey re-engaging Houlihan Lokey to initiate a more focused sale process targeting a smaller group of potential buyers. The October 2020 letter agreement was on substantially the same terms as the 2017 letter agreement with Houlihan Lokey, except that the October 2020 letter agreement contemplated a new initial term of twelve months commencing on the date of the new letter and modified the terms of the liquidity fee payable to Houlihan Lokey in connection with a transaction. Of the potential buyers contacted through this process, only GISI expressed interest in pursuing a transaction with Hill at the time.
In November 2020, Hill entered into a confidentiality agreement with GISI and GISI was granted access to a data room for purposes of conducting due diligence in connection with GISI’s evaluation of a potential transaction with Hill.
In January 2021, Hill entered into a confidentiality agreement with Company A in connection with Company A’s evaluation of a potential transaction with Hill and Company A was granted access to a data room for purposes of conducting due diligence in connection therewith.
In February 2021, Hill received a revised indication of interest from GISI to acquire all of the shares of Company common stock for cash consideration reflecting an enterprise valuation at the time of $210 – $240 million. From February 2021 through March 2021, representatives of Hill executive management and representatives of Duane Morris LLP, Hill’s outside counsel also serving as transaction counsel to Hill (which we refer to as “Duane Morris”), and representatives of GISI and representatives of its outside legal counsel, discussed potential transaction structures and purchase price. Ultimately, GISI verbally proposed to acquire all of the outstanding shares of Company common stock for a price of $3.25 in cash per share. However, in late March 2021, GISI declined to further pursue the proposed transaction citing its uncertainty at the time about acquiring Hill’s international business.
Company A also indicated in late March 2021 that it was not interested in pursuing a transaction with Hill at that time.
In November 2021, Hill received an unsolicited non-binding indication of interest from Company A pursuant to which Company A proposed to acquire all of the shares of Company common stock for price between $2.80 and $3.00 in cash per share of Company common stock, representing a premium between 31% and 40% over the 30 days average volume weighted trading price of the Company common stock as of the date of the non-binding indication of interest. The Company Board and representatives of Houlihan Lokey met virtually to discuss Company A’s proposal, at which point the Company Board agreed to form an ad hoc committee of directors comprised of David Sgro, Arnaud Ajdler and Grant McCullough to coordinate discussions with Houlihan Lokey and Company A. From November 2021 through May 2022, representatives of Hill, including members of the ad hoc committee, representatives of Houlihan Lokey and representatives of Duane Morris, continued to discuss the terms of a potential acquisition of Hill with representatives of Company A, including members of Company A’s management, its financial advisors and its outside legal counsel.
At two meetings of the Company Board in January 2022, Mr. Sgro provided updates to the Company Board with respect to ongoing discussions with Company A and, at a meeting of the Company Board in February 2022, Mr. Sgro reported to the Company Board that Company A offered to acquire Hill at a price of $2.90 in cash per share of Company common stock and submitted a proposed work plan for Hill’s consideration.
At a meeting of the Company Board in March 2022 at which members of Hill executive management and representatives of Duane Morris were present, Mr. Sgro provided an update on Company A’s proposal of a potential deal structure involving a management buyout of a majority of Hill’s international business. Representatives of Duane Morris made a presentation on the Company Board’s fiduciary duties under Delaware law in the context of a sale transaction. The Company Board formed a special committee to review any potential strategic transaction involving Hill and appointed Messrs. Sgro, Ajdler and McCullagh as
 
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members (the “Special Committee”). At Company Board meetings at the end of March 2022 and in May 2022, Mr. Sgro provided the Company Board with further updates regarding ongoing discussions with Company A.
In April 2022, representatives of Company B contacted members of Hill executive management to express an interest in pursuing a transaction with Hill. In turn, members of Hill executive management informed the Company Board of Company B’s outreach and the Company Board directed representatives of Houlihan Lokey to contact representatives of Company B to further discuss Company B’s interest in Hill. In April 2022, Hill entered into a confidentiality agreement with Company B in furtherance of Company B’s evaluation of a potential transaction with Hill and Company B was granted access to a data room for purposes of conducting due diligence in connection therewith. After further discussion with Company B, it became apparent that Company B was interested in acquiring Hill’s domestic business only.
At a meeting of the Company Board in May 2022, Mr. Sgro reported to the Company Board that the Special Committee had directed representatives of Houlihan Lokey to send process letters to Company A and Company B requiring them to respond on or before June 1, 2022. Mr. Sgro also reported at the meeting that he had spoken with representatives of Company A and that Company A was interested in Hill’s domestic business only. After deliberation by the Special Committee, Mr. Sgro informed representatives of Company A that any transaction would need to involve the acquisition of Hill’s entire business.
Later in May 2022, Mr. Sgro contacted representatives of Company C to ascertain whether Company C had interest in pursuing a potential transaction with Hill. On May 27, 2022, Hill and Company C executed a confidentiality agreement in connection with Company C’s evaluation of a potential transaction with Hill and Company C granted access to a data room for purposes of conducting due diligence in connection therewith.
On or about June 1, 2022, both Company A and Company B withdrew their interest in pursuing a transaction with Hill.
On June 13, 2022, Company C submitted an unsolicited non-binding letter of intent proposing to acquire all of the outstanding shares of Company common stock at a price of $2.45 in cash per share of Company common stock, representing an 80.8% premium over the 30-day volume weighted average price of the Company common stock on the date of the proposal of $1.361, a 69.0% premium to the 60-day volume weighted average price of the Company common stock of $1.452 and a 60.1% premium to the 90-day volume weighted average price of the Company common stock of $1.533. The letter stated that the definitive agreement in relation to the potential transaction would not be subject to any financing contingencies and that Company C anticipated financing its acquisition of Hill partly with Company C’s existing cash on hand and through new debt facilities to be arranged by Company C’s relationship banks. The letter provided that the execution of a definitive agreement would require completion of due diligence, primarily focused on business, financial, tax and legal matters, and execution of satisfactory voting agreements by certain of Hill’s significant related party stockholders. In addition, the letter provided that the consummation of a transaction would require securing the necessary competition and other regulatory clearances and proposals and fulfillment of other customary conditions, including approval of Hill’s stockholders, in the context of a transaction of the sort contemplated by Company C’s proposal. The letter requested that Hill enter into an exclusivity arrangement so that Company C and Hill could work together towards an anticipated signing of a definitive agreement with respect to the proposed transaction within 45 days after the date of Company C’s letter.
Between June 13, 2022 and June 20, 2022, the Special Committee held two meetings and the Company Board held one meeting at which Company C’s June 13, 2022 proposal was discussed. At one such meeting, the Special Committee directed representatives of Houlihan Lokey to contact representatives of Company C to discuss whether there was any flexibility in Company C’s proposed offer price. In response, representatives of Company C advised representatives of Houlihan Lokey that Company C did not expect to increase or decrease the proposed offer price. Ultimately, the Company Board authorized members of Hill executive management and representatives of Houlihan Lokey to negotiate and cause Hill to enter into an exclusivity arrangement with Company C.
On June 20, 2022, representatives of Company C’s outside legal counsel sent an initial draft of an exclusivity agreement to representatives of Houlihan Lokey. Following negotiation of the period of
 
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exclusivity and circumstances under which the exclusivity period could be extended, Company C and Hill entered into an exclusivity agreement on or about June 22, 2022, providing for exclusive negotiations until 11:59 p.m. Eastern Time on July 22, 2022, which could be extended for an additional 15 days at Company C’s request and with Hill’s consent, not to be unreasonably withheld.
On June 24, 2022, representatives of Duane Morris spoke with representatives of Company C’s transaction counsel about Company C’s June 13, 2022 proposal and certain logistical matters relating to the drafting of a definitive agreement, antitrust matters and other topics in connection therewith. Duane Morris agreed to prepare an initial draft of the definitive agreement. Over the next several days, representatives of Duane Morris and representatives of Company C’s transaction counsel held preliminary discussions about antitrust and governmental contract matters.
On July 1, 2022, representatives of Duane Morris sent a draft merger agreement to representatives of Company C’s transaction counsel. This initial draft reflected a price of $2.45 in cash per share of Company common stock, consistent with Company C’s June 13, 2022 proposal, and provided, among other things, that the transaction would be structured as a single-step merger requiring approval of Hill’s stockholders and that consummation of the proposed merger with Company C would not be subject to any financing contingencies. In addition, the draft merger agreement with Company C (i) included a 40-day “go-shop” period, during which Hill would have the right to solicit proposals after signing the proposed merger agreement with Company C, and related provisions (so-called “go-shop” provisions), (ii) provided Company C with one opportunity to “match” a superior proposal or intervening event, and (iii) included a “two-tiered” Company termination fee with a lower termination fee of 0.66% of Hill’s equity value payable if the proposed merger agreement were to be terminated by Hill to accept a superior proposal during the go-shop period (as well as after the go-shop period for certain exempted persons who approached Hill during the go-shop period) and a higher termination fee of 2.0% of Hill’s equity value after the go-shop period. The draft merger agreement with Company C also contemplated that Company C, Hill and their respective affiliates would be required to divest assets, pursue litigation and take certain other actions, if necessary, to obtain antirust approvals (a so-called “hell or high water” antitrust provision). The draft merger agreement noted that the parties were to consider whether a filing with the U.S. Committee on Foreign Investment in the United States (which we refer to as “CFIUS”) and other regulatory agencies would be required.
From July 1, 2022 through July 14, 2022, Company C and Hill held management meetings with Hill’s legal, finance, human resources and information technology personnel.
On July 14, 2022, representatives of Company C’s transaction counsel delivered a revised draft merger agreement to representatives of Duane Morris. Company C’s revised draft merger agreement provided, among other things, that Company C would not be required to consummate the proposed merger in the event that it could not obtain financing and that, accordingly, Hill could not seek specific performance of the merger agreement by Company C in such event — concepts that were not reflected in Company C’s June 13, 2022 proposal. Instead, Company C’s revised draft merger agreement contemplated only that Hill would be entitled to a reverse termination fee from Company C in an amount equal to 4.0% of Hill’s equity value in the event (i) all of the conditions to the consummation of the proposed merger (other conditions applicable to Hill’s obligation to consummate the proposed merger) were to be satisfied or waived, (ii) Hill were to confirm in writing to Company C that all of the conditions to Hill’s obligations to consummate the proposed merger were satisfied or waived and that it stood ready, willing and able to consummate the proposed merger, (iii) Company C were to fail to consummate the proposed merger at the time required, and (iv) Company C were to fail to consummate the merger within four business days after Hill had delivered the confirmation referred to in the foregoing clause (ii). In addition, Company C’s revised draft merger agreement included certain covenants with respect to Company C’s obligations to obtain financing in connection with the proposed merger and Hill’s obligations to assist Company C in obtaining such financing. Company C’s draft merger agreement also removed the go-shop provisions, including removal of the two-tiered Company termination fee in favor of a single-tier termination fee of 4.0% of the equity value of Hill. Company C’s draft merger agreement included a provision requiring Hill to submit the proposed merger to a vote of Hill’s stockholders even if the merger was no longer recommended by the Company Board (a so-called “force the vote” provision). Company C’s revised draft merger agreement also revised certain other “fiduciary out” provisions including revisions providing for continuous, “last look” matching rights (instead of a single opportunity to match) with respect to superior proposals and intervening events. Company C’s
 
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revised draft merger agreement removed the “hell or high water” antitrust provision in favor of a regime in which Company C would not be obligated to (i) defend or litigate any government challenge, (ii) divest any of its or its affiliates’ assets or modify any of their contractual rights (instead limiting any proposed remedies to assets and contracts of Hill and its subsidiaries), (iii) limit its conduct except as to assets and contracts of Hill and its subsidiaries, (iv) agree to any remedy that would impair the ability of Company C to operate its assets or businesses; (v) agree to a remedy as to assets, properties, businesses or product lines of Hill or its subsidiaries material to Hill and its subsidiaries, and (vi) propose or agree to any remedy to address any legal proceeding by anyone other than a governmental entity. Company C’s revised draft merger agreement also contemplated that consummation of the proposed merger would be conditioned upon the approval of both CFIUS and the Defense Counterintelligence and Security Agency (which we refer to as “DCSA”). The revised merger agreement also contemplated that certain, then-unidentified significant related party stockholders would be required to enter into voting agreements pursuant to which they would be obligated to vote shares of Company common stock beneficially owned by them in favor of the adoption of the proposed merger agreement. The revised draft merger agreement also (i) expanded the scope of Hill’s representations and warranties, (ii) imposed additional restrictions on Hill and its operations between signing of the proposed merger agreement and closing thereunder, (iii) imposed limitations on Hill’s ability to adjourn or postpone the Company Stockholders Meeting, (iv) further revised the no-solicitation provision to require, among other things, that certain information be provided to Company C regarding any third party acquisition proposals and inquiries, and (v) expanded the circumstances in which Hill would be required to pay a termination fee in the event the proposed merger agreement were to be terminated and Hill were to be acquired by a third party thereafter.
From July 19, 2022 through August 3, 2022, Hill received several unsolicited offers or inquiries from financial and strategic buyers regarding a potential acquisition of Hill, including an unsolicited offer from Godspeed Capital Management LP (which we refer to as “Godspeed”) to acquire 100% of Hill’s issued and outstanding shares of Company common stock and equivalents for a price of $1.85 in cash per share in cash, representing a premium of 11.4% over the thirty day trailing average closing price of the Company common stock on the NYSE on July 18, 2022 and a premium of 56.78% over the 52-week low achieved on May 10, 2022. Godspeed publicly disclosed its proposal on the same day it submitted the proposal to the Company Board. Hill did not respond to unsolicited proposals or inquiries while under exclusivity with Company C.
On July 19, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss the Godspeed’s July 19, 2022 proposal and a non-public inquiry from a representative of Company D regarding a potential transaction with Hill. Following that discussion, in light of ongoing negotiations and exclusivity with Company C and receipt of unsolicited proposals from other potential buyers, representatives of Duane Morris provided a brief summary of fiduciary duties of directors under Delaware law in the context of a sale transaction. Thereafter, representatives of Duane Morris led a discussion of material issues with respect to Company C’s July 14, 2022 revised draft merger agreement. The discussion highlighted, among other things, removal of the go-shop provisions, revisions to the “fiduciary out” provisions limiting the Company Board’s ability to entertain other proposals or make a change in recommendation, that closing of the proposed merger would not occur unless Company C obtained financing to fund its payment obligations in connection with the proposed merger (the “financing condition” provisions), revisions to the antitrust and other regulatory approval requirements, and the impact of the foregoing, among other things, on deal certainty. In response to a request from representatives of Company C to extend the exclusivity period, the Special Committee determined that, subject to further discussion with the Company Board, representatives of Houlihan Lokey should inform Company C that Hill would not extend the exclusivity arrangement unless Company C agreed to remove the financing condition provisions. Also on July 19, 2022, Company C’s transaction counsel delivered an initial draft form of voting agreement to representatives of Duane Morris.
On July 21, 2022, the Company Board met virtually with members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris to discuss Company C’s July 14, 2022 revised draft merger agreement and whether to extend the exclusivity arrangement with Company C. The discussion with the Company Board initially focused on the financing condition provisions contained in Company C’s revised draft merger agreement. The Company Board also discussed the receipt of unsolicited proposals and inquiries from other potential buyers, including Godspeed and Company D, noting that all
 
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of such proposals and inquiries were inferior, from a financial point of view, to Company C’s proposed offer. The Company Board then authorized Hill to extend the exclusivity arrangement with Company C subject to Company C’s agreement to remove the financing condition provisions from the proposed merger agreement. Following that discussion, representatives of Duane Morris then led a discussion of material issues contained in Company C’s July 14, 2022 revised draft merger agreement. That discussion highlighted the other material issues discussed at the July 19, 2022 meeting of the Special Committee.
On July 22, 2022, in light of ongoing discussions and due diligence with respect to the proposed merger with Company C, Hill and Company C entered into a letter agreement to extend the exclusivity period until 11:59 p.m. Eastern Time on August 7, 2022. In the letter, Company C acknowledged that it intended to complete the proposed merger on the terms set forth in Company C’s June 13, 2022 proposal, including with respect to (i) the proposed price per share of Company common stock, (ii) Company C’s intent that there be no financing condition to its obligation to consummate the proposed merger and (iii) that there be no limitation on Hill’s ability to specifically enforce Company C’s obligation to consummate the proposed merger on the terms set forth in the draft merger agreement.
On July 24, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss proposed revisions to Company C’s July 14, 2022 revised draft merger agreement in light of prior discussions among the Special Committee and with the Company Board.
On July 25, 2022, representatives of Duane Morris delivered a revised draft merger agreement to representatives of Company C’s transaction counsel. Consistent with the July 22, 2022 letter agreement extending the exclusivity period, the revised draft merger agreement provided that Company C’s obligation to consummate the proposed merger would not be subject to a financing condition and removed limitations on Hill’s ability to seek specific performance. In addition, the revised draft merger agreement reinserted the go-shop provisions and the two-tiered Company termination fee, but increased the lower termination fee to 1.0% of Hill’s equity value (up from 0.66% proposed in Hill’s initial draft merger agreement) and increased the higher termination fee to 3.0% of Hill’s equity value (up from 2.0% proposed in Hill’s initial draft merger agreement). The revised draft also reinstated a single match right in favor of Company C with respect to superior proposals and intervening events in lieu of Company C’s proposal for continuous, last look matching rights. The revised draft also removed the “force the vote” provision and reinstated certain “fiduciary out” provisions. The revised draft merger agreement reinserted the “hell or high water” antitrust provision and indicated to Company C that the requirement to obtain CFIUS and DCSA approvals remained subject to further discussion between Hill and Company C. The revised draft merger agreement also included a request for a list of stockholders to be required by Company C to enter into voting agreements with Company C. Further, the revised draft merger agreement (i) narrowed the scope of certain of Hill’s representations and warranties, (ii) narrowed the scope of restrictions on Hill and its operations between signing of the proposed merger agreement and closing thereunder, including revisions to allow Hill to seek to refinance its existing credit facilities, (iii) rejected certain of the limitations on Hill’s ability to adjourn or postpone the Company Stockholders Meeting, (iv) rejected certain of Company C’s changes with respect to the no-solicitation provision, and (v) limited the circumstances in which Hill would be required to pay a termination fee in the event the proposed merger agreement were to be terminated and Hill were to be acquired by a third party thereafter.
Also on July 25, 2022, the Special Committee met with members of Hill executive management to discuss agenda topics for a management meeting that was scheduled for July 26, 2022 with representatives of Company C at Houlihan Lokey’s office in New York City. The following day, members of Hill executive management met with representatives of Company C at Houlihan Lokey’s office in New York City to discuss financial, operational and other matters.
On July 31, 2022, representatives of Duane Morris and representatives of Company C’s transaction counsel met virtually to discuss in detail Duane Morris’s revised draft merger agreement and Company C’s positions with respect to the changes reflected therein. Representatives of Duane Morris emphasized to representatives of Company C’s transaction counsel that the go-shop provisions, matching rights, other fiduciary out-related provisions and deal certainty matters, particularly with respect to the “hell or high water” antitrust provision and other regulatory approvals, were of critical importance to the Company Board at that point.
 
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On August 1, 2022, representatives of Company C’s outside legal counsel delivered a revised draft merger agreement to representatives of Duane Morris. Again, Company C’s revised draft merger agreement removed the go-shop provisions, reinstated its single-tier termination fee of 4.0% of the equity value of Hill, provided for continuing matching rights with respect to superior proposals and intervening events, and reinstated the “force the vote” provision. The revised draft merger agreement narrowed the scope of the “hell or high water” antitrust provision, including limiting divestiture obligations (and other behavioral remedies) to Hill and its subsidiaries and only with respect to assets, properties, businesses or product lines of Hill and its subsidiaries that would, individually or in the aggregate, not be material to Hill and its subsidiaries, taken as a whole. The draft merger agreement also provided that CFIUS and DCSA approvals would be required in order to consummate the proposed merger. The revised draft merger agreement indicated that all Hill directors and Hill’s chief executive officer and chief financial officer (including their respective affiliated companies) would be required to enter into voting agreements with Company C. In addition, Company C’s revised draft merger agreement and subsequent drafts of the proposed merger agreement exchanged between Hill and Company C thereafter continued to reflect negotiations regarding (i) Hill’s representations and warranties, (ii) the scope of restrictions on Hill and its operations between signing of the proposed merger agreement and closing thereunder, particularly with respect to Hill’s ability to seek to refinance its existing credit facilities, (iii) the circumstances in which Hill would be entitled to adjourn or postpone the Company Stockholders Meeting, (iv) the no-solicitation and fiduciary out provisions, and (v) the circumstances in which Hill would be required to pay a termination fee.
On August 1, 2022, Company D submitted an unsolicited expression of interest to explore a potential transaction to acquire all of the outstanding shares of Company common stock for cash but with no specified price.
On August 2, 2022, GISI delivered an unsolicited non-binding letter of intent to Hill proposing to acquire all of the shares of Company common stock for a price of $2.27 in cash per share of Company common stock. In addition, the Special Committee met virtually with members of Hill executive management and representatives of Imperial Capital to discuss the refinancing process with Imperial Capital and an offer and request for exclusivity from a financing source.
On August 3, 2022, the Company Board held a regularly scheduled quarterly meeting. At this meeting, a representative of Duane Morris made a presentation to the Company Board regarding directors’ fiduciary duties under Delaware law in the context of a sale transaction.
Also on August 3, 2022, the Special Committee met virtually with members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris to discuss Company C’s August 1, 2022 revised draft merger agreement and GISI’s August 2, 2022 proposal. Again, the discussion regarding Company C’s revised draft merger agreement focused on deal certainty, particularly with respect to antitrust and other regulatory approvals, and Company C’s removal of the go-shop provisions, reinsertion of continuous matching rights in favor of Company C, the termination fee and changes to fiduciary out provisions.
On August 4, 2022, representatives of Duane Morris and representatives of Company C’s outside legal counsel met virtually to discuss Company C’s August 1, 2022 revised draft merger agreement. Representatives of Duane Morris continued to emphasize to representatives of Company C’s outside legal counsel the Special Committee’s and the Company Board’s focus on the importance that the terms of any transaction agreement reflect the Special Committee’s due consideration and appropriate discharge of its fiduciary duties in the context of a sale transaction and deal certainty.
On August 5, 2022, representatives of Duane Morris delivered a revised draft merger agreement and a revised draft form of voting agreement to representatives of Company C’s outside legal counsel. Again, the revised draft merger agreement reinserted the go-shop provisions, the two-tiered Company termination fee with a lower termination fee of 1.0% of Hill’s equity value and a higher termination fee of 3.0% of Hill’s equity value (in lieu of Company C’s proposal for a single-tier termination fee of 4.0% of Hill’s equity value), provided for a single match right with respect to superior proposals and intervening events (in lieu of Company C’s proposal for continuous, “last look” matching rights) and removed the “force the vote” provision. The revised draft merger agreement reinserted the “hell or high water” antitrust provision and indicated to Company C that the requirement to obtain approvals of CFIUS and DCSA remained subject
 
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to further discussion. Further, the revised draft merger agreement provided that Company C would cause the surviving corporation in the proposed merger to pay all existing employees of Hill and its subsidiaries who, immediately prior to the effective time of the proposed merger with Company C, were participating in Hill’s fiscal 2022 performance bonus program the respective amounts of bonuses that such employees would have been entitled to receive in accordance with the terms of the program in effect immediately prior to the effective time of the proposed merger, regardless of whether such employees were employed by the surviving corporation at any time after the effective time of the proposed merger.
On August 7, 2022, representatives of Company C’s investment banking advisor informed representatives of Houlihan Lokey that, based on its due diligence and other matters, Company C was reducing its offer price from $2.45 in cash per share of Company common stock to $2.20 in cash per share of Company common stock and needed more time to review additional diligence materials before being in position to execute a merger agreement with Hill. Following that discussion, also on August 7, 2022, the Special Committee met virtually with members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris at which meeting representatives of Houlihan Lokey informed the Special Committee of the foregoing and reviewed a “valuation summary” provided by Company C setting forth various items that Company C cited as reasons for Company C’s lower offer price.
At 11:59 p.m. Eastern Time on August 7, 2022, the exclusivity period with Company C expired in accordance with the terms of the exclusivity agreement between Hill and Company C. Following the expiration of the exclusivity period with Company C, at the direction of the Company Board, Houlihan Lokey contacted each of the potential buyers that had submitted unsolicited offers or made inquiries regarding a potential acquisition since July 18, 2022 to gauge potential interest in entering into a merger agreement with Hill on an accelerated timeline.
On the morning of August 8, 2022, a member of Hill management received an unsolicited non-binding letter of intent from Company E to acquire Hill’s international operations for approximately $60 million.
In the early afternoon of August 8, 2022, the Special Committee met virtually with members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris to review the “valuation summary” provided by Company C as well as material issues with respect to the proposed merger agreement with Company C, specifically in relation to the go-shop provisions, the termination fee, matching rights, and antitrust and other regulatory matters. In addition, members of Hill executive management discussed with the Special Committee the non-binding letter of intent received from Company E earlier that morning. The Special Committee directed Houlihan Lokey to contact Company E about its proposal, but ultimately no further discussions were held with Company E.
Following that meeting, also on August 8, 2022, members of Hill executive management met virtually with representatives of Company C to receive Company C’s explanations with respect to the “valuation summary” and to discuss financial due diligence matters that Company C claimed remained outstanding.
In the early evening of August 8, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss an update with respect to the discussion earlier in the day between members of Hill executive management and representatives of Company C regarding financial due diligence and valuation matters. In addition, the Special Committee and the other participants at the meeting further discussed the unresolved issues contained in the proposed merger agreement. The Special Committee determined to notify Company C that it was prepared to remove the go-shop provisions and two-tier termination fee, but that the price must remain at $2.45 in cash per share of Company common stock. In addition, the Special Committee reiterated its desire for deal certainty, particularly with respect to antitrust and other regulatory matters.
On August 9, 2022, Hill entered into a confidentiality agreement with Company D in connection with Company D’s expression of interest in a potential transaction with Hill and Company D was granted access to a data room for purposes of conducting due diligence in connection therewith. However, Company D did not submit a proposal after its August 1, 2022 expression of interest.
On August 9, 2022, representatives of Company C’s outside legal counsel delivered a revised draft merger agreement and a revised draft form of voting agreement to representatives of Duane Morris. Company C’s revised draft merger agreement reflected a price of $2.35 in cash per share of Company
 
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Common Stock. Company C also removed representations and covenants regarding its potential financing of the proposed merger. The revised draft merger agreement also removed the go-shop provisions and two-tiered Company termination fee in favor of a single-tier termination fee of 3.75% of the equity value of Hill. Further, the revised draft merger agreement provided for continuing matching rights with respect to superior proposals and intervening events. The revised draft merger agreement again narrowed the scope of the antitrust provision by, among other things, limiting divestiture obligations (and other behavioral undertakings) to Company C, Hill, their respective subsidiaries and certain specified affiliates of Company C and only with respect to assets, properties, businesses or product lines of the foregoing that would, individually or in the aggregate, not be material to Hill and its subsidiaries, taken as a whole. In addition, the revised draft merger agreement again provided that approvals of CFIUS and DCSA would be required in order to consummate the proposed merger. Further, Company C’s revised draft merger agreement removed provisions requiring payment of fiscal 2022 employee performance bonuses, regardless of whether such employees were employed by the surviving corporation after the effective time of the proposed merger.
Also on August 9, 2022, Hill filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (which we refer to as the “June 30 Hill 10-Q”).
On August 10, 2022, GISI delivered a letter to Hill increasing its offer to $2.62 in cash per share of Company common stock for 100% of Hill’s fully diluted outstanding shares, reflecting a 15.0% increase to GISI’s previous offer of $2.27 in cash per share, an approximately 60.0% premium to Hill’s closing share price of $1.65 per share on the NYSE on August 9, 2022, and a premium of 11.5% to Company C’s then current offer of $2.35 in cash per share. Furthermore, GISI’s revised proposal represented an approximately 77.0% premium to Hill’s 30-day weighted average stock price and an approximately 5.0% premium to Hill’s 52-week trading high achieved on August 31, 2021. GISI also indicated in its letter that the increase in its offer price resulted from its review of Hill’s June 30, 2022 financial results contained in the June 30 Hill 10-Q. GISI also indicated in its letter that, assuming there were no significant regulatory hurdles, its intention was to structure the proposed acquisition as a cash tender offer. GISI also requested exclusive negotiation rights with Hill.
On August 10, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss the proposal received earlier that day from GISI. After discussion among the Special Committee regarding Hill’s 2021 negotiations with GISI and the current status of negotiations with Company C, the Special Committee determined to inform GISI that (i) another buyer was involved and that Hill was strongly considering entering a definitive agreement with that buyer, (ii) GISI would not be granted exclusivity, and (iii) if GISI could complete due diligence, agree to the terms contained in Hill’s August 5, 2022 draft merger agreement and be ready to execute definitive agreements before August 19, 2022, the Special Committee would consider further evaluating a proposed transaction with GISI.
On August 10, 2022, Messrs. Sgro and Ajdler held a teleconference with Rick Newman, President and Chief Executive Officer of GISI and a member of its Board of Directors, in which they reviewed GISI’s proposal, due diligence requirements and transaction timing. Messrs. Sgro and Ajdler noted that Hill could only proceed with GISI on a non-exclusive basis since Hill was already negotiating a transaction with another potential buyer. In a follow up conversation, Mr. Newman indicated that GISI would move forward with diligence on a non-exclusive basis and that GISI would do its best to meet the Special Committee’s timeline.
Also on August 10, 2022, Company C increased its offer price to $2.45 in cash per share of Company common stock. Later that day, representatives of Duane Morris and representatives of Company C’s outside legal counsel met virtually to discuss antitrust approval requirements with respect to certain international jurisdictions.
On August 11, 2022, the Company Board held a virtual meeting during which Mr. Sgro provided an update on the status of negotiations with Company C, particularly noting the changes in Company C’s offer price which culminated in an revised offer price of $2.45 in cash per share of Company common stock as of the date of the meeting. Mr. Sgro also described the revised offer from GISI, noting the increase in GISI’s offer to $2.62 in cash per share of Company common stock, and informed the Company Board that Mr. Newman informed Mr. Sgro that GISI would be prepared to enter into definitive agreements by
 
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August 19, 2022. Representatives of Duane Morris then led a discussion of the open issues under the proposed merger agreement with Company C, focusing on issues relating to the merger consideration, removal of the go-shop provisions, antitrust matters, CFIUS and DCSA approvals, matching rights with respect to superior proposals and intervening events, and the Hill termination fee. The Company Board directed the Special Committee to continue discussions with GISI while continuing to negotiate the terms of a merger agreement with Company C.
Later in the day on August 11, 2022, representatives of Duane Morris delivered a draft merger agreement to representatives of GISI and representatives of Cooley LLP, GISI’s outside legal counsel (which we refer to as “Cooley”), in substantially the same form, in relevant part, as the revised draft merger agreement delivered to Company C’s outside legal counsel on August 5, 2022 (including with respect to the “hell or high water” antitrust provision and a single match right in favor of GISI with respect to superior proposals and intervening events), but omitting (i) the go-shop provisions, which the Special Committee was prepared to agree to remove from the draft merger agreement with Company C, assuming Company C’s revised offer price remained at or above $2.45 in cash per share of Company common stock, (ii) provisions relating to CFIUS and DCSA approvals, which were not required in connection with the proposed transaction with GISI, and (iii) representations, warranties and covenants regarding financing matters with respect to the proposed transaction, which GISI did not require in connection with its proposal. The revised draft merger agreement also provided for a Company termination fee of 3.0% of Hill’s equity value. In the evening of August 12, 2022, representatives of Duane Morris delivered a further revised draft merger agreement to representatives of GISI and representatives of Cooley reflecting that GISI would commence an all-cash tender offer to acquire 100% of the issued and outstanding shares of Hill for $2.62 in cash per share of Company common stock and that, following the completion of the tender offer and subject to a minimum tender condition, GISI would acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price in cash.
On August 12, 2022 and August 13, 2022, representatives of Duane Morris and representatives of Company C’s outside legal counsel continued to exchange draft merger agreements with negotiations primarily focused on matters relating to the merger consideration, antitrust provisions, CFIUS and DCSA approvals, the extent to which Company would be entitled to continuous, “last look” matching rights with respect to superior proposals and intervening events, and payment of fiscal 2022 employee performance bonuses. Also, in light of Company C’s removal of representations and covenants regarding its potential financing of the proposed merger that were included in its August 9, 2022 revised draft merger agreement, Hill’s revised draft merger agreement included a guaranty from Company C’s parent company guaranteeing performance of Company C’s obligations under the proposed merger agreement with Company C, including payment of the merger consideration (which we refer to as the “Company C parent guaranty”).
In the evening of August 12, 2022, a representative of Company C delivered an email to Mr. Sgro informing him that Company C was increasing its offer to $2.55 in cash per share of Company common stock. In addition, representatives of Company C provided Mr. Sgro with a list of open issues regarding the draft merger agreement, particularly with respect to antitrust, CFIUS and DCSA matters, and discussed with Mr. Sgro that Company C’s parent would not be willing to provide the Company C parent guaranty.
In the morning of August 13, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss the email described above received from a representative of Company C on August 12, 2022. The Special Committee and representatives of Duane Morris discussed potential approaches in response to the issues raised by Company C’s representative, and the need to obtain certain information about the ability of Company C to fund the entirety of the cash consideration required in the proposed transaction in order to ascertain whether the Company C parent guaranty would be required.
In the afternoon of August 13, 2022, representatives of Duane Morris and representatives of Company C’s outside legal counsel met virtually to discuss the proposed merger agreement generally. Among other things, representatives of Duane Morris continued to emphasize the Company Board’s desire for deal certainty, particularly with respect to the “hell or high water” antitrust provision and CFIUS and DCSA approval matters. In the early evening of August 13, 2022, representatives of Duane Morris and representatives of Company C’s outside legal counsel met virtually to discuss antitrust matters specifically.
 
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Later in the evening of August 13, 2022, representatives of Cooley and representatives of Company C’s outside legal counsel each delivered revised draft merger agreements to representatives of Duane Morris. Concurrently with delivery of GISI’s revised draft merger agreement, representatives of Cooley delivered an initial draft of the form of tender and support agreement relating to Mr. Ajdler’s and Engine Capital’s outside legal obligations to tender shares beneficially owned by them in the proposed tender offer. Negotiations with respect to the tender and support agreement remained ongoing through August 16, 2022.
The GISI revised draft merger agreement delivered by Cooley on August 13, 2022, which generally accepted Hill’s August 12, 2022 draft merger agreement, except that GISI’s revised draft reflected the following material changes: (i) provided for continuing matching rights with respect to superior proposals and intervening events (which Hill was prepared to give to Company C at that point), (ii) contained limitations on GISI’s obligation to extend the tender offer period in the case that the minimum condition was not satisfied following the receipt of required regulatory approvals, (iii) reflected revisions to the “hell or high water” antitrust provision, (iv) provided that fiscal 2022 employee performance bonuses would not be required to be paid to employees who voluntarily terminate employment with Hill or its subsidiaries after the consummation of the proposed transactions with GISI (but such bonuses would be paid to employees who did not so terminate employment), (v) provided that Hill would be required to reimburse GISI for its reasonable costs and expenses up to 1.0% of the equity value of Hill if GISI or Hill were to terminate the proposed merger agreement in certain circumstances (which reimbursement payment would be applied against and reduce the amount of the Hill termination fee payable should such termination fee become payable under the terms of the revised draft merger agreement), and (vi) revised certain representations and warranties to be made by Hill.
Company C’s revised draft merger agreement of August 13, 2022 (i) did not reflect the increase in merger consideration reflected in the email received by Mr. Sgro from a representative of Company C on August 12, 2022, (ii) broadened (in comparison to Company C’s August 9, 2022 revised draft merger agreement) the scope of the antitrust provision, including by broadening Company C’s divestiture obligations (and other behavioral undertakings) with respect to assets, properties, businesses or product lines of Company C, Hill, their respective subsidiaries and certain specified affiliates of Company C, that would, individually or in the aggregate, not be material to Company C, Hill, their respective subsidiaries and certain specified affiliates of Company, taken as a whole (whereas Company C’s August 9, 2022 revised draft merger agreement applied the materiality standard only to Hill and its subsidiaries, taken as a whole), (iii) required CFIUS and DCSA approvals in order to consummate the proposed merger, but acknowledging that Hill could seek, with Company C’s approval, to obviate the need for such approvals by seeking novation of underlying contracts necessitating such approvals, (iv) imposed requirements and conditions with respect to the payment of performance-based employee bonuses after the effective time of the proposed merger, and (v) removed the Company C parent guaranty.
In the morning of August 14, 2022, the Special Committee, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually. At the meeting, Mr. Sgro reported that Mr. Newman informed him that GISI was satisfied with due diligence and was ready to proceed with a proposed merger with Hill and that the representative was confident that GISI was prepared to execute a merger agreement with Hill on or about August 16, 2022.
In the afternoon of August 14, 2022, representatives of Duane Morris and representatives of Cooley met virtually to discuss Cooley’s August 13, 2022 revised draft merger agreement. On August 14, 2022 and August 15, 2022, representatives of Duane Morris and representatives of Cooley continued to exchange and discuss drafts of the proposed merger agreement with negotiations primarily focused on (i) matters relating to antitrust approvals, particularly with respect to the impact that the antitrust approval process could potentially have on the structure of the proposed transaction with GISI, and (ii) Hill’s obligation to reimburse GISI for its expenses if the merger agreement was terminated in certain circumstances.
In the evening of August 14, 2022, the Company Board, a member of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss the revised draft merger agreements received from GISI and Company C on August 13, 2022 and the subsequent discussions with respective outside legal counsel. Representatives of Duane Morris summarized and compared the terms of the GISI and Company C draft merger agreements, noting, in particular, (i) GISI’s offer price of $2.62 in cash per share of Company common stock compared to Company C’s offer price of
 
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$2.55 in cash per share of Company common stock, (ii) that the proposed transaction with GISI would be structured as a two-step transaction in which GISI would first commence a tender offer and, following successful completion thereof, would be followed by a second-step merger without the need for stockholder approval, subject to the caveat that, pending further clarity regarding the timing of antitrust approval in certain international jurisdictions, the parties would agree to consider in good faith a change in structure to a single-step merger requiring approval of Hill’s stockholders, whereas the proposed transaction with Company C would be structured as a single-step merger requiring approval of Hill’s stockholders in any event, (iii) that GISI was willing to accept the “hell or high water” antitrust provision as proposed by Hill, but that, although Company C had made concessions in favor of Hill with respect to antitrust matters, Company C was not similarly willing, (iv) that the proposed transaction with GISI would not require CFIUS or DCSA approval whereas the proposed transaction with Company C would require such approvals, (v) that GISI required only Mr. Ajdler and Engine Capital to enter into tender and support agreements, whereas Company C required all directors and Hill’s chief executive officer and chief financial officer (including their respective affiliated companies) to enter into voting agreements, (vii) that GISI required Hill to reimburse it for its expenses up to 1.0% of Hill’s equity value in certain circumstances, whereas Company C did not require such reimbursement, and (viii) that GISI’s top parent entity would be the “parent entity” under, and therefore a party to, the proposed merger agreement with GISI, but that Company C’s top parent entity would not be the “parent entity” under the proposed merger agreement with Company C and was unwilling to provide the Company C parent guaranty. On August 14, 2022, as directed by the Company Board at the meeting, Mr. Sgro and representatives of Houlihan Lokey contacted representatives of GISI and representatives of Company C in order to solicit “best and final” offers.
In the late evening of August 14, 2022, representatives of Duane Morris sent a revised draft merger agreement to representatives of Cooley. At various times from August 14, 2022 through August 16, 2022, representatives of Duane Morris and representatives of Cooley continued to discuss matters relating to the proposed merger agreement between Hill and GISI, particularly with respect to antitrust matters and the expense reimbursement provision.
In the morning of August 15, 2022, a representative of Company C sent an email to Mr. Sgro informing Mr. Sgro that, among other things, Company C was declining to increase its offer of $2.55 in cash per share of Company common stock.
At noon, Eastern Time, on August 15, 2022, the Company Board, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to review the proposed respective transactions with GISI and with Company C. Mr. Sgro then described to the Company Board his communications with representatives of GISI and representatives of Company C since the last Company Board meeting. Mr. Sgro reported that representatives of Company C communicated that Company C was declining to increase its offer of $2.55 in cash per share of Company common stock. In the early part of the meeting, Mr. Newman emailed a letter to Mr. Sgro, on behalf of Hill, communicating, among other things, that GISI was increasing its offer price to $2.85 in cash per share of Company common stock, which Mr. Sgro then reported to the Company Board. Thereafter, representatives of Duane Morris again reviewed the Company Board’s fiduciary duties in connection with the Company Board’s consideration of a sale transaction in light of the circumstances, reviewing with the Company Board the terms of the proposed transaction with GISI. Representatives of Houlihan Lokey reviewed its financial analysis of Hill and GISI’s proposed offer price of $2.85 in cash per share of Company common stock. The Company Board agreed to adjourn the meeting and reconvene later in the day so that representatives of Duane Morris and representatives of Cooley could finalize the proposed merger agreement with GISI for the Company Board’s consideration. At 6:00 p.m., Eastern Time, on August 15, 2022, the Company Board reconvened the meeting. At the reconvened meeting, a representative of Houlihan Lokey again reviewed its analysis of Hill, GISI’s proposed offer price of $2.85 and rendered to the Company Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated August 16, 2022, that, as of such date GISI’s proposed offer price of $2.85 in cash per share of Company common stock to be paid to stockholders of Hill (other than Excluded Persons) pursuant to the proposed merger agreement with GISI was fair, from a financial point of view, to such holders. After further discussion and consideration of the proposed merger agreement with GISI and the other transactions contemplated by such agreement, the Company Board unanimously (i) determined that the proposed merger agreement with GISI and the transactions contemplated thereby, including the proposed tender offer and merger thereunder, are advisable
 
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and fair to, and in the best interest of, Hill and its stockholders, (ii) agreed that the merger contemplated by the proposed merger agreement with GISI would be effected under Section 251(h) of the DGCL, (iii) approved the execution, delivery and performance by Hill of the proposed merger agreement with GISI and the consummation of the transactions contemplated thereby, including the proposed tender offer and merger, and (iv) recommended that Hill’s stockholders accept the tender offer and tender their shares of Company common stock to Merger Sub pursuant to the offer, subject to the right of the Company Board to withdraw or modify its recommendation in accordance with the terms of the proposed merger agreement with GISI. In addition, the Company Board approved payment of certain transaction bonuses, which the Compensation Committee of the Company Board previously recommended be paid, to certain Hill employees who assisted with the proposed transaction.
On August 16, 2022, Hill, GISI and Merger Sub entered into the original merger agreement and that evening Hill and GISI each issued press releases announcing that they entered into the original merger agreement. The original merger agreement was filed with the SEC and became available publicly early in the morning of August 17, 2022.
On August 20, 2022, Mr. Sgro received a letter from representatives of Company C containing, among other things, an acquisition proposal with respect to the acquisition by Company C of all of the outstanding Company common stock for a price of $3.15 in cash per share of Company common stock, representing a premium of $0.30 per share (10.5%) relative to the merger consideration of $2.85 in cash per share of Company common stock in the original merger agreement. In addition, Company C’s August 20, 2022 proposal contemplated a termination fee of $5.7 million (3.0% of the equity value of Hill per the terms of Company C’s August 20, 2022 proposal) payable to Company C in the event the proposed merger agreement were to be terminated in certain circumstances. Company C’s August 20, 2022 proposal also contemplated that Company C’s parent company would provide a Company C parent guaranty and noted that Company C had access to significant unrestricted cash and undrawn credit lines providing it with sufficient liquidity to consummate the proposed merger with Company C under the terms of Company C’s August 20, 2022 proposal. Company C’s August 20, 2022 proposal indicated that Company C was prepared to commit to a “hell or high water” standard applicable to Hill, Company C, their respective subsidiaries, and certain specific affiliates of Company C. Concurrently with delivery of Company C’s August 20, 2022 proposal, Company C provided a revised draft merger agreement reflecting the terms of the proposal, a revised draft form of the voting agreement (which Company C proposed would be entered into by Mr. Ajdler and Engine Capital only) and a revised draft of Hill’s disclosure schedules to the proposed merger agreement. Company C’s revised draft merger agreement also contemplated that, (i) Company C would pay the $5.2 million termination fee payable to GISI under the original merger agreement if Company C and Hill were to enter into the proposed merger agreement and (ii) if the proposed merger agreement between Hill and Company C were subsequently terminated in connection with a subsequent superior proposal, then, in addition to the $5.7 million termination fee payable by Hill to Company C in connection with such termination, Hill would be obligated to reimburse Company C for the $5.2 million termination fee that Company C would have paid to GISI in connection with the termination of the original merger agreement.
In the morning of August 21, 2022, the Special Committee met virtually with representatives of Houlihan Lokey and representatives of Duane Morris to discuss the terms of Company C’s August 20, 2022 proposal. Following that discussion, the Special Committee concluded that a Company Board meeting was necessary and that the Special Committee would recommend that the full Company Board determine that Company C’s August 20, 2022 proposal could reasonably be expected to lead to a superior proposal under the terms of the original merger agreement, thus permitting the Company to discuss the terms of the proposal with Company C.
In the afternoon of August 21, 2022, in accordance with Hill’s obligations under the original merger agreement, representatives of Duane Morris, on behalf of Hill, notified representatives of GISI and representatives of Cooley that Hill had received Company C’s August 20, 2022 proposal and provided a copy of the same to GISI together with copies of Company C’s revised drafts of the proposed merger agreement, the form of voting agreement proposed by Company C to be entered into by Mr. Ajdler and Engine Capital, and proposed revisions to Hill’s disclosure schedules to the proposed merger agreement. From time to time thereafter, Mr. Sgro and Mr. Newman held discussions regarding the potential that GISI would submit a revised proposal for Hill’s consideration while negotiations were taking place with Company C.
 
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In the morning of August 22, 2022, the Company Board, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to discuss the terms of Company C’s August 20, 2022 proposal and the terms of the original merger agreement, particularly with respect to the merger consideration and antitrust and regulatory approval matters thereunder. After that discussion, the Company Board determined, after consultation with its financial advisors and outside legal counsel, that Company C’s August 20, 2022 proposal could reasonably be expected to lead to a superior proposal by Company C and that the failure to take the actions set forth in Section 6.2 of the original merger agreement with respect to such proposal would be inconsistent with the Company Board’s fiduciary duties under applicable law. Later in the morning of August 22, 2022, following the Company Board meeting, Duane Morris, on behalf of Hill, notified representatives of GISI and representatives of Cooley that the Company Board had made the foregoing determination.
In the afternoon of August 22, 2022, in light of anticipated timing with respect to antitrust approvals in certain international jurisdictions, representatives of Duane Morris and representatives of Cooley held a previously-scheduled video conference to discuss a potential change in the structure of the proposed transaction with GISI to a single-step merger in which Hill stockholder approval would be required, as contemplated in a covenant in the original merger agreement.
In the evening of August 22, 2022, Company C and Hill entered into an agreement amending the terms of the May 27, 2022 confidentiality agreement in order to satisfy the definition of “acceptable confidentiality agreement” under the terms of the original merger agreement.
On August 23, 2022, representatives of Duane Morris delivered a revised draft merger agreement to representatives of Company C’s outside legal counsel. The revised draft merger agreement sought, among other things, a commitment on the part of Company C to a “hell or high water” standard applicable to all affiliates of Company C (as opposed to only Company C’s subsidiaries and certain specified affiliates of Company C). The revised draft merger agreement also revised CFIUS- and DCSA-related provisions in order to provide that Hill would be entitled to take certain actions, with Company C’s prior approval, to obviate the need for CFIUS and DCSA approvals. The revised draft merger agreement also included changes to align the terms thereof more closely with the terms of the original merger agreement where appropriate, including with respect to provisions relating to payment of fiscal 2022 employee performance bonuses. In addition, the revised draft merger agreement included modifications to the Company C parent guaranty and broadened the scope of representations given by the Company C parent guarantor in the revised draft merger agreement.
On August 24, 2022, representatives of Company C’s outside legal counsel delivered a revised draft merger agreement to representatives of Duane Morris. Company C’s revised draft merger agreement essentially reverted all of the revisions to the antitrust provisions contained in Hill’s August 23, 2022 revised draft merger agreement, but accepted, in concept, Hill’s revisions with respect to CFIUS and DCSA approval matters. Company C’s revised draft merger agreement included changes to provisions relating to payment of fiscal 2022 employee performance bonuses that were more favorable to Hill’s employees than contained in Company C’s August 20, 2022 draft merger agreement. In addition, Company C’s revised draft merger agreement included modifications to the Company C parent guaranty and the representations given by the Company C parent guarantor in the revised draft merger agreement.
In the evening of August 24, 2022, representatives of Duane Morris and representatives of Company C’s outside legal counsel met virtually to discuss Company C’s August 24, 2022 revised draft merger agreement.
In the morning of August 25, 2022, Mr. Newman delivered a letter to Mr. Sgro, on behalf of Hill, proposing to (i) acquire the outstanding shares of Company common stock at a revised price of $3.40 in cash per share of Company common stock which represented a 19.3% premium to price in the original merger agreement and a 33.3% premium to the price offered by Company C, (ii) convert the structure of the transaction from a two-step tender offer structure to a one-step stockholder-approved merger as had been previously contemplated by the original merger agreement, (iii) increase the Hill termination fee to 4.0% of the equity value of the transaction but delete the expense reimbursement provision in favor of GISI, and (iv) at Hill’s election, make available to Hill a credit facility of up to $70.0 million to be funded after receipt of Company stockholder approval of the transaction. Later that day, representatives of Cooley delivered to representatives of Duane Morris an initial draft amended and restated merger agreement
 
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reflecting the foregoing and a draft support agreement to be entered into by Mr. Ajdler and Engine Capital in connection with signing of the proposed amended and restated merger agreement with GISI. Negotiations regarding the draft support agreement to be entered into by Mr. Ajdler and Engine Capital with GISI continued throughout the day on August 25, 2022 and August 26, 2022.
Later in the morning of August 25, 2022, the Company Board, members of Hill executive management and representatives of Duane Morris met virtually to discuss the terms of GISI’s August 25, 2022 proposal and the status of negotiations with Company C regarding Company C’s August 24, 2022 revised draft merger agreement.
In the evening of August 25, 2022, in accordance with Hill’s obligations under the original merger agreement, representatives of Duane Morris, on behalf of Hill, provided representatives of GISI and representatives of Cooley with copies of Company C’s August 24, 2022 revised draft merger agreement. Additionally, representatives of Duane Morris, on behalf of Mr. Ajdler and Engine Capital, and representatives of Company C’s outside legal counsel exchanged revised drafts of the voting agreement between Company C, on the one hand, and Mr. Ajdler and Engine Capital, on the other, on August 25, 2022.
In the morning of August 26, 2022, the Company Board, members of Hill executive management and representatives of Duane Morris met virtually to further discuss the terms of GISI’s August 25, 2022 proposal, GISI’s August 25, 2022 draft amended and restated merger agreement, the status of negotiations with Company C with respect to Company C’s August 24, 2022 revised draft merger agreement, and the course of action to be taken during the day with respect to GISI and Company C.
Later in the morning of August 26, 2022, representatives of Duane Morris delivered a revised draft amended and restated merger agreement to representatives of Cooley reflecting minor revisions to GISI’s August 25, 2022 draft amended and restated merger agreement and a revised draft support agreement reflecting changes requested by Mr. Ajdler and Engine Capital. Representatives of Houlihan Lokey delivered a revised engagement letter that included the additional fees for the additional fairness opinion to be delivered in connection with a proposed transaction.
In the afternoon of August 26, 2022, representatives of Duane Morris delivered to representatives of Company C’s outside legal counsel a revised draft merger agreement which accepted many of Company C’s proposals in its prior draft but seeking again, among other things, stronger commitment from Company C with respect to antitrust matters.
At 6:00 p.m., Eastern Time, on August 26, 2022, the Company Board, members of Hill executive management, representatives of Houlihan Lokey and representatives of Duane Morris met virtually to review the proposed transaction with GISI and the proposed transaction with Company C. Mr. Sgro provided the Company Board with an update on the status of negotiations with GISI and Company C. Thereafter, representatives of Duane Morris briefly reviewed the Company Board’s fiduciary duties in connection with its consideration of the proposed transactions and briefly reviewed with the Company Board the terms of the updated terms of the GISI transaction and the material differences between the proposed amended and restated merger agreement with GISI and the proposed merger agreement with Company C delivered earlier that morning. Representatives of Houlihan Lokey reviewed its financial analysis of GISI’s revised proposed offer price of $3.40 in cash per share of Company common stock, and rendered to the Company Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated August 26, 2022, that, as of such date the merger consideration to be received by holders of Company common stock (other than Excluded Persons) pursuant to the merger agreement was fair, from a financial point of view, to such holders. For a detailed discussion of Houlihan Lokey’s opinion, please see the sections of this proxy statement below entitled “— Opinion of Houlihan Lokey.” The written opinion delivered by Houlihan Lokey and dated as of August 26, 2022 is attached to this Proxy Statement as Annex B. Following additional discussion and consideration of the proposed amended and restated merger agreement with GISI and the merger and the other transactions contemplated by the proposed amended and restated merger agreement with GISI, the Company Board unanimously (i) determined that the proposed amended and restated merger agreement with GISI and the transactions contemplated thereby, including merger, are advisable and fair to, and in the best interest of, Hill and its stockholders, (ii) approved the execution, delivery and performance by Hill of the proposed amended and restated merger agreement with GISI and the consummation of the transactions contemplated thereby, including the proposed merger, and (iii) recommended that Hill’s
 
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stockholders approve the adoption of the proposed amended and restated merger agreement with GISI, subject to the right of the Company Board to withdraw or modify its recommendation in accordance with the terms of the proposed amended and restated merger agreement.
Late in the evening of August 26, 2022, Hill, GISI and Merger Sub entered into the merger agreement. In the early hours of August 27, 2022, Hill and GISI issued a joint press release announcing that they had entered into the merger agreement. The merger agreement was filed with the SEC and became available publicly early in the morning of August 29, 2022.
Recommendation of the Company Board and Reasons for the Merger
The Company Board, at a meeting held on August 26, 2022, unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein, and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement. Later that evening, the Company executed the merger agreement, and early on the morning of August 27, 2022, the Company and Parent issued a joint press release announcing the execution of the merger agreement.
In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Company Board consulted with the Company’s senior management team, as well as the Company’s outside legal and financial advisors, and considered a number of factors, including the following material factors (not necessarily listed in order of relative importance):

that the all-cash per share merger consideration will provide our stockholders with immediate fair value, in cash, for their shares of Company common stock, while avoiding the long-term business risk of retaining their shares of Company common stock, and while also providing such stockholders with certainty of value for their shares of Company common stock;

that the per share merger consideration represents a premium of approximately 92.1% to the closing share price of Company common stock on August 15, 2022, the last trading day prior to the Company’s press release announcing a potential transaction between the parties, and approximately 21.4% to the closing share price of Company common stock on August 26, 2022, the last trading day prior to the parties’ joint press release announcing the revised terms of a potential transaction between the parties;

the Company Board’s understanding of the business, operations, financial condition, earnings and prospects of the Company, including the prospects of the Company as an independent publicly traded entity and its standalone operating plan;

the financial analysis reviewed by Houlihan Lokey with the Company Board as well as the oral opinion of Houlihan Lokey rendered to the Company Board on August 26, 2022 (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Company Board dated August 26, 2022), as to the fairness, from a financial point of view and as of such date, of the merger consideration to be received by holders of Company common stock (other than Excluded Persons) in the merger pursuant to the merger agreement. See “The Merger — Opinion of the Financial Advisor to the Company”;

the Company Board’s view that the merger consideration to be paid by Parent was the result of an arm’s-length negotiation and belief that the merger consideration of $3.40 per share represented Parent’s best and final offer after Parent increased the merger consideration from $2.85 per share to $3.40 per share following the Company’s reciept of an acquisition proposal from a third party;

the benefits that the Company was able to obtain through its negotiations with Parent, including an increase in Parent’s offer price per share from Parent’s August 2, 2022 unsolicited offer to the end of the
 
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negotiations. The Company Board believed that the consideration reflected in the merger agreement was the best transaction that could reasonably be obtained by Company stockholders from Parent at the time;

the timing of the merger and the risk that if the Company does not accept Parent’s offer now, it may not have another opportunity to do so or to pursue an opportunity offering at least as much value to the Company’s stockholders;

the Company Board’s belief that sale of all of the Company’s business in a single transaction is more likely to be consummated than separate sales of its domestic and international businesses, which the Board believed would be infeasible;

the upcoming maturity of the Company’s credit facilities with Société Générale and, given the current environment for financing international businesses such as the Company’s, the uncertainties surrounding the Company’s ability to find alternative debt financing on terms that are in the best interests of the Company’s stockholders and which could reduce the Company’s ability to provide credit enhancements on terms required by a client and may result in the Company’s inability to compete or win a project;

the likelihood that the merger would be completed based on, among other things (not necessarily listed in order of relative importance):

the reputation of Parent;

Parent’s ability to complete large acquisition transactions and its familiarity with the Company;

that there is no financing or due diligence condition to the completion of the merger in the merger agreement;

that the conditions to the closing of the merger are specific and limited in scope and which, (1) in the case of the condition related to the accuracy of the Company’s representations and warranties, are generally subject to a “material adverse effect” qualification, and (2) in the case of the condition related to government approvals, require Parent to complete and implement any divestments and behavioral conditions that may be required by applicable government antitrust authorities;

the Company’s ability, under certain circumstances pursuant to the merger agreement, to seek specific performance to redress breaches of the merger agreement by Parent and Merger Sub and to enforce specifically the terms of the merger agreement;

the Company’s ability, prior to the time our stockholders adopt the merger agreement, to consider and respond to a written unsolicited bona fide acquisition proposal and provide information to and engage in discussions or negotiations with, the person making such a proposal if the Company Board, prior to taking any such actions, determines in good faith, after consultation with its outside legal counsel, that failure to take such actions would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law, and, after consultation with its outside legal counsel and financial advisors, that such acquisition proposal either constitutes a superior proposal or is reasonably expected to lead to a superior proposal (subject to the Company’s obligation to give Parent notice of such discussions);

the Company’s ability, under certain circumstances, to terminate the merger agreement in order to enter into a definitive agreement with respect to a superior proposal that did not result from a material breach of the non-solicitation restrictions, and that the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors is a superior proposal, so long as the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law and (i) the Company has complied with its obligations to provide timely written notice to Parent of our intention to terminate the merger agreement, (ii) prior to terminating the merger agreement, the Company negotiates with Parent in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the merger agreement such that the acquisition proposal would no longer
 
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constitute a superior proposal, (iii) the Company Board considers in good faith any changes to the merger agreement proposed by Parent and determines that the superior proposal would still constitute a superior proposal and (iv) immediately prior to or substantially concurrently with the termination of the merger agreement, the Company pays Parent a termination fee of $8.4 million, each of which the Company Board concluded was reasonable in the context of termination fees in comparable transactions and in light of the overall terms of the merger agreement, including the per share merger consideration;

the Company’s ability, under the merger agreement, to withdraw, change, amend, modify or qualify the Company Board’s recommendation in certain circumstances;

the fact that the merger does not require the approval of Parent’s stockholders, with the attendant risks associated with such a vote;

the Company Board’s view that the terms of the merger agreement would be unlikely to deter third parties from making an unsolicited superior proposal; and

the availability of appraisal rights under the DGCL to a holder of Company common stock that complies with all of the required procedures under the DGCL, which allows such holder to seek appraisal of the fair value of its shares of Company common stock as determined by the Delaware Court of Chancery.
The Company Board also considered a variety of potentially negative factors in its deliberations concerning the merger agreement and the merger, including the following (not necessarily listed in any relative order of importance):

the merger would preclude our stockholders from having the opportunity to participate in the future performance of our assets, earnings growth and appreciation of the value of Company common stock;

the significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to complete the merger and related disruptions to the operation of our business;

the restrictions on the conduct of our business prior to the completion of the merger, which, subject to specific exceptions, could delay or prevent us from undertaking business opportunities that may arise or any other action the Company would otherwise take with respect to our operations absent the pending completion of the merger;

that the announcement and pendency of the merger, or failure to complete the merger, may cause substantial harm to relationships with our employees, vendors and customers and may divert management and employee attention away from the day-to-day operation of our business and may result in stockholder litigation;

the possibility that the $8.4 million termination fee payable by the Company upon the termination of the merger agreement under certain circumstances could discourage other potential acquirers from making a competing acquisition proposal to acquire the Company;

the risk that Parent’s matching rights might discourage third parties from submitting a competing acquisition proposal;

that, while we expect that the merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the merger will be satisfied, including the receipt of necessary regulatory approvals, and, as a result, the merger may not be consummated;

that an all-cash transaction would be a taxable transaction for U.S. federal income tax purposes; and

that our directors and executive officers have interests in the merger that may be different from, or in addition to, those of our stockholders. See “— Interests of the Company’s Directors and Executive Officers in the Merger.”
The Company Board concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the merger were outweighed by the potential benefits of the merger.
 
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The foregoing discussion of the information and factors considered by the Company Board is not intended to be exhaustive, but includes the material factors considered. In view of the variety of factors considered in connection with its evaluation of the merger, the Company Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Company Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Company Board based its recommendation on the totality of the information presented.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT PROPOSAL, “FOR” THE APPROVAL OF THE NON-BINDING NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL AND “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
In considering the recommendation of the Company Board with respect to the merger agreement proposal, you should be aware that our directors and executive officers have interests in the merger that may be different from, or in addition to, yours. The Company Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement proposal be approved by the stockholders of the Company. See the section entitled “— Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 48.
Opinion of the Financial Advisor to the Company
Opinion of Houlihan Lokey
On August 26, 2022, Houlihan Lokey verbally rendered its opinion to the Company Board (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Company Board dated August 26, 2022), as to the fairness, from a financial point of view and as of such date, of the merger consideration to be received by holders of Company common stock (other than Excluded Persons) in the merger pursuant to the merger agreement.
Houlihan Lokey’s opinion was directed to the Company Board (in its capacity as such) and only addressed the fairness, from a financial point of view and as of such date, of the merger consideration to be received by holders of Company common stock (other than Excluded Persons) in the merger pursuant to the merger agreement and did not address any other aspect or implication of the merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex B to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice or a recommendation to the Company Board, any security holder of the Company or any other person as to how to act or vote with respect to any matter relating to the merger.
In arriving at its opinion, Houlihan Lokey, among other things:

reviewed the merger agreement and the support agreement;

reviewed certain publicly available business and financial information relating to the Company that Houlihan Lokey deemed to be relevant;

reviewed certain information relating to the historical, current and future operations, financial condition and prospects of the Company made available to Houlihan Lokey by the Company, including financial projections prepared by the management of the Company relating to (i) the Company for the fiscal years ending 2022 through 2024 and (ii) the collection by the Company of certain amounts due from a client in Libya (such financial projections described in (i) and (ii) herein, collectively, the “Financial Projections”);
 
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spoke with certain members of the management of the Company regarding the business, operations, financial condition and prospects of the Company, the merger and related matters;

compared the financial and operating performance of the Company with that of other public companies that Houlihan Lokey deemed to be relevant;

considered publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant;

reviewed the current and historical market prices and trading volume for the Company’s publicly traded securities, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant; and

conducted such other financial studies, analyses and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate.
Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and does not assume any responsibility with respect to such data, material and other information. In addition, management of the Company advised Houlihan Lokey, and Houlihan Lokey assumed, that the Financial Projections reviewed by Houlihan Lokey had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of the Company and the other matters covered thereby, and Houlihan Lokey expresses no opinion with respect to such Financial Projections or the assumptions on which they are based. Houlihan Lokey relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to Houlihan Lokey’s analyses or opinion, and that there is no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading.
Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the merger agreement and the support agreement and all other related documents and instruments that are referred to therein are true and correct, (b) each party to all such agreements and other related documents and instruments will fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the merger will be satisfied without waiver thereof, and (d) the merger will be consummated in a timely manner in accordance with the terms described in all such agreements and other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey relied upon and assumed, without independent verification, that (i) the merger will be consummated in a manner that complies in all respects with all applicable federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the merger or the Company that would be material to Houlihan Lokey’s analyses or opinion. In addition, Houlihan Lokey relied upon and assumed, without independent verification, that the final forms of any draft documents identified above will not differ in any material respect from the drafts of said documents.
Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of the Company or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake an independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the Company is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject.
 
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Houlihan Lokey considered the results of the third-party solicitation process conducted by the Company, with Houlihan Lokey’s assistance, with respect to a possible sale of the Company. Houlihan Lokey’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of its opinion. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to its attention after the date of its opinion.
Houlihan Lokey’s opinion is furnished for the use of the Company Board (in its capacity as such) in connection with its evaluation of the merger and may not be used for any other purpose without Houlihan Lokey’s prior written consent. The opinion is not intended to be, and does not constitute, a recommendation to the Company Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the merger or otherwise.
Houlihan Lokey was not requested to opine as to, and its opinion does not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the Company Board, the Company, its security holders or any other party to proceed with or effect the merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the merger or otherwise (other than the merger consideration to the extent expressly specified in Houlihan Lokey’s opinion) including, without limitation, any terms, aspects or implications of the support agreement to be entered into in connection with the merger, (iii) the fairness of any portion or aspect of the merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey’s opinion, (iv) the relative merits of the merger as compared to any alternative business strategies or transactions that might be available for the Company or any other party, (v) the fairness of any portion or aspect of the merger to any one class or group of the Company’s or any other party’s security holders or other constituents vis-à-vis any other class or group of the Company’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the merger, (vii) the solvency, creditworthiness or fair value of the Company or any other participant in the merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the merger, any class of such persons or any other party, relative to the merger consideration or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the Company, on the assessments by the Company and its advisors, as to all legal, regulatory, accounting, insurance, tax and other similar matters with respect to the Company and the merger or otherwise. The issuance of Houlihan Lokey’s opinion was approved by a committee authorized to approve opinions of this nature.
In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in Houlihan Lokey’s analyses for comparative purposes is identical to the Company or the merger and an evaluation of the results of those analyses is not entirely mathematical. As a consequence, mathematical derivations of financial data are not by themselves meaningful and in selecting the ranges of multiples to be applied were considered in conjunction with experience and the exercise of judgment. The estimates contained in the Financial Projections prepared by the management of the Company and the implied reference range values indicated by Houlihan Lokey’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the Company. Much of the information used in, and accordingly the results of, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.
 
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Houlihan Lokey’s opinion was only one of many factors considered by the Company Board in evaluating the merger. See “The Merger — Recommendation of the Company Board and Reasons for the Merger” beginning on page 36 of this proxy statement. Neither Houlihan Lokey’s opinion nor its analyses were determinative of the merger consideration or of the views of the Company Board or management with respect to the merger or the merger consideration. The type and amount of consideration payable in the merger were determined through negotiation between the Company and Parent, and the decision to enter into the merger agreement was solely that of the Company Board.
Financial Analyses
In preparing its opinion to the Company Board, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey’s analyses is not a complete description of the analyses underlying Houlihan Lokey’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey’s opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey’s overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey’s analyses and opinion.
The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with the Company Board on August 26, 2022. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey’s analyses.
For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

Enterprise Value — generally, the value as of a specified date of the relevant company’s equity market value plus debt outstanding, preferred stock and minority interests and less cash and cash equivalents, based on reported fully-diluted shares; and

Adjusted EBITDA — generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization, as adjusted for certain non-recurring items, for a specified time period.
Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of our common stock and the common stock of the selected companies listed below as of August 24, 2022, and transaction values for the selected transactions analysis described below were calculated on an enterprise value basis based on the value of the proposed consideration in the selected transactions. The estimates of the future financial performance of the Company relied upon for the financial analyses described below were based on the Financial Projections. The estimates of the future financial performance of the selected companies listed below were based on certain publicly available research analyst estimates for those companies.
Selected Companies Analysis.   Houlihan Lokey reviewed certain data for selected companies, with publicly traded equity securities, that Houlihan Lokey deemed relevant.
 
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The financial data reviewed included:

Enterprise value as a multiple of latest 12 months Adjusted EBITDA (which period refers to the latest 12 months period for which such financial information was publicly disclosed);

Enterprise value as a multiple of estimated calendar year 2022 Adjusted EBITDA; and

Enterprise value as a multiple of estimated calendar year 2023 Adjusted EBITDA.
The selected companies included the following:

AECOM

Bureau Veritas SA

Fluor Corporation

Jacobs Engineering Group Inc.

KBR, Inc.

NV5 Global, Inc.

RPS Group plc1

SNC-Lavalin Group Inc.

Stantec Inc.

Worley Limited

WSP Global Inc.

Granite Construction Incorporated

MasTec, Inc.

Matrix Service Company

Primoris Services Corporation

Quanta Services, Inc.

Skanska AB

Sterling Infrastructure, Inc.

Tutor Perini Corporation
Taking into account the results of the selected companies analysis, Houlihan Lokey applied selected multiple ranges of 6.5x to 8.0x latest 12 months Adjusted EBITDA, 6.0x to 7.5x calendar year 2022 estimated Adjusted EBITDA and 5.0x to 6.5x calendar year 2023 estimated Adjusted EBITDA to corresponding financial data for the Company. The selected companies analysis indicated implied per share value reference ranges (after taking into account cash, debt and the estimated present value of receivables from a client in Libya) of $1.68 to $2.24 per share of Company common stock based on the selected range of multiples of latest 12 months Adjusted EBITDA, $1.73 to $2.34 per share of Company common stock based on the selected range of multiples of calendar year 2022 estimated Adjusted EBITDA and $1.89 to $2.65 per share of Company common stock based on the selected range of multiples of calendar year 2023 estimated Adjusted EBITDA, as compared to the proposed merger consideration of $3.40 per share of Company common stock.
Selected Transactions Analysis.   Houlihan Lokey considered certain financial terms of certain transactions involving target companies that Houlihan Lokey deemed relevant.
1
For illustrative purposes only.
 
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The financial data reviewed included:

Transaction value as a multiple of latest 12 months Adjusted EBITDA (which period refers to the latest 12 months period prior to the subject transaction for which relevant target financial information was publicly disclosed).
The selected transactions included the following:
Date Announced
Target
Acquiror
8/8/2022 RPS Group plc WSP Global Inc.
7/25/2022 Infrastructure and Energy Alternatives, Inc. MasTec, Inc.
6/27/2022 PLH Group, Inc. Primoris Services Corporation
12/20/2021 Henkels & McCoy Group, Inc. MasTec, Inc.
11/7/2019 Quantum Spatial, Inc. NV5 Global, Inc.
9/3/2019 APi Group Inc. J2 Acquisition Limited
10/21/2018
Energy, Chemicals and Resources Business of Jacobs Engineering
WorleyParsons Ltd.
7/30/2018 Berger Group Holdings, Inc. WSP Global Inc.
3/28/2018 Willbros Group, Inc. Primoris Services Corporation
2/14/2018 Layne Christensen Company
Granite Construction Incorporated
12/18/2017 Chicago Bridge & Iron Company McDermott International, Inc.
8/2/2017 CH2M HILL Companies, Ltd. Jacobs Engineering Group Inc.
4/3/2017 WS Atkins plc (nka:WS Atkins Limited) SNC-Lavalin Group Inc.
3/31/2017 TRC Companies, Inc. New Mountain Capital, LLC;
New Mountain Partners IV, L.P.
3/13/2017 Amec Foster Wheeler plc John Wood Group PLC
2/28/2017 Capital Services division of CB&I Veritas Capital
5/23/2016 Wyle Inc. KBR Holdings, LLC
3/29/2016 MWH Global, Inc. Stantec Inc.
Taking into account the results of the selected transactions analysis, Houlihan Lokey applied selected multiple ranges of 7.5x to 9.0x latest 12 months Adjusted EBITDA, to corresponding financial data for the Company. The selected transactions analysis indicated implied per share value reference ranges (after taking into account cash, debt and the estimated present value of receivables from a client in Libya) of $2.01 to $2.57 per share of Company common stock based on the selected range of multiples of latest 12 months Adjusted EBITDA, as compared to the proposed merger consideration of $3.40 per share of Company common stock.
Discounted Cash Flow Analysis.   Houlihan Lokey performed a discounted cash flow analysis of the Company by calculating the estimated net present value of the projected unlevered, after-tax free cash flows of the Company based on the Financial Projections. Houlihan Lokey calculated terminal values for the Company by applying a range of perpetuity growth rates of 0.0% to 2.0% to the Company’s projected fiscal year ended December 31, 2024 unlevered, after-tax free cash flows (as adjusted to normalize depreciation & amortization expense, as well as changes in net working capital). The net present values of the Company’s projected future cash flows and terminal values were then calculated using discount rates ranging from 15.0% to 17.0%. The discounted cash flow analysis indicated an implied per share value reference range (after taking into account cash, debt and the estimated present value of receivables from a client in Libya) of $1.90 to $2.72 per share of Company common stock, as compared to the proposed merger consideration of $3.40 per share of Company common stock.
Miscellaneous
Houlihan Lokey was engaged by the Company to act as its financial advisor in connection with the merger and provide financial advisory services, including an opinion to the Company Board as to the
 
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fairness, from a financial point of view and as of such date, of the merger consideration to be received by holders of Company common stock (other than Excluded Persons) in the merger pursuant to the merger agreement. Houlihan Lokey also participated in certain of the negotiations leading to the merger. We engaged Houlihan Lokey based on Houlihan Lokey’s experience and reputation. Houlihan Lokey is regularly engaged to provide financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Pursuant to its engagement by the Company, Houlihan Lokey is entitled to an aggregate fee of $3.275 million for its services, a substantial portion of which is contingent upon consummation of the merger, and a portion of which became payable upon the delivery of Houlihan Lokey’s opinion. The Company has also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses, including certain liabilities under the federal securities laws, arising out of or related to Houlihan Lokey’s engagement.
In the ordinary course of business, certain of Houlihan Lokey’s employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company, Parent, Merger Sub or any other party that may be involved in the merger and their respective affiliates or security holders or any currency or commodity that may be involved in the merger.
Houlihan Lokey and certain of its affiliates have in the past provided and are currently providing investment banking, financial advisory and/or other financial or consulting services to the Acquiror, for which Houlihan Lokey and its affiliates have received, and may receive, compensation in connection with such services. Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and/or other financial or consulting services to the Company, the Acquiror, other participants in the merger or certain of their respective affiliates or security holders in the future, for which Houlihan Lokey and its affiliates may receive compensation. Furthermore, in connection with bankruptcies, restructurings, distressed situations and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, the Company, the Acquiror, other participants in the merger or certain of their respective affiliates or security holders, for which advice and services Houlihan Lokey and its affiliates have received and may receive compensation.
Unaudited Prospective Financial Information of the Company
The Company does not as a matter of course make public projections as to future performance, revenues, earnings or other financial results given, among other reasons, the uncertainty of realizing the underlying assumptions and estimates. However, the Company prepared certain unaudited prospective financial information further described below, which we refer to as the Financial Forecasts, that was provided to Houlihan Lokey for purposes of its financial analysis and opinions described in the section of this proxy statement captioned “The Merger — Opinion of the Financial Advisor of the Company.
The Financial Forecasts were not prepared for purposes of public disclosure, nor were they prepared on a basis designed to comply with GAAP published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of projections. However, in the view of the Company’s management, the Financial Forecasts were prepared on a reasonable basis, and reflected the best estimates and judgments available at the time the Financial Forecasts were prepared, and present, to the best of the Company’s management knowledge and belief, the expected course of action and the expected future financial performance of the Company. Neither the Company’s independent registered public accounting firm nor any other independent accountants, compiled, examined or performed any procedures with respect to the Financial Forecasts summarized below, and has not expressed any opinion or any other form of assurance on this information or its achievability, and assumes no responsibility for, and disclaims any association with, the Financial Forecasts. The reports of the independent registered public accounting firm incorporated by reference in this proxy statement relate to historical financial statements. They do not extend to any financial projections and should not be seen to do so.
 
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Although presented with numerical specificity, the Financial Forecasts were prepared in accordance with variables, estimates, and assumptions that are inherently uncertain and may be beyond the control of the Company, and which may prove not to have been, or to no longer be, accurate. While in the view of the Company’s management the Financial Forecasts were prepared on a reasonable basis, the Financial Forecasts are subject to many risks and uncertainties. Important factors that may affect actual results and cause actual results to differ materially from the Financial Forecasts include risks and uncertainties relating to the Company’s business, industry performance, general business and economic conditions, market and financial conditions, various risks set forth in the Company’s reports filed with the SEC, and other factors described or referenced in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” of this proxy statement.
The Financial Forecasts also reflect assumptions that are subject to change and are susceptible to multiple interpretations and to conditions, transactions or events that may occur and were not anticipated at the time the Financial Forecasts were prepared. In addition, the Financial Forecasts do not take into account any circumstances, transactions or events occurring after the date the Financial Forecasts were prepared. Accordingly, actual results will likely differ, and may differ materially, from those contained in the Financial Forecasts. We do not assure you that the financial results in the Financial Forecasts set forth below will be realized or that future financial results of the Company will not materially vary from those in the Financial Forecasts.
None of the Company, or its affiliates, officers, directors, or other representatives gives any stockholder, or any other person, any assurance that actual results will not differ materially from the Financial Forecasts, and, except as otherwise required by law, none of them undertakes any obligation to update or otherwise revise or reconcile the Financial Forecasts to reflect circumstances after the date the Financial Forecasts were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions and estimates underlying the Financial Forecasts are shown to be in error.
No one has made or makes any representation to any stockholder, or anyone else regarding, nor assumes any responsibility for the validity, reasonableness, accuracy, or completeness of, the Financial Forecasts set forth below. You are cautioned not to rely on the Financial Forecasts. The inclusion of this information should not be regarded as an indication that the Company Board, any of its advisors or any other person considered, or now considers, it to be material or to be a reliable prediction of actual future results.
The Financial Forecasts included below cover multiple years, and this information by its nature becomes subject to greater uncertainty with each successive year. The Financial Forecasts should be evaluated, if at all, in conjunction with the historical financial statements and other information contained in the Company’s public filings with the SEC.
Due to the forward-looking nature of the Financial Forecasts, specific quantifications of the amounts that would be required to reconcile any non-GAAP measures presented to GAAP measures are not available. The Company believes that there is a degree of volatility with respect to certain GAAP measures, and certain adjustments made to arrive at the relevant non-GAAP measures, which preclude the Company from providing accurate forecasted non-GAAP to GAAP reconciliations.
 
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The following table sets forth the estimated amounts of the Net Income, EBITDA and Adjusted EBITDA for the Company for the fiscal year ending December 31, 2022 (amounts may reflect rounding):
2022E
Net Income
7,246
EBITDA 21,742
Adjusted EBITDA
24,000
The following table sets forth the estimated amounts of the Operating Profit, EBITDA and the Adjusted EBITDA, by region and on a consolidated basis, for the Company for the 2023 and 2024 fiscal years (amounts may reflect rounding):
2023E (millions)
Africa
APAC
Europe
Middle East
Americas
Corp
Hill Intl
Operating Profit
11.0 3.2 13.0 11.5 44.0 82.8
EBITDA
10.4 2.8 8.8 8.4 34.5 (36.4) 28.5
Adjusted EBITDA
10.4 2.8 8.9 8.6 34.7 (35.1) 30.4
2024E (millions)
Africa
APAC
Europe
Middle East
Americas
Corp
Hill Intl
Operating Profit
12.7 3.5 16.3 14.2 50.6 97.3
EBITDA
12.1 3.1 11.9 10.9 40.6 (38.1) 40.5
Adjusted EBITDA
12.1 3.1 12.0 11.1 40.8 (36.7) 42.5
Certain Effects of the Merger
If the merger agreement proposal receives the required approval of the stockholders described elsewhere in this proxy statement and the other conditions to the closing of the merger are either satisfied or waived and the merger agreement is not otherwise terminated in accordance with its terms, Merger Sub will be merged with and into the Company upon the terms set forth in the merger agreement. As the surviving company in the merger, the Company will continue to exist following the merger as a wholly owned subsidiary of Parent.
The Amended and Restated Certificate of Incorporation of Merger Sub (the “Company Charter”) will be the certificate of incorporation of the Company. The bylaws of the company (the “Company Bylaws”) will be amended as a result of the merger to be substantially the same as those of Merger Sub immediately prior to the effective time of the merger (except that the name of Merger Sub in the bylaws will be changed to that of the Company.
Following the merger, all of the common stock of the Company will be owned, beneficially and as of record, by Parent, and none of the current holders of the Company common stock will, by virtue of the merger, have any direct ownership interest in, or be a stockholder of, the Company, the surviving company or Parent. As a result, the holders any decrease in the value, of the Company common stock. Following the merger, Parent will benefit from any increase in the Company’s value and also will bear the risk of any decrease in the Company’s value.
Upon consummation of the merger, each share of Company common stock issued and outstanding immediately prior to the effective time of the merger (other than cancelled shares, dissenting shares and converted shares (each as defined in “The Merger Agreement — Consideration to be Received in the Merger”)) will be converted into the right to receive the merger consideration and all shares of Company common stock so converted will, at the effective time, be canceled. Please see the section of this proxy statement entitled “The Merger Agreement — Consideration to be Received in the Merger.”
For information regarding the effects of the merger on the Company’s outstanding equity awards, please see the sections entitled “The Merger Agreement — Treatment of Company Compensatory Awards” and “Interests of the Company’s Directors and Executive Officers in the Merger.”
The Company common stock is currently registered under the Exchange Act and trades on the NYSE under the symbol “HIL.” Following the consummation of the merger, shares of Company common stock
 
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will no longer be traded on the NYSE or any other public market. In addition, the registration of the Company common stock under the Exchange Act will be terminated, and the Company will no longer be required to file periodic and other reports with the SEC with respect to the Company common stock or otherwise. Following termination of registration of the Company common stock under the Exchange Act, the Company will no longer be required to furnish certain information to the Company’s stockholders and the SEC, and the provisions of the Exchange Act, such as the requirement to file annual and quarterly reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with stockholders’ meetings pursuant to Section 14(a) of the Exchange Act, will become inapplicable to the Company. Parent will become the beneficiary of the cost savings associated with the Company’s no longer being subject to the reporting requirements under the federal securities laws.
Effects on the Company if the Merger is not Consummated
In the event that the merger agreement proposal does not receive the required approval of the stockholders described elsewhere in this proxy statement, or if the merger is not completed for any other reason, the Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company expects that its management will operate the Company’s business in a manner similar to that in which it is being operated today and the Company will remain an independent public company, the Company common stock will continue to be listed and traded on the NYSE, the Company common stock will continue to be registered under the Exchange Act and the Company’s stockholders will continue to own their shares of the Company common stock and will continue to be subject to the same general risks and opportunities as they currently are with respect to ownership of the Company common stock.
If the merger is not completed, there can be no assurances as to the effect of these risks and opportunities on the future value of your shares of Company common stock, including the risk that the market price of the Company common stock may decline to the extent that the current market price of the Company common stock reflects a market assumption that the merger will be completed. If the merger is not completed, there can be no assurances that any other transaction acceptable to the Company will be offered or that the business, operations, financial condition, earnings or prospects of the Company will not be adversely impacted or that stockholders will ever receive a control premium for their shares. Pursuant to the merger agreement, under certain circumstances the Company is permitted to terminate the merger agreement in order to enter into an alternative transaction. Please see the section of this proxy statement entitled “The Merger Agreement — Termination of the Merger Agreement.”
Under certain circumstances, if the merger is not completed, the Company may be obligated to pay to Parent a termination fee. Please see the section of this proxy statement entitled “The Merger Agreement — Termination Fee Payable by the Company.”
Interests of the Company’s Directors and Executive Officers in the Merger
The Company’s directors and executive officers have interests in the merger that are in addition to, or different from, the interests of other stockholders. The Company Board was aware of these interests and considered them, among other matters, in evaluating and approving the merger agreement and the merger, and in recommending the approval of the merger agreement proposal, the non-binding named executive officer compensation proposal, and the adjournment proposal to the Company’s stockholders. These interests are described in further detail below.
Certain of the Company’s directors and executive officers hold Company Compensatory Awards. For details on these holdings for each of the Company’s named executive officers, see the “Named Executive Officer Merger-Related Compensation” table below.
Treatment of Company Compensatory Awards
In connection with the completion of the merger and subject to the terms of the merger agreement, each outstanding and unvested Company Compensatory Award will become vested and be settled in cash, without interest, equal to the product of (i) the aggregate number of shares of Company common stock
 
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subject to each such Company Compensatory Award as of the effective time and (ii) the excess, if any, of $3.40 over any per share exercise or purchase price of such Company Compensatory Award immediately prior to such cancellation. The number of shares of Company common stock subject to any portion of any Company Compensatory Award that vests based on achievement of pre-established performance criteria that will be settled in cash as described in the preceding sentence will be determined in accordance with the terms of the applicable Company Compensatory Award agreement and, to the extent applicable, any other written agreement between the Company and the holder of the Company Compensatory Award.
As of September 12, 2022, the Company’s executive officers held Company Compensatory Awards covering an aggregate of 2,818,740 shares of Company common stock (after taking into account the vesting acceleration provisions applicable to the applicable Company Compensatory Awards subject to performance-based vesting) and the Company’s non-employee directors held Company Compensatory Awards covering an aggregate of 1,090,847 shares of Company common stock.
Estimate of Amounts Payable for the Company Compensatory Awards
If the effective time occurred on September 12, 2022, the aggregate Company Compensatory Award cash out amount that would be payable to the Company’s executive officers would have been $5,902,008.60, and the aggregate Company Compensatory Award cash out amount that would be payable to the Company’s non-employee directors would have been $3,708,879.80. For information on the amounts that would have been payable to each of the Company’s named executive officers in respect of their Company Compensatory Awards, see the “Named Executive Officer Merger-Related Compensation” table below.
Transaction Bonuses
In connection with the signing of the merger agreement and in recognition of their significant contribution to the success of the Company, the Company Board awarded transaction bonuses to the Company’s named executive officers, as follows: in the amount of $400,000 to Raouf S. Ghali, the Company’s Chief Executive Officer, in the amount of $200,000 to Todd Weintraub, the Company’s Chief Financial Officer, and in the amount of $120,000 to Abdo E. Kardous, the Company’s Regional President (Middle East). In addition, the Company awarded transaction bonuses to other executives in the aggregate amount of $680,000.
Following the Merger
At the effective time, the directors of Merger Sub will be the directors of the surviving company and the officers of Merger Sub immediately prior to the effective time will be the officers of the surviving company, in each case, until the earlier of their resignation or removal or until their successors are duly elected and qualified, subject to the surviving company’s certificate of incorporation and bylaws and the DGCL.
Indemnification, Exculpation and Insurance
Under the merger agreement, Parent agreed that the Company’s current and former directors and officers will be indemnified and held harmless for six years following the effective time, and will be entitled to the advancement of expenses, to the fullest extent permitted under applicable law and the Company Charter and Company Bylaws for acts or omissions occurring at or prior to the effective time. In addition, at or prior to the effective time, the Company will cause the surviving company to obtain and pay the premium for a six year prepaid non-cancelable “tail policy” providing directors’ and officers’ liability insurance on terms that are no less favorable than the coverage provided under the Company’s existing policies, with respect to matters arising at or prior to the effective time (subject to a 300% cap on the cost of such insurance as compared to premiums paid in the 2021 fiscal year). For more information, see “The Merger Agreement — Directors’ and Officers’ Indemnification and Insurance.”
New Arrangements
As of the date of this proxy statement, none of the Company’s directors or executive officers have entered into any amendments or modifications to their existing or any new employment, compensation or
 
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other agreements or arrangements with the Company in connection with the merger, nor have they entered into any such agreements or arrangements with Parent or its affiliates. The merger is not conditioned upon any director or executive officer of the Company entering into any such agreements or arrangements.
It is possible that the Company’s employees, including executive officers, will enter into new compensation arrangements with Parent or its affiliates. Such arrangements may include agreements regarding future terms of employment or the right to receive retention awards. As of the date of this proxy statement, no compensation arrangements between such persons and Parent and/or its affiliates have been established or discussed with any of the Company’s employees.
Post-Closing Compensation and Employee Benefits
The merger agreement provides that Parent will provide, or cause the surviving company to provide, to any continuing employee, the compensation and benefits described under “The Merger Agreement — Employee Benefits Matters.”
Named Executive Officer Merger-Related Compensation
This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of the Company’s named executive officers that is based on or otherwise relates to the merger, which is referred to as “golden parachute” compensation by the applicable SEC disclosure rules. The individuals disclosed within this section and referred to as the “named executive officers” are the Company’s current President and Chief Executive Officer; Regional President (Middle East); and Chief Financial Officer for the Company’s 2021 fiscal year.
The amounts set forth in the table are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement and in the footnotes to the table. As a result, the actual amounts, if any, that a named executive officer will receive may materially differ from the amounts set forth in the table. The calculations in the table below do not include amounts the Company’s named executive officers were already entitled to receive or vested in as of the date hereof or amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all the salaried employees of the Company.
The table below assumes that (i) the effective time will occur on December 1, 2022, (ii) the employment of the named executive officer will be terminated on such date in a manner entitling the named executive officer to receive severance payments and benefits under the terms of the executive severance agreements described under “Executive Severance Agreements,” ​(iii) the named executive officer’s base salary remains unchanged from those in place as of April 1, 2021, (iv) no named executive officer receives any additional equity grants to acquire common stock of the Company on or prior to the effective time, and (v) no named executive officer enters into new agreements or is otherwise legally entitled to, prior to the effective time, additional compensation or benefits. For a narrative description of the terms and conditions applicable to the payments quantified in the table below, see the full “Interests of the Company’s Directors and Executive Officers in the Merger” section.
Potential Change in Control Payments to Named Executive Officers
Name
Cash ($)
Equity ($)(2)
Perquisites/
Benefits ($)
Total ($)
Raouf S. Ghali
President and Chief Executive Officer
1,850,000(1) 3,526,167 5,376,167
Abdo E. Kardous
Regional President (Middle East)
1,170,000(3) 507,518 1,677,518
Todd Weintraub
Chief Financial Officer
1,020,000(4) 861,951 1,881,951
 
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(1)
Represents (a) $400,000 payable to Mr. Ghali as a transaction bonus payable upon the consummation of the Merger and (b) $1,450,000 in severance payable to Mr. Ghali under the Company’s 2016 Executive Retention Plan. Under the 2016 Executive Retention Plan, Mr. Ghali is entitled to a lump sum cash payment in amount equal to two times his base salary upon termination of his employment by the Company without “Cause” ​(as defined in the 2016 Executive Retention Plan) or by him for “Good Reason” ​(as defined in the 2016 Executive Retention Plan).
(2)
All amounts shown in this column represent the cash value that will be paid with respect to the Company RSUs and Company DSUs that will vest on an accelerated basis in connection with the Merger, as described under the heading “The Merger-Treatment of Company Compensatory Awards”. This is a “single-trigger” benefit. The value is calculated by multiplying the number of Company RSUs and Company DSUs being vested by $3.40 per share of Company Common Stock (i.e., the merger consideration). The number of Company RSUs and Company DSUs for which vesting will accelerate for each named executive officer is set forth below.
Name
Company RSUs
Company DSUs
Raouf S. Ghali
182,926 854,182
Abdo E. Kardous
149,270
Todd Weintraub
44,716 208,799
(3)
Represents (a) $120,000 payable to Mr. Kardous as a transaction bonus payable upon the consummation of the Merger and (b) $1,050,000 payable to Mr. Kardous under the Company’s 2016 Executive Retention Plan. Under the 2016 Executive Retention Plan, Mr. Kardous is entitled to “double-trigger” severance payment consisting of a lump sum in an amount equal to two times Mr. Kardous’ base salary with respect to a termination of his employment by the Company without “Cause” ​(as defined in the 2016 Executive Retention Plan) or by Mr. Kardous for “Good Reason” ​(as defined in the 2016 Executive Retention Plan) within one year following a Change in Control (as defined in the 2016 Executive Retention Plan). Under the 2016 Executive Retention Plan, in the event of a termination by the Company of Mr. Kardous’ employment without “Cause” or by Mr. Kardous for “Good Reason” that does not occur within one year following a Change in Control, Mr. Kardous would be entitled to a “single-trigger” severance payment consisting of a lump sum in an amount equal to Mr. Kardous’ base salary, or $525,000.
(4)
Represents (a) $200,000 payable to Mr. Weintraub as a transaction bonus payable upon the consummation of the Merger and (b) $820,000 payable to Mr. Weintraub under the Company’s 2016 Executive Retention Plan. Under the 2016 Executive Retention Plan, Mr. Weintraub is entitled to “double-trigger” severance payment consisting of a lump sum in an amount equal to two times Mr. Weintraub’s base salary with respect to a termination of his employment by the Company without “Cause” ​(as defined in the 2016 Executive Retention Plan) or by Mr. Weintraub for “Good Reason” (as defined in the 2016 Executive Retention Plan) within one year following a Change in Control (as defined in the 2016 Executive Retention Plan). In the event of a termination by the Company of Mr. Weintraub’s employment without “Cause” or by Mr. Weintraub for “Good Reason” that does not occur within one year following a Change in Control, Mr. Weintraub would be entitled to a “single-trigger” severance payment consisting of a lump sum in an amount equal to Mr. Weintraub’s base salary, or $410,000.
Any amounts shown in the table above that are subject to the golden parachute excise tax under Section 4999 of the Code (as defined below) may be subject to reduction to the extent such reduction would result in the named executive officer retaining a greater after-tax amount of such payment.
Certain U.S. Federal Income Tax Consequences of the Merger
The following is a general discussion of certain U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Company common stock who hold their stock as a capital asset within the meaning of section 1221 of the U.S. Internal Revenue Code of 1986, which we refer to as the Code. This discussion does not address U.S. federal income tax consequences with respect to holders other than U.S. holders. This discussion is based on the Code, the U.S. Treasury Department regulations issued under the
 
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Code, which we refer to as the Treasury Regulations, and administrative rulings and court decisions in effect as of the date of this proxy statement, all of which are subject to change or differing interpretations at any time, possibly with retroactive effect. Any such change or interpretation could affect the accuracy of the statements and conclusions set forth herein. This discussion is not binding on the Internal Revenue Service, which we refer to as the IRS, or a court and there can be no assurance that the tax consequences described in this discussion will not be challenged by the IRS or that they would be sustained by a court if so challenged. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger.
For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Company common stock that is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.
This discussion is not a complete description of all of the U.S. federal income tax consequences of the merger and, in particular, does not address U.S. federal income tax considerations applicable to U.S. holders of Company common stock who are subject to special treatment under U.S. federal income tax law including, for example, partnerships (or entities or arrangements treated as partnerships for U.S. federal income tax purposes) and partners therein, financial institutions, dealers in securities, insurance companies, securities or currency dealers, traders in securities who elect to use the mark-to-market method of accounting, holders that hold, directly or constructively (or that held, directly or constructively, at any time during the five-year period ending on the date of the merger) 5% or more of the outstanding Company common stock, tax-exempt investors, S corporations, holders whose functional currency is not the U.S. dollar, tax-deferred or other retirement accounts, U.S. expatriates, former long-term residents of the United States, holders who acquired Company common stock pursuant to the exercise of an employee stock option or right or otherwise as compensation, and holders who hold Company common stock as part of a hedge, straddle, constructive sale, conversion transaction, or other integrated investment. Also, this discussion does not address U.S. federal income tax considerations applicable to a holder of Company common stock who exercises appraisal rights under the DGCL. In addition, no information is provided with respect to the tax consequences of the merger under any U.S. federal law other than income tax laws (including, for example the U.S. federal estate, gift, Medicare, and alternative minimum tax laws), or any applicable state, local, or foreign tax laws. This discussion does not address the impact of Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA”). This discussion does not address the tax consequences of any transaction other than the merger.
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Company common stock, the tax treatment of a partner in such a partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds Company common stock, and any partners in such partnership, should consult their own independent tax advisors regarding the tax consequences of the merger to their specific circumstances.
The tax consequences of the merger will depend on a holder’s specific situation. Holders should consult their tax advisors as to the tax consequences of the merger relevant to their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.
The receipt of cash by U.S. holders in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of Company common stock pursuant
 
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to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (i) the amount of cash received in the merger and (ii) the U.S. holder’s adjusted tax basis in its Company common stock exchanged therefor.
A U.S. holder’s adjusted tax basis in its shares of Company common stock will generally equal the price the U.S. holder paid for such shares. If a U.S. holder’s holding period in the shares of Company common stock surrendered in the merger is greater than one year as of the date of the merger, the gain or loss generally will be long-term capital gain or loss. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates currently, which rates are subject to change. The deductibility of a capital loss recognized on the exchange may be subject to limitations. If a U.S. holder acquired different blocks of Company common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of Company common stock.
Information Reporting and Backup Withholding
Payments of cash to a U.S. holder of Company common stock pursuant to the merger may, under certain circumstances, be subject to information reporting and backup withholding, unless the U.S. holder provides proof of an applicable exemption or furnishes its correct taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules. In addition, if the paying agent is not provided with a U.S. holder’s correct taxpayer identification number or other adequate basis for exemption, the U.S. holder may be subject to certain penalties imposed by the IRS. Certain holders (such as corporations) are exempt from backup withholding.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.
Holders of Company common stock should consult their own tax advisors with respect to the tax consequences of the merger in their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.
Litigation Related to the Merger
Following the announcement of the merger, Shiva Stein, a purported stockholder of the Company, filed a complaint captioned Stein v. Hill International, Inc. et al, 1:22-cv-07907 in the United States District Court for the Southern District of New York on September 15, 2022 (the “Stein Complaint”). The Stein Complaint generally alleges that the Company made misleading or materially incomplete disclosures regarding the merger in the preliminary proxy statement on Schedule 14A filed with the SEC on September 14, 2022, including but not limited to claims that the preliminary proxy statement omitted material information regarding the financial projections provided to Houlihan Lokey and the valuation analyses performed by Houlihan Lokey, and that, as a result, the Company and each Company Board member violated Section 14(a) of the Exchange Act and each Company Board member violated Section 20(a) of the Exchange Act. The Stein Complaint also alleges that all defendants violated 17 C.F.R. § 244.100. The Stein Complaint seeks (i) injunctive relief, (ii) rescission in the event the merger is consummated or alternatively rescissory damages, (iii) an accounting for all damages suffered, (iv) plaintiff’s costs and disbursements in connection with the action, including plaintiff’s attorneys’ and experts’ fees, and (v) such other relief as the Court deems just and proper. Additionally, the Company has received demand letters from purported stockholders of the Company that contain claims similar to those in the Stein Complaint. The Company and the Company Board believe that the claims asserted in the Stein Complaint and demand letters are without merit. Additional lawsuits and demand letters arising out of or relating to the merger agreement or the merger may be filed or made in the future. If additional similar lawsuits or demands are filed or made, absent new or different material allegations, the Company will not necessarily announce such additional filings, unless such announcement or disclosure is required by law.
The outcome of any current or future litigation related to the transactions, including the merger, is uncertain. Such litigation, if not resolved, could prevent or delay consummation of the merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and
 
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officers. One of the conditions to the consummation of the merger is that no governmental entity of competent jurisdiction (i) enacted, issued or promulgated any order that is in effect or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect, in each case which has the effect of preventing, making illegal or otherwise prohibiting the consummation of the merger. Therefore, if a plaintiff were successful in obtaining an injunction prohibiting the consummation of the merger, then such injunction may prevent the merger from being consummated, or from being consummated within the expected time frame.
Regulatory Approvals
HSR Clearance.   Under the terms of the merger agreement, the merger cannot be consummated until the applicable waiting period (and any extension thereof) under the HSR Act has expired or been terminated.
Under the HSR Act and the rules promulgated thereunder by the FTC, the merger cannot be consummated until each of the Company and Parent files a notification and report form with the FTC and the Antitrust Division of the DOJ under the HSR Act and the applicable waiting period has expired or been terminated. Each of the Company and Parent filed such a notification and report form with the FTC and DOJ.
On September 29, 2022 at 11:59 p.m. Eastern Time, the applicable waiting period under the HSR Act expired.
At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the Antitrust Division of the DOJ or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, or part of it, seeking divestiture of substantial assets of the Company or Parent, requiring the Company or Parent to license, or hold separate, assets or terminating existing relationships and contractual rights. At any time before or after the consummation of the merger, and notwithstanding the termination of the waiting period under the HSR Act, state attorneys general and other regulators could take such action under state law or the antitrust laws of the United States, as they deem necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the Company or Parent. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.
There can be no assurance that the regulatory clearances and approvals described above will be obtained and, if obtained, there can be no assurance as to the timing of any approvals, the ability of the parties to obtain the approvals on satisfactory terms or the absence of any litigation challenging such approvals. There can also be no assurance that the DOJ, the FTC, or any other governmental entity or any private party will not attempt to challenge the merger and, if such a challenge is made, there can be no assurance as to its result.
Other Regulatory Clearances.   Merger control filings or clearances are required or advisable in other jurisdictions. The merger cannot be consummated until after the mandatory approval requirements outside of the United States have been obtained under applicable antitrust and foreign investment laws. The relevant authorities could take such actions under the applicable antitrust and foreign investment laws as they deem necessary or desirable, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of one or both of the parties, requiring the parties to license or hold separate assets or terminate existing relationships and contractual rights, or requiring the parties to agree to other remedies. Any one of these requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the completion, or reduce the anticipated benefits, of the merger.
Although the Company and Parent believe that the merger will not violate the antitrust or foreign investment laws and expect that all required regulatory clearances and approvals will be obtained, the Company and Parent cannot assure that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions, restrictions, qualifications, requirements or limitations on the completion of the merger, including the requirement to divest assets, license or hold separate assets or terminate existing relationships and contractual rights, or agree to other remedies, or require changes to the terms of the merger
 
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agreement, or that a challenge to the merger on antitrust or foreign investment grounds will not be made, or if such challenge is made, what the result will be. These conditions or changes could result in the conditions to the merger not being satisfied. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained and there may be a substantial period of time between the approval of the proposal to approve and adopt the merger agreement by stockholders and the completion of the merger.
 
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THE MERGER AGREEMENT
Explanatory Note Regarding the Merger Agreement
The following is a summary of certain material terms of the merger agreement and is qualified in its entirety by reference to the complete text of the merger agreement, which is included as Annex A to this proxy statement and is incorporated herein by reference in its entirety. This summary is not intended to provide you with any other factual information about the Company, Parent or Merger Sub. You are urged to read the merger agreement carefully and in its entirety as well as this proxy statement before making any decisions regarding the merger.
The merger agreement contains representations and warranties by each of the parties to the merger agreement. These representations and warranties have been made solely for the benefit of the other parties to the merger agreement; have been made only for purposes of the merger agreement; have been qualified by certain documents filed with, or furnished to, the SEC by the Company or by Parent; have been qualified by confidential disclosures made to the Company or Parent and Merger Sub, as applicable, in connection with the merger agreement; are subject to materiality qualifications contained in the merger agreement that may differ from what may be viewed as material by investors; were made only as of the date of the merger agreement or such other date as is specified in the merger agreement; and have been included in the merger agreement for the purpose of allocating risk between the Company, on the one hand, and Parent and Merger Sub, on the other hand, rather than establishing matters as facts.
You should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Parent or Merger Sub or any of their respective affiliates or businesses. 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 Company’s or Parent’s public disclosures. Accordingly, the representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement. See “Where You Can Find More Information” beginning on page 85 of this proxy statement.
Structure of the Merger
At the effective time of the merger, subject to the satisfaction or waiver of the conditions set forth in the merger agreement, Merger Sub will be merged with and into the Company, whereupon the separate existence of Merger Sub will cease, with the Company surviving the merger. Following the merger, the Company will be a wholly owned subsidiary of Parent. The certificate of incorporation and the bylaws of Merger Sub as in effect immediately prior to the effective time will be the certificate of incorporation and bylaws, respectively, of the surviving company; provided that the name of the surviving company will be “Hill International, Inc.” Unless otherwise determined by Parent prior to the effective time of the merger, the directors and officers of Merger Sub immediately prior to the effective time of the merger, from and after the effective time of the merger, will be the initial directors and officers of the surviving company until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.
Closing and Effective Time of the Merger
Unless otherwise mutually agreed by the Company and Parent, the closing of the merger will take place at 10:00 a.m., Pennsylvania time, on the second business day following the satisfaction or, to the extent permitted by applicable law, waiver of the last of the conditions set forth in the merger agreement and described in the section entitled “— Conditions to Completion of the Merger” ​(other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the closing).
The merger will become effective at such date and time as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or on such later date and time as may be agreed by the Company and Parent and specified in the certificate of merger.
 
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As of the date of this proxy statement, we expect to complete the merger in the fourth quarter of 2022. However, completion of the merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to the completion of the merger, which are described below and include regulatory clearances and approvals, and it is possible that factors outside the control of the Company or Parent could delay the completion of the merger, or prevent it from being completed at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required approvals.
Consideration To Be Received in the Merger
At the effective time, each share of Company common stock issued and outstanding immediately prior to the effective time (other than excluded shares and appraisal shares (each as defined below)) will be converted into the right to receive $3.40 in cash, without interest, less any applicable withholding taxes. At the effective time, all such shares of Company common stock will cease to be outstanding, will be automatically cancelled and will cease to exist, and each applicable holder of such shares of Company common stock will thereafter only have the right to receive the merger consideration therefor upon the surrender of such shares.
At the effective time, each share of Company common stock that is, immediately prior to the effective time, owned or held in treasury by the Company or is owned by Parent or Merger Sub (collectively, the “excluded shares”) will automatically be cancelled and retired and will cease to exist, and no consideration or payment will be delivered in exchange therefor or in respect thereof.
Any shares of Company common stock that constitute shares of Company common stock issued and outstanding immediately prior to the Effective Time that are held by a holder who is entitled to demand and has properly exercised and perfected such holder’s demand for appraisal of such shares pursuant to, and who complies in all respects with, Section 262 of the DGCL and has not effectively and validly withdrawn or lost such holder’s rights to appraisal (collectively, the “appraisal shares”) shall not be converted into the right to receive $3.40 in cash, and each holder of Appraisal Shares shall be entitled only to receive such consideration as may be determined to be due with respect to such Appraisal Shares pursuant to Section 262 of the DGCL (it being understood and acknowledged that from and after the Effective Time, such Appraisal Shares shall no longer be outstanding, shall automatically be canceled and shall cease to exist and such holder shall cease to have any rights with respect thereto other than the right to receive the consideration therefor as may be determined in accordance with Section 262 of the DGCL).
Shares of Company common stock issued and outstanding immediately prior to the effective time (other than cancelled shares and converted shares) and held by a holder who did not vote in favor of the adoption of the merger agreement and has properly exercised appraisal rights in respect of such shares in accordance with Section 262 of the DGCL (the “dissenting shares”) will not be cancelled and converted into the right to receive the merger consideration. Such stockholders will instead be entitled to the appraisal rights granted by Section 262 of the DGCL, as described in the section entitled “Appraisal Rights” and Annex C of this proxy statement.
Each share of common stock of Merger Sub issued and outstanding immediately prior to the effective time will be converted into one share of common stock of the surviving company.
Procedures for Surrendering Shares for Payment
Parent will deposit, or will cause to be deposited, with a paying agent selected by Parent and reasonably acceptable to the Company, for the benefit of the holders of Company common stock and pursuant to a paying agent agreement, the terms of which will be reasonably acceptable to the Company, cash in immediately available funds in an amount sufficient for the paying agent to make the payment of the merger consideration to Company stockholders.
Promptly as reasonably practicable after the effective time, the paying agent will mail to each holder of record of a certificate which immediately prior to the effective time represented outstanding shares of Company common stock (other than cancelled shares, dissenting shares and converted shares) a letter of transmittal and instructions for effecting the surrender of the certificates in exchange for the amount to which
 
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such stockholder is entitled as a result of the merger pursuant to the merger agreement. Upon surrender of a certificate representing shares of Company common stock for cancellation to the paying agent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto and such other documents as may be required pursuant to such instructions, the holder of such certificate will be entitled to receive in exchange therefor the merger consideration for each share of Company common stock formerly represented by such certificate.
In the event that any certificate representing shares of Company common stock has been lost, stolen or destroyed, the paying agent will issue in exchange for such lost, stolen or destroyed certificate, upon the making of an affidavit of that fact by the holder thereof and, if required by Parent or the Paying Agent, an indemnity bond, the merger consideration payable in respect thereof.
Holders of book-entry shares of Company common stock will not be required to deliver certificates representing shares of Company common stock or an executed letter of transmittal to the paying agent to receive the merger consideration, and will instead automatically be entitled to receive the merger consideration at the effective time of the merger.
No interest will be paid or accrued on any portion of the merger consideration payable upon surrender of certificates representing shares of Company common stock (or affidavits of loss in lieu thereof) or in respect of any book-entry shares. Following the first anniversary of the effective time, Parent will be entitled to require the paying agent to deliver to it any undisbursed funds (including any interest received with respect thereto) remaining in the payment fund, and thereafter holders of certificates or book-entry shares representing shares of Company common stock will be entitled to look only to Parent with respect to the merger consideration payable upon due surrender of their certificates or book-entry shares.
As of the effective time of the merger, the share transfer books of the Company with respect to the shares of Company common stock will be closed and thereafter there will be no further registration of transfers of shares of the Company.
Treatment of Company Compensatory Awards
At the effective time of the merger, pursuant to the applicable Company stock incentive plan, each Company Compensatory Award, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall be cancelled and extinguished and, in exchange therefor, each former holder of any such Company Compensatory Award shall have the right to receive an amount in cash, without interest, equal to the product of (i) the aggregate number of shares of Company common stock subject to each such Company Compensatory Award as of the Effective Time and (ii) the excess, if any, of $3.40 over any per share exercise or purchase price of such Company Compensatory Award immediately prior to such cancellation.
Withholding
Each of the paying agent, the Company, Parent, Merger Sub and the surviving company will be entitled to deduct and withhold from amounts otherwise payable pursuant to the merger agreement such amounts as are required to be deducted or withheld with respect to such payment under the Code or any provision of state, local or foreign law. To the extent that amounts are deducted or withheld, and timely remitted to the appropriate governmental entity, such amounts will be treated as having been paid to the person in respect of which such deduction or withholding was made.
Representations and Warranties
The Company’s representations and warranties to Parent and Merger Sub in the merger agreement relate to, among other things:

due organization, valid existence, good standing and authority and qualification to conduct business with respect to the Company and its subsidiaries;

the certificate of incorporation and bylaws of the Company and its subsidiaries;

the Company’s corporate power and authority to enter into, deliver and perform its obligations under the Merger Agreement and the enforceability of the Merger Agreement against the Company;
 
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required consents, approvals and regulatory filings in connection with the Merger Agreement;

ownership and capital structure of the Company and its subsidiaries;

compliance with the Sarbanes-Oxley Act and the applicable listing and other rules and regulations of Nasdaq;

intellectual property;

ownership of real property and leasehold interests;

the existence and enforceability of specified categories of the Company’s material contracts, and the absence of any notices with respect to termination or intent not to renew the material contracts;

the absence of violations of export and reexport control laws and regulations;

governmental authorizations necessary to enable the Company and its subsidiaries to conduct its business;

legal proceedings;

tax matters;

employee benefit plans;

labor and employment matters

environmental matters

insurance matters;

accuracy of proxy statement;

opinion of the financial advisor;

payment of fees to brokers, financial advisors or similar other persons in connection with the Merger Agreement;

the inapplicability of any restrictions on business combinations or other anti-takeover laws;

largest customers of the Company;

compliance with contractual specifications, requirements, covenants and all warranties made by the Company and its subsidiaries;

government contracts and industrial security matters;

anti-corruption laws, anti-money laundering laws and similar rules and regulations;

privacy and information security;

Parent’s and Merger Sub’s representations and warranties to the Company in the merger agreement relate to, among other things: due organization, valid existence, good standing and authority and qualification to conduct business with respect to the Parent and Merger Sub;

legal proceedings;

Parent and Merger Sub’s corporate power and authority to enter into, deliver and perform its obligations under the Merger Agreement and the enforceability of the Merger Agreement against Parent and Merger Sub;

Interested stockholder;

availability of funds required for the transaction;

payment of fees to brokers, financial advisors or similar other persons in connection with the Merger Agreement;

ownership and capital structure of Merger Sub;

the absence of any formal or informal arrangements or other understandings with any Company stockholder, director, officer, employee or other affiliate of the Company;
 
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accuracy of the proxy statement;
None of the representations and warranties in the merger agreement survive the effective time.
Definition of “Company Material Adverse Effect”
Many of the representations and warranties in the merger agreement are qualified by a “Company Material Adverse Effect” ​(as defined below) standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct has had or would reasonably be expected to have a Company Material Adverse Effect). For purposes of the merger agreement, a “Company Material Adverse Effect” means any effect, change, event, occurrence, circumstance, development, condition, or fact that has a material adverse effect, individually or in the aggregate, (x) upon the business, financial condition, assets, Liabilities or results of operations of the Acquired Companies, taken as a whole, or (y) the ability of the Company to perform its obligations under the merger agreement or to consummate the merger, or on the consummation of the merger and the other transactions(as defined below in the section entitled “Termination of the Merger Agreement”).
However, a number of factors are specifically excluded and may not be taken into account when determining whether a Company Material Adverse Effect has occurred for purposes of clause (x) above, including:
(i) any changes in the Company’s stock price or trading volume (it being understood that any Effect giving rise to or contributing to such changes may be taken into account in determining whether there has been a Company Material Adverse Effect); (ii) any failure by the Company to meet, or changes to, published revenue, earnings or other similar financial projections, or any failure by the Company to meet any internal budgets, plans or forecasts of revenue, earnings or other financial projections (in each case, it being understood that any Effect giving rise to or contributing to any such failures in this clause (ii) may be taken into account in determining whether there has been a Company Material Adverse Effect); (iii) any changes in credit ratings and analysts’ recommendations or ratings with respect to the Company and each of its subsidiaries (in each case, it being understood that any Effect giving rise to or contributing to any such changes in this clause (iii) may be taken into account in determining whether there has been a Company Material Adverse Effect); (iv) changes in general business, economic, financial, social or political conditions in the United States or any other country or region in the world; (v) changes in the economic, business and financial environment generally affecting the industry in which the Acquired Companies operate; (vi) acts of hostilities, war (whether or not declared), sabotage, cyberterrorism (including by means of cyber-attack by or sponsored by a Governmental Entity), terrorism or military actions in the United States or any other country or region in the world, including any outbreak, escalation or general worsening of any such acts of hostilities, war, sabotage, cyberterrorism, terrorism or military actions; (vii) epidemics, pandemics or disease outbreaks (including, for the avoidance of doubt, COVID-19, any COVID-19 Measures, or effects thereof), including any general worsening of any such epidemics, pandemics or disease outbreaks (including, for the avoidance of doubt, COVID-19, any COVID-19 Measures, or effects thereof); (viii) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters or acts of God or weather conditions in the United States or any other country or region in the world, or any worsening of such conditions; (ix) the public announcement of this Agreement or the pendency of the Transactions; (x) any action taken at the express written direction or consent of Parent or Merger Sub after the date of this Agreement; (xi) any action expressly required to be taken by this Agreement or any omission of action as required by this Agreement; (xii) any change in Law or regulation (or the enforcement or interpretation thereof); or (xiii) any change in GAAP or other accounting standards (or the enforcement or interpretation thereof); provided further, however, that if the Effects set forth in clauses (iv), (v), (vi), (vii), (viii), (xii) and (xiii) have a disproportionate impact on the Acquired Companies, taken as a whole, relative to the other participants in the Acquired Companies’ industry, such Effects may be taken into account in determining whether a Company Material Adverse Effect has occurred to the extent of such disproportionate impact.
Conduct of the Business Pending the Merger
The Company has agreed to certain covenants in the merger agreement restricting the conduct of its business between the date of the merger agreement and the effective time (or any earlier termination of the
 
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merger agreement). In general, except as may be required by applicable law, as specifically permitted or required by the merger agreement, as set forth on the disclosure schedules to the merger agreement, or as may be consented to in writing by Parent, the Company is required to, and to cause each of its subsidiaries to, conduct the business of the Acquired Companies in all material respects in the ordinary course of business in a manner consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to, except for actions taken (or not taken) in connection with any COVID-19 Measures, preserve its assets and business organization intact in all material respects and maintain its existing business relations and goodwill with customers, suppliers, licensors, Governmental Entities, independent contractors, employees and business partners, in each case, whose business relationships are material to the Acquired Companies, taken as a whole.
In addition, the Company (on behalf of itself and its subsidiaries) agreed to restrictions between the date of the merger agreement and the effective time (or any earlier termination of the merger agreement) on, among other things and with certain exceptions (including if required by applicable law, specifically permitted or required by the merger agreement, set forth on the disclosure schedules to the merger agreement or consented to in writing by Parent and including, in certain cases, ordinary course of business exceptions):

amend the Company Certificate of Incorporation, the Company Bylaws or other comparable Organizational Documents of the Company’s Subsidiaries (whether by merger, consolidation or otherwise);

(i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock or other Securities of any Acquired Company, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent in the ordinary course of business consistent with past practice, (ii) adjust, split, reverse split, combine, subdivide or reclassify any capital stock or other Securities of the Company or any of its Subsidiaries, (iii) issue or authorize the issuance of any other Securities in respect of, in lieu of or in substitution for, shares of capital stock or any other Securities of any Acquired Company (except as expressly permitted in the merger agreement), or (iv) purchase, redeem, repurchase or otherwise acquire, directly or indirectly, any Securities of any Acquired Company, except for acquisitions of shares of Company common stock by the Company in satisfaction of the applicable exercise price and/or withholding Taxes in connection with the exercise, vesting or settlement of any Company Compensatory Awards;

issue, deliver, sell, modify, grant, pledge, transfer, subject to any Encumbrance or dispose of, or authorize the same with respect to, directly or indirectly, any Securities of any Acquired Company, other than the issuance of shares of Company common stock upon the exercise of Company Options or the settlement of Company DSUs or Company RSUs that are in each case outstanding on the date hereof (or permitted to be granted pursuant to the merger agreement), in accordance with the respective terms of such Company Options, Company DSUs or Company RSUs, or (ii) amend any term of any security of the Company and its subsidiaries (in each case, whether by merger, consolidation or otherwise);

adopt a plan or agreement of, or resolutions providing for or authorizing, or effect, any complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, in each case with respect to any of the Company and its subsidiaries;

except as required by any Company Benefit Plan in existence as of the date hereof, (i) establish, adopt, enter into, materially amend or terminate any Company Benefit Plan, or any plan, program, policy, practice, agreement or other arrangement that would be a Company Benefit Plan if it had been in existence on the date of this Agreement (other than offer letters that provide for at-will employment without any severance, termination, change in control or similar benefits, other than severance benefits in accordance with (and not to exceed amounts permitted by) the Company and its subsidiaries policy; (ii) grant or pay, or commit to grant or pay, any bonus, incentive or profit-sharing award or payment, or increase the base salary and/or cash bonus opportunity or other compensation to any director, officer, employee, or consultant of the Company and its subsidiaries, except in each case, (A) as required by applicable Law or any Company Benefit Plan in effect as of the date of this Agreement, or (B) in the case of increases in annual base salaries and the payment or grant of
 
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cash incentive compensation payable to any of its current employees at the rank or title below the rank or title of Vice President, at times and in dollar amounts in the ordinary course of business in connection with the Company’s annual salary review process consistent with past practice; (iii) accelerate or take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any current or former director, officer, employee, or consultant of any Acquired Company; (iv) enter into, extend, amend or modify, or terminate any employment, severance, termination, change in control, retention, individual consulting or other similar agreement with any current or former director, officer, employee, or consultant of, or individual service provider to, any Acquired Company (other than offer letters that provide for at-will employment without any severance, termination, change in control or similar benefits, other than severance benefits in accordance with (and not to exceed amounts permitted by) the Acquired Company policy set forth on for newly hired employees or individual service providers who are hired in the ordinary course of business and consistent with past practice and whose annual base compensation does not exceed $250,000 individually); (v) communicate with the employees of any Acquired Company regarding the compensation, benefits or other treatment they will receive following the Effective Time, unless such communication is (A) approved by Parent in advance of such communication or (B) required by applicable Law; or (vi) except as may be required by GAAP, materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined;

hire, promote or terminate the employment of (other than for cause, death or disability) any employee with annual base compensation above $250,000;

take any action requiring notice to employees, or triggering any other obligations, under WARN, or any similar state, local or foreign Law, prior to the Closing;

waive, release or limit any restrictive covenant of any current or former employee or independent contractor of an Acquired Company;

make any loan or advance to (other than travel and similar advances to its employees in the ordinary course of business and consistent with past practice), or capital contribution to, or investment in, any Person (other than wholly owned Subsidiaries of the Company in the ordinary course of business consistent with past practice);

forgive any loans or advances to any officers, employees or directors of the Acquired Companies or change its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise, except in the ordinary course of business in connection with relocation activities to any employees of the Acquired Companies;

agree to or otherwise commence, release, compromise, assign, settle or resolve, in whole or in part, any threatened or pending Legal Proceeding or insurance claim, other than settlements that result solely in monetary obligations involving payment (without the admission of wrongdoing) by an Acquired Company of an amount not greater than $500,000 (net of insurance proceeds) in the aggregate for all such matters;

fail to use commercially reasonable efforts to maintain in effect material insurance policies covering the Acquired Companies and their respective properties, assets and businesses;

acquire any Entity, business, or all or a material portion of the assets, or equity interest of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, joint venture, purchase of assets, merger, consolidation, or otherwise), or acquire any real property or ownership interest therein;

sell, lease, license, pledge, transfer, abandon, mortgage, lease (as lessor), subject to any Encumbrance or otherwise dispose of any assets (including Intellectual Property Assets), business, properties or rights of the Acquired Companies, except (A) pursuant to existing Contracts or Leases or commitments in effect as of the date hereof, (B) issuance of non-exclusive licenses to its customers in the ordinary course of business consistent with past practice, (C) sales of used and obsolete equipment in the ordinary course of business and consistent with past practice, or (D) Permitted Encumbrances
 
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incurred in the ordinary course of business, or (ii) enter into any new line of business or (iii) create any new Subsidiaries or Joint Ventures;

cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority or allow to lapse (except with respect to Patents expiring in accordance with their terms) any Company Intellectual Property Assets; (ii) fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any material Company Intellectual Property Asset, including, allowing patent families with pending applications to close by not filing a continuing application; (iii) make any change in a Company Intellectual Property Asset that is or would reasonably be expected to materially impair such Company Intellectual Property Asset or the Acquired Companies’ rights with respect thereto; (iv) impair an Acquired Companies’ right to use any of the Intellectual Property Assets necessary for or otherwise material to the conduct of the Acquired Companies’ businesses as currently conducted; (v) disclose to any Person, any Trade Secrets, know-how or confidential or proprietary information, except, in the case of confidential or proprietary information, in the ordinary course of business; or (vi) fail to take or maintain reasonable measures to protect the confidentiality and value of material Trade Secrets included in the Company Intellectual Property Assets;

except as expressly required pursuant to the terms thereof, (i) pay, discharge or satisfy any Indebtedness that has a prepayment cost, “make whole” amount, prepayment penalty or similar obligation (other than Indebtedness incurred by the Company or its wholly owned Subsidiaries and solely owed to the Company or its wholly owned Subsidiaries) or (ii) cancel any material Indebtedness (individually or in the aggregate) owing to any Acquired Company or settle, waive or amend any claims or rights of substantial value;

make any material change to the accounting methods, policies and procedures of the Acquired Companies, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act;

incur, create, assume or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for any Indebtedness, including by the issuance of any debt security (or any option, warrant, call or similar right to acquire any debt security), except (A) for borrowings under the Company’s current credit facilities in the ordinary course of business (including with respect to equipment leasing), or (B) in respect of Indebtedness owing by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, in the ordinary course of business consistent with past practice, or (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or obligations of any Person (other than any wholly owned Subsidiary of the Company);

make or agree to make any capital expenditures exceeding $500,000 in the aggregate;

make or change any material Tax election or adopt or change any material method of Tax accounting; (ii) file any material amended Tax Return; (iii) settle or compromise any audit, assessment or other proceeding relating to a material amount of Taxes; (iv) agree to an extension or waiver of the statute of limitations with respect to material Taxes; (v) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) with respect to any material Tax; (vi) surrender any right to claim a material Tax refund; (vii) enter into any Tax sharing, indemnification or allocation agreement (other than any such agreement entered into in the ordinary course of business the principal purpose of which is not Taxes); or (viii) take or permit any action or engage in any transaction outside the ordinary course of business from the date of this Agreement through the Closing Date which could give rise to a material U.S. income inclusion under Section 951 of the Code;

materially amend, materially modify, enter into or terminate any labor, collective bargaining, works council or similar agreement regarding the employees of any Acquired Company;

negotiate, amend, extend, renew, terminate or enter into, or agree to any amendment or modification of, or waive, release or assign any rights under, any material contract, any contract that would have been a Material Contract or a Lease had it been entered into prior to the date of this Agreement or any Lease for any Leased Real Property, except in the case of any Contract of the type described in
 
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Section 4.10(a)(ii) of the merger agreement, in the ordinary course of business consistent with past practice; provided, however, that the foregoing exception shall not apply to any Contract that requires or provides for consent, acceleration, termination or any other material right or consequence triggered in whole or in part by the merger or any of the other transactions; or

authorize, commit or agree to do, or enter into any contract to do, or announce an intention to do, any of the foregoing actions.
Proxy Statement, Board Recommendation and Company Stockholders’ Meeting
The Company has agreed to, as promptly as practicable following the date of the merger agreement, establish a record date for, duly call, give notice of, convene and hold a stockholders’ meeting, which is the special meeting that is the subject of this proxy statement, to consider and vote upon the adoption of the merger agreement proposal. The Company will hold the special meeting as promptly as practicable after the SEC confirms that it has no further comments on this proxy statement.
Notwithstanding anything to the contrary, the Company has agreed not to postpone or adjourn the special meeting without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), provided that if the Company reasonably determines in good faith that the Company stockholder approval is unlikely to be obtained at the special meeting, including due to an absence of quorum, then, prior to the vote contemplated having been taken, the Company will have the right to require an adjournment or postponement of the special meeting for the purpose of soliciting additional votes in favor of the merger agreement. In the event of any such adjournment or postponement of the special meeting, the Company will not postpone or adjourn such meeting to a date that is more than thirty calendar days from the prior-scheduled date.
Notwithstanding the foregoing, the Company may, after consultation with Parent, postpone or adjourn the special meeting if the Company is required to postpone or adjourn the special meeting by applicable law in order to give Company stockholders sufficient time to evaluate any information or disclosure that the Company has sent or otherwise made available to such holders by issuing a press release, filing materials with the SEC or otherwise (including in connection with any change of recommendation). In the event of any such adjournment or postponement of the special meeting, the Company will not postpone or adjourn such meeting to a date that is more than thirty calendar days after the date for which special meeting was originally scheduled.
Except in the circumstances described in this proxy statement under “The Merger Agreement — No Solicitation; Change in Recommendation,” the Company Board has agreed to recommend to Company stockholders that they vote to adopt the merger agreement and include such recommendation in this proxy statement (the “Company Board Recommendation”).
Non-Solicitation Covenant
Subject to certain exceptions, the Company has agreed that it, the Company Board (including any committee thereof) and the Company’s officers will not, and the Company will cause its subsidiaries not to, and the Company will cause its and their other respective representatives not to, directly or indirectly:

solicit, initiate, seek, facilitate or knowingly encourage, or knowingly induce or take any other action designed or intended to lead to, or that would reasonably be expected to lead to any inquiry with respect to, or the making, submission or announcement of an acquisition proposal or acquisition inquiry (each, as defined below); or

enter into, continue, engage in, or participate in any discussions or negotiations regarding or furnish or cause to furnish to any person any information relating to the Company or any of its subsidiaries in each case, in connection with, an acquisition proposal or acquisition inquiry, other than to state that the Company and its representatives are prohibited from engaging in any discussions or negotiations.
The Company also agreed to immediately cease any and all existing solicitation, encouragement, activities, communications, discussions or negotiations with any persons with respect to any inquiry, proposal or offer that relates to a possible acquisition proposal or acquisition inquiry. In addition, the Company also agreed
 
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to (i) use reasonable best efforts to request that each person in possession of confidential information about the Company, its subsidiaries, or their respective businesses or operations promptly destroy or return to the Company confidential information furnished to such person or any of its representatives; (ii) to the extent it has a right to do so, demand the destruction or return of all confidential information within 24 hours of the date of the merger agreement to the extent such confidential information relates to a possible acquisition proposal or acquisition inquiry; and (iii) terminate access to any physical or electronic data rooms relating to a possible acquisition proposal or acquisition inquiry by any such person and its representatives.
In addition, the Company agreed that it and its subsidiaries will enforce, and not waive, terminate or modify any confidentiality, standstill or similar provision in any confidentiality, standstill or other similar agreement; provided, that, if the Company Board determines in good faith after consultation with the Company’s outside legal counsel that the failure to waive a particular standstill provision would be reasonably likely to be a breach of the directors’ fiduciary duties under applicable law, the Company may waive such standstill provision, or other provision with similar effect, solely to the extent necessary to permit the applicable person to make, on a confidential basis to the Company Board, an acquisition proposal, conditioned upon such person agreeing to disclosure of such acquisition proposal to Parent.
Notwithstanding the restrictions described above, if at any time prior to obtaining the approval and adoption of the merger agreement by the Company’s stockholders, the Company receives an acquisition proposal that did not result from a breach of the non-solicitation covenant which the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors (i) constitutes a superior proposal (as defined below) or is reasonably expected to lead to a superior proposal or (ii) that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law, then the Company may:

furnish information concerning the Company’s business, properties or assets to the person making such acquisition proposal (and its representatives), if, and only if, prior to so furnishing any information, the Company receives from such person an executed acceptable confidentiality agreement and the Company also provides Parent a copy of such acceptable confidentiality agreement promptly after its execution; and

engage in discussions or negotiations with such person (including such person’s representatives) with respect to the acquisition proposal.
The Company has agreed to promptly, and in any event within 24 hours, notify Parent of any receipt by any director or officer of the Company or by any of its subsidiaries, or its or their respective representatives, of any acquisition proposal, acquisition inquiry, or any proposals, offers, or inquiries received by, any requests for information from, or any discussions or negotiations sought to be initiated or continued with, the Company, any of its subsidiaries or any of its or its Subsidiaries’ representatives concerning an acquisition proposal or acquisition inquiry. The Company will also keep Parent reasonably informed on a prompt and timely basis, and in any event within 24 hours of any significant development, discussions or negotiations, of the status and details (including amendments and proposed amendments) of any such acquisition proposal or acquisition inquiry.
For purposes of the merger agreement, “acquisition inquiry” means an inquiry, indication of interest or request for information from any person (other than Parent or any of its affiliates), whether or not in writing, relating to, or that is or would reasonably be expected to lead to or result in an acquisition proposal.
For purposes of the merger agreement, “acquisition proposal” means any proposal or offer (whether or not in writing) from any third party (or group of related third parties) relating to, or that is or would reasonably be expected to lead to (in one transaction or a series of transactions), any (a) sale, issuance or other disposition to, or acquisition of, twenty percent or more (on a non-diluted basis) of any class of capital stock or other equity interests in the Company (by vote or by value) by any third party (or group of related third parties), (b) merger, consolidation, business combination, reorganization, share exchange, sale of assets, lease, license, disposition, recapitalization, equity investment, joint venture, liquidation, dissolution or other transaction involving the Company or any subsidiary of the Company, pursuant to which or that would result in any third party (or group of related third parties) acquiring or beneficially owning or controlling, directly or indirectly, (i) assets (including capital stock of or interest in any subsidiary or affiliate of the Company) representing, directly or indirectly, twenty percent or more of the net revenues, net
 
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income or consolidated assets of the Company and its subsidiaries, taken as a whole or (ii) twenty percent or more (on a non-diluted basis) of any class of equity or voting securities of the Company or any resulting parent company of the Company, (c) acquisition (whether by merger, consolidation, equity investment, share exchange, joint venture or otherwise) by any third party (or group of related third parties), directly or indirectly, of any class of equity interest in any entity that holds assets representing, directly or indirectly, twenty percent or more of the net revenues, net income or consolidated assets of the Company or its subsidiaries, taken as a whole,(d) tender offer, exchange offer or any other transaction or series of transactions that, if consummated, would result in any third party (or group of related third parties), directly or indirectly, beneficially owning or having the right to acquire beneficial ownership of twenty percent or more of capital stock or other voting securities (or voting power) of the Company (or instruments convertible to or exchangeable for twenty percent or more of such outstanding shares or securities (or voting power)), in each case, on a non-diluted basis, (e) merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction hold less than eighty percent of the equity interests in the surviving or resulting entity of such transaction or (f) any combination of the foregoing.
For purposes of the merger agreement, “superior proposal” means a bona fide, written acquisition proposal (with references in the definition thereof 20% being deemed to be replaced with references to 50%) made after the date of the merger agreement, by a third party, which the Company Board determines in good faith after consultation with the Company’s outside legal and financial advisors, taking into account at the time of determination all relevant circumstances, including all of the terms and conditions and all financial, legal, regulatory and other aspects of such acquisition proposal that the Company Board deems relevant or appropriate that, taking into account, if applicable, any changes to the terms of the merger agreement proposed by Parent in writing pursuant to the non-solicitation covenant and breakup fee provision, is (a) reasonably likely to be consummated if accepted and (b) is more favorable to the Company stockholders from a financial point of view than the merger.
Changes in Board Recommendation
Except as provided in the paragraphs below, under the terms of the merger agreement, the Company has agreed that it, the Company Board and officers will not, and the Company will cause the its subsidiaries not to, and the Company will cause its and their other respective representatives not to, directly or indirectly:

approve, authorize, declare advisable, endorse or recommend, any acquisition proposal or acquisition inquiry;

withdraw, modify or qualify, or otherwise publicly propose to withdraw, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation;

if an acquisition proposal or acquisition inquiry has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after Parent’s written request that the Company or the Company Board do so and reaffirm the Company Board Recommendation within such 10 business day period ,

fail to include the Company Board Recommendation in this proxy statement; or

adopt or approve, or propose to adopt or approve the Company or any of its subsidiaries to enter into, any merger agreement, acquisition agreement, letter of intent, memorandum of understanding,, option agreement, joint venture agreement, partnership agreement or similar agreement or document relating to, or any other agreement, arrangement or commitment providing for, any acquisition proposal or acquisition inquiry (other than an acceptable confidentiality agreement entered into in accordance with the non-solicitation covenant) (an “alternative acquisition agreement”).
Notwithstanding anything to the contrary in the non-solicitation covenants, at any time prior to obtaining Company stockholder approval, the Company Board may:

make a change of recommendation in response to an Intervening Event (as defined below) if the Company Board has determined in good faith after consultation with the Company’s outside legal
 
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counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law; or

make a change of recommendation or cause the Company to terminate the merger agreement in order to enter into a definitive agreement providing for an acquisition proposal (that did not result from a material breach of the non-solicitation covenants and that the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors is a superior proposal), but only if, in each case, the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law.
However, notwithstanding anything to the contrary, neither the Company nor any of its subsidiaries will enter into any alternative acquisition agreement unless the merger agreement has been validly terminated in accordance with certain termination provisions described therein.
Prior to the Company taking any action permitted under:

clause (a) above, the Company will provide Parent with four business days’ prior written notice advising Parent that it intends to effect a change of recommendation and specifying, in reasonable detail, the reasons therefor, and during such four business day period, the Company will cause its representatives to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the merger agreement in a manner that would obviate the need to effect a change of recommendation and at the end of such four business day period the Company Board again makes all of the required determinations under clause (a) above (after in good faith taking into account any amendments proposed by Parent); or

clause (b) above, the Company will provide Parent with four business days’ prior written notice advising Parent that the Company Board intends to take such action and specifying the terms and conditions of the acquisition proposal, including a copy of any proposed definitive documentation, and during such four business day period, the Company will cause its representatives to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the merger agreement such that such acquisition proposal would no longer constitute a superior proposal and at the end of such four business day period the Company Board again makes all of the required determinations under clause (b) above (after in good faith taking into account the amendments proposed by Parent).
With respect to clauses (i) and (ii) above, if there are any material amendments, revisions or changes to the terms of any such superior proposal (including any revision to the amount or form of consideration the Company stockholders would receive as a result of the superior proposal or a change to any conditions) or any material change to the facts and circumstances of any Intervening Event, the Company will comply again with clauses (i) and (ii) above, as applicable, with references to the applicable four business day period being replaced by two business days.
For purposes of the merger agreement, “Intervening Event” means any effect, change, event, occurrence, circumstance, development, condition, or fact that does not relate to any acquisition inquiry, acquisition proposal or superior proposal) that was not known to the Company Board on the date of the merger agreement (or if known, the consequences of which were not known or not reasonably foreseeable to the Company Board as of the date of the merger agreement).
Agreements to Use Reasonable Best Efforts
Subject to the terms and conditions of the merger agreement, the Company, Parent and Merger Sub will use their reasonable best efforts to take, or cause to be taken, all actions or steps and to do, or cause to be done, all things necessary under applicable law to consummate the merger as promptly as practicable, including (i) preparing and filing or otherwise providing, in consultation with each other, all documentation to effect all necessary consents, clearances, approvals, registrations, filings, and other documents and to obtain all waiting period expirations or terminations, consents, clearances, registrations, approvals, permits, and authorizations necessary to be obtained from any third party and/or any governmental entity in order to consummate the merger and (ii) taking all steps as may be necessary, subject to certain limitations described
 
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below, to obtain all such waiting period expirations or terminations, consents, clearances, registrations, permits, authorizations and approvals.
Notwithstanding anything to the contrary set forth in the merger agreement, the obligations of Parent include:

the defense through litigation on the merits of any claim asserted in any court, agency or other proceeding by any person (including any governmental entity) seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation of the merger;

agreeing or committing to sell, divest, license or otherwise convey any asset or business of Parent, the Company and their respective subsidiaries subsequent to the effective time;

agreeing or committing to license, hold separate or enter into similar arrangements with respect to its respective assets or the assets of the Company or conduct of business arrangements or terminating, modifying, transferring, assigning, restructuring, or waiving any and all existing relationships and contractual rights and obligations as a condition to obtaining any and all expirations of waiting periods under the HSR Act or consents from any governmental entity necessary, to consummate the transactions contemplated hereby; and

agreeing not to acquire any rights, assets, business, or division thereof (through acquisition, license, joint venture, collaboration or otherwise), if such acquisition would reasonably be expected to materially increase the risk of not obtaining any applicable clearance, consent, approval or waiver under any applicable antitrust laws with respect to the merger.
In furtherance and not in limitation of the foregoing, the Company, Parent and Merger Sub have agreed to (i) make any appropriate filings, registrations and submissions pursuant to the HSR Act with respect to the merger within 10 business days after the execution of the merger agreement, and to promptly supply any additional information that any governmental entity reasonably requests in connection with the merger that may be requested under any antitrust laws and, subject to the merger agreement, to take all other actions necessary to cause the expiration or termination of the applicable waiting periods or obtain consents under such antitrust laws.
In addition, each of the Company and Parent has agreed, in connection with and without limiting the efforts referenced above to obtain all waiting period expirations or terminations, consents, clearances, registrations, approvals, permits, and authorizations for the merger under the HSR Act or any other antitrust law, to:

cooperate with each other in connection with any filing or submission and in connection with any investigation, inquiry, litigation, action, or legal proceeding that seeks, or would reasonably be expected to seek to prevent the consummation of the merger, including any proceeding initiated by a private party, including by (i) cooperating with each other and using their respective reasonable best efforts to contest any such litigation, action or proceeding and (ii) allowing the other party to have a reasonable opportunity to review in advance and comment on drafts of filings, submissions, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal and consider in good faith comments of the other party, as applicable;

promptly inform the other party of any communication received by such party from, or given by such party to, any governmental entity, by promptly providing copies to the other party of any such written communications, and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the merger; and

permit the other party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with any governmental entity, or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by such governmental entity, other person or applicable law, give the other party the opportunity to attend and participate in any meetings, telephone calls or videoconferences with such governmental entity or other person.
However, the materials required to be provided pursuant to the foregoing clauses (i)-(iii) may be redacted to restrict communications containing confidential business information to outside counsel only
 
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consistent with customary practice and neither Parent nor the Company shall have any obligation to share personal identifier information.
Employee Benefits Matters
For a period of not less than 9 months after the effective time of the merger, Parent has agreed to provide to each employee of the Company or any of its subsidiaries who continues to be employed by Parent or the surviving company or any subsidiary thereof (the “continuing employees”), (i) base salary or hourly wages, as applicable, that are at least equal for such continuing employee immediately prior to the effective time; and (ii) cash bonus, target cash incentive compensation opportunities and other benefits (including, without limitation, employee health, welfare, retirement and severance benefits (other than defined benefit pension, deferred compensation, equity or phantom equity, or retiree medical benefits)), in the aggregate, that are substantially similar to those provided tosuch continuing employee immediately prior to the effective time. Notwithstanding the foregoing, Parent has agreed to pay all employees who immediately prior to the effective time, participate in the Company’s performance-based bonus program for the fiscal year ending December 31, 2022 the respective amounts of bonuses that such employees would have received in accordance with the terms of the program in effect immediately prior to the effective time, regardless of whether such employees are employed by Parent or any of its subsidiaries at any time after the effective time unless such employee voluntarily terminates his or her employment with Parent or its subsidiaries as applicable.
For all purposes (including purposes of vesting, eligibility to participate and benefit accrual) under the employee benefit plans of Parent and its subsidiaries providing benefits to any continuing employees after the effective time (the “New Plans”), Parent has agreed to provide full credit due to each such continuing employee with the Company and its subsidiaries and their respective predecessors before the effective time, subject to certain exceptions. In addition, and without limiting the generality of the foregoing, Parent or its applicable subsidiary will (i) waive any eligibility waiting periods, any evidence of insurability requirements and the application of any pre-existing condition limitations under any New Plans, and (ii) cause each continuing employee to be given credit under any New Plan for all amounts paid by such continuing employee under any Company benefit plan in which such continuing employee participated immediately before the effective time (such plans, collectively, the “Old Plans”) for the plan year that includes the effective time for purposes of applying deductibles, co-payments and out-of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the New Plans for the plan year in which the effective time occurs.
Directors’ and Officers’ Indemnification and Insurance
For six years after the effective time, Parent and the surviving company will provide all directors and officers of the Company and its subsidiaries (collectively, the “indemnified parties”) all rights to indemnification and exculpation (including advancement of expenses and for acts and omissions occurring at or prior to the effective time) existing in favor of the indemnified parties at or prior to the effective time as provided in (i) each applicable indemnification agreement in effect on the date of the merger agreement and (ii) the Company’s certificate of incorporation or bylaws as in effect on the date of the merger agreement. The Company, Parent and Merger Sub have agreed that the foregoing rights to indemnification and advancement will also apply with respect to any action pending or asserted or any claim made for indemnification occurring or alleged to have occurred at or prior to the effective time, whether asserted or claimed prior to, at or after the effective time, now existing in favor of the indemnified parties as provided in their respective certificate of incorporation or bylaws or in any indemnification agreement in existence on the date of the merger agreement and made available to Parent will survive the merger and will continue until the disposition of such action or resolution of such claim.
In addition, Parent has agreed to maintain officers’ and directors’ liability insurance for six years following the effective time, in respect of matters arising prior to the effective time, covering each such individual currently covered by the Company’s officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable in the aggregate than those of such policy in effect on the date of the merger agreement’s execution provided, however, that Parent will not commit or spend on such insurance policy, in the aggregate, more than 300% of the last aggregate annual premium paid by the
 
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Company prior to the date if the merger agreement for the Company’s current policies of directors’ and officers’ liability insurance and fiduciary liability insurance (the “base amount”), and if the cost of such insurance policy would otherwise exceed the base amount, Parent shall maintain an insurance policy that, in its good faith judgment, provides as much coverage as reasonably practicable at an annual premium equal to 300% of the Company’s current premium. However, in lieu of maintaining officers’ and directors’ liability insurance, the Company or Parent may obtain a six year prepaid “tail” policy providing such individuals currently covered by the Company’s directors’ and officers’ liability insurance with coverage for claims arising before the effective time; provided, however, that the cost of such prepaid “tail” policy does not exceed the base amount.
Financing
Parent and Merger Sub have represented and warranted that they have as of the date of the merger agreement, and will have available at the effective time, all funds necessary to consummate the transactions contemplated by the merger agreement and make all cash payments contemplated to be made under the merger agreement in connection with the merger and the other transactions contemplated thereby. The obligations of Parent and Merger Sub under the merger agreement are not subject to any financing condition.
The Company and Parent have also agreed, if requested by the Company, to use their respective commercially reasonable efforts to negotiate and enter into a credit facility or other interim financing arrangement in an amount to be mutually agreed by Parent and the Company and otherwise on customary market terms as Parent and the Company shall mutually agree upon.
Other Covenants
The merger agreement contains other covenants relating to access to information and confidentiality, takeover statutes, publicity, obligations of Merger Sub, dispositions of the Company equity securities under Section 16(a) of the Exchange Act, stockholder litigation, affirmation that the Company certifying that the Company is not, and has not been a “United States real property holding corporation” for purposes of Sections 897 and 1445 of the Internal Revenue Code of 1986, stock exchange delisting and deregistration, director resignations and the repayment and termination of the Company’s existing credit agreements and redemption of its outstanding notes.
Conditions to Completion of the Merger
The obligations of the Company, Parent and Merger Sub to effect the merger are subject to the satisfaction (or waiver, to the extent permitted by applicable law) on or prior to the closing date of each of the following conditions:

adoption of the merger agreement by the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote at the special meeting;

the absence of a law, order or injunction restraining, preventing, enjoining or otherwise prohibiting the consummation of the merger ; and

the expiration or termination of the waiting period under the HSR Act and the authorization or consent from any governmental entity required to be obtained with respect to the merger under any other applicable antitrust laws.
The obligations of the Company to effect the merger are also subject to the fulfillment of the following conditions:

the representations and warranties of Parent and Merger Sub relating to due organization, good standing and brokers contained in the merger agreement (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) shall be true and correct in all material respects both as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct in all material respects as of such specified date);
 
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the representations and warranties of Parent and Merger Sub relating to authority, the binding nature of the merger agreement, the non-contravention of Parent and Merger Sub’s organizational documents, and the proxy statement in the merger agreement shall be true and correct in all respects both as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct as of such specified date);
the other representations and warranties of Parent and Merger Sub contained in the merger agreement (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) shall be true and correct both as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent material adverse effect;

the performance and compliance by Parent and Merger Sub in all material respects with all obligations required by the merger agreement to be performed or complied with by them at or prior to the effective time; and

the delivery by Parent to the Company of a certificate, dated the closing date and signed by an executive officer of Parent, certifying that the conditions set forth in the four most immediate bullets above have been satisfied.
The obligations of Parent and Merger Sub to effect the merger are also subject to the fulfillment of the following conditions:

the representations and warranties of the Company regarding certain matters relating to the Company’s due organization, good standing, organizational documents, capitalization, and brokers (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) shall be true and correct in all material respects both as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct as of such specified date);

the representations and warranties of the Company regarding certain matters relating to the Company’s capitalization, authority, the binding nature of the merger agreement, the non-contravention of Parent and Merger Sub’s organizational documents, the absence of certain changes and events since December 31, 2021, real property and anti-takeover statutes must be true and correct in all respects (except in the case of capitalization, other than for de minimis inaccuracies) as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct as of such specified date);

the other representations and warranties of the Company contained in the merger agreement (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) must be true and correct as of the date of the merger agreement and as of the effective time as if made at and as of such time (except to the extent expressly made as of a specified date, in which case shall be so true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company material adverse effect;

the performance and compliance by the Company in all material respects with all obligations required by the merger agreement to be performed or complied with by the Company at or prior to the closing;

the absence of a Company Material Adverse Effect since the date of the merger agreement; and

the delivery by the Company to Parent of a certificate, dated the closing date and signed by its chief executive officer or chief financial officer, certifying that the conditions set forth in the five most immediate bullets above have been satisfied.
 
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Termination of the Merger Agreement
Mutual Termination Right
The merger agreement may be terminated and abandoned at any time prior to the effective time by the mutual written consent of the Company and Parent.
Termination Rights Exercisable by Either the Company or Parent
The merger agreement may also be terminated prior to the effective time by either the Company or Parent if:

at any time after 5:00 p.m., New York City time, on April 15, 2023 (the “end date”) if the merger shall not have occurred on or before the end date; provided, however, that the right to terminate the merger agreement shall not be available to any party (or any affiliate of such party) whose failure to perform or comply with any of its covenants or agreements set forth in the merger agreement has been the principal cause of, or principally resulted in, the failure of the merger to have occurred on or before the end date;

a governmental entity of competent jurisdiction has issued a final and non-appealable order that has the effect of preventing, making illegal or otherwise prohibiting the consummation of the merger, provided, however, that the right to terminate the merger agreement shall not be available to any party (or any affiliate of such party) whose failure to perform or comply with any of its covenants or agreements set forth in the merger agreement has been the principal cause of, or principally resulted in the issuance, promulgation, enforcement or entry of any such order,; or

the special meeting (including any adjournments or postponements thereof) has concluded and the Company stockholder approval has not been obtained.
Company Termination Rights
The Company may also terminate the merger agreement prior to the effective time if:

the Company is not then in material breach of its obligations under the merger agreement and (A) Parent and/or Merger Sub has breached, failed to perform or violated their respective covenants or agreements under the merger agreement or (B) there is a breach of any of the representations and warranties of Parent or Merger Sub, and in either case of clauses (A) or (B) where such breach, failure to perform, violation or inaccuracy (I) would result in the failure of any of the conditions related to the representations and warranties and performance obligations of Parent and Merger Sub under the merger agreement to be satisfied and (II) (X) is not capable of being cured by the earlier of the end date or twenty business days following the date the Company gave Parent and/or Merger Sub written notice of such breach or failure to perform, or, (Y) if capable of being cured and Parent and/or Merger Sub is continuing to use its commercially reasonable efforts to cure such breach or failure to perform, and is then not cured before the earlier of the end date or twenty business days following the date the Company gave Parent written notice of such breach or failure to perform; or

prior to obtaining the Company stockholder approval, in order to enter into a definitive agreement providing for a superior proposal; provided that (i) the Company has complied in all material respects with the non-solicitation covenants and (ii) immediately prior to or substantially concurrently with (and as a condition to) the termination of the merger agreement, the Company pays to Parent a termination fee of $8.4 million;
Parent Termination Rights
Parent may also terminate the merger agreement prior to the effective time:

if neither Parent nor Merger Sub is then in material breach of its respective obligations under the merger agreement and (A) the Company has breached, failed to perform or violated its covenants or agreements under the merger agreement or (B) there is a breach of any of the representations and warranties of the Company, in either case of clauses (A) or (B) where such breach, failure to perform,
 
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violation or inaccuracy (I) would result in the failure of any of the conditions related to the representation and warranties and performance obligations of the Company under the merger agreement to be satisfied and (II) (X) is not capable of being cured by the earlier of the end date or twenty business days following the date Parent gave the Company written notice of such breach or failure to perform, or, (Y) if capable of being cured and the Company is continuing to use its commercially reasonable efforts to cure such breach or failure to perform, and is then not cured before the earlier of the end date or twenty business days following the date Parent gave the Company written notice of such breach or failure to perform; or

if, prior to obtaining the Company stockholder approval, a change of recommendation has occurred.
Termination Fee Payable by the Company
The Company will be required to pay Parent a termination fee equal to $8.4 million (the “Company termination fee”) if the merger agreement is terminated in the following circumstances:

(A) Parent terminates the merger agreement due to the Company’s breach of, or a failure to perform or comply with, the Company’s obligations under the merger agreement, (B) after the date of the merger agreement and prior to such termination, an acquisition proposal or acquisition inquiry is publicly disclosed and not publicly withdrawn prior to such termination, and (C) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into by the Company;
(A) the Company or Parent terminates the merger agreement in the event that the Company stockholder approval has not been obtained, (B) after the date of the merger agreement and prior to such termination, an acquisition proposal or acquisition inquiry is publicly disclosed and not publicly withdrawn at least three business days prior to the special meeting, and (C) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into by the Company;
(A) the Company or Parent terminates the merger agreement because the end date has been reached, (B) after the date of the merger agreement and prior to such termination, an acquisition proposal or acquisition inquiry is publicly disclosed and not publicly withdrawn prior to such termination, and (C) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into by the Company;

prior to obtaining the Company stockholder approval, Parent terminates the merger agreement because a change of recommendation has occurred prior to obtaining the Company stockholder approval; or

prior to obtaining the Company stockholder approval, the Company terminates the merger agreement in order to enter into a definitive agreement providing for a superior proposal.
In no event will the Company be obligated to pay the Company termination fee on more than one occasion.
Effect of Termination
If the merger agreement is terminated by the Company or Parent in accordance with its terms, the merger agreement will become null and void and there will be no liability on the part of the Company, Parent or Merger Sub; provided, that, (i) certain sections of the merger agreement regarding access to the Company, the Company termination fee, and miscellaneous provisions shall survive the termination of the merger agreement and (ii) nothing in the merger agreement will relieve any party from liability for fraud or intentional breach of the merger agreement prior to such termination in which case the aggrieved party shall be entitled to all rights and remedies available at law or in equity, including specific performance and the right to pursue damages (which may include damages based on the loss of the benefit of the merger to the Company and the lost stockholder premium).
 
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Fees and Expenses
Except as otherwise provided in the merger agreement, all costs and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring such costs or expenses, provided, that Parent will pay all filing fees payable for filings required or otherwise made pursuant to the HSR Act or any other antitrust law.
Amendments, Waivers
Subject to applicable law and except as otherwise provided in the merger agreement, any provision in the merger agreement may be (i) amended, modified and supplemented by written agreement of each of the parties (or their respective boards of directors, if required) or (ii) waived by the party against whom the waiver is to be effective (or its board of directors, if required); provided, however, after the Company stockholder approval has been obtained, there will not be any amendment that by applicable law or the rules of any stock exchange requires further approval by the stockholders without such further approval of such stockholders nor any amendment or change not permitted by applicable law.
Support Agreement
Concurrently with the execution of the merger agreement, Parent entered into a Support Agreement (the “support agreement”) with certain stockholders (the “supporting stockholders”) of the Company collectively beneficially owning approximately 10% of the outstanding shares of Company common stock, pursuant to which each such stockholder agreed, among other things, to vote (1) in favor of adopting the merger agreement and the consummation of the merger and (2) against other proposals to acquire the Company. The supporting stockholders have also granted Parent an irrevocable proxy to vote the supporting stockholder’s shares of Company common stock in connection with the Merger. Under the support agreement, the supporting stockholders are also prohibited from (1) except with respect to certain circumstances, transferring their shares of Company common stock prior to the record date of the Company’s shareholder meeting and (2) soliciting any acquisition proposals or having any discussions or negotiations with any third party, or entering into any agreement, whether written or otherwise, with any third party regarding any acquisition proposals. The support agreement terminates in certain circumstances, including in connection with (i) the Company Board’s determination to change its recommendation with respect to the transactions and (ii) any modification or amendment to, or the waiver of any provision of, the merger agreement as in effect on the date of the support agreement or the offer that is effected, in either case, without the written consent of the stockholders of the Company party to the support agreement, that decreases the amount, or changes the form or terms of consideration payable for the shares of Company common stock pursuant to the merger agreement or adversely affects the rights of any stockholder of the Company party to the support agreement.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ADOPTION AND APPROVAL OF THE MERGER AGREEMENT.
 
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information concerning the beneficial ownership of the shares of our common stock as of September 26, 2022, by (1) each person known to us to beneficially own more than 5% of the outstanding shares of our common stock, (2) each of our named executive officers and directors and (3) all of our directors and executive officers as a group. Unless indicated otherwise below, ownership information is as of the date of this proxy statement, and the applicable percentages are based on 57,331,357 shares outstanding.
Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder. Shares of common stock subject to options and other equity awards that are exercisable or have vested or will become exercisable or vest within 60 days of the date of this proxy statement are considered outstanding and beneficially owned by the person holding the options or other equity awards for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless indicated below, the address of each individual listed below is c/o Hill International, Inc., One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA 19103.
Shares of common stock
beneficially owned
Name of Beneficial Owner
Shares of
common
stock
Percentage of
Total Outstanding
Common Stock
(%)
5% Stockholder
Arnaud Ajdler and Engine Capital Management
5,799,621(1) 10.1%
Global Infrastructure Solutions Inc.
5,799,621(2) 10.1%
Beryl Capital Management LLC
5,700,000(3) 10.0%
Wellington Management Company LLP
4,485,050(4) 7.9%
David L. Richter and Richter Capital LLC
2,904,105(5) 5.1%
Rutabaga Capital Management
2,890,714(6) 5.1%
Directors and Named Executive Officers
Raouf S. Ghali
1,513,495(7) 2.6%
Abdo E. Kardous
152,940 *
Todd Weintraub
181,568(8) *
David Sgro
565,044(9) *
Paul J. Evans
466,379(10) *
Grant G. McCullagh
163,200(11) *
James B. Renacci
165,632(12) *
Sue Steele
143,724(13) *
All current directors and executive officers as a group (9 persons)
3,537,999 5.9%
*
Represents less than one percent.
(1)
Includes an aggregate of 5,555,256 shares held by Engine Airflow Capital, L.P. (“Engine Airflow”), Engine Capital, L.P. (“Engine Capital”), and Engine Jet Capital, L.P. (“Engine Jet”). Mr. Ajdler is the managing partner of Engine Capital Management, LP (“Engine Management”) and the managing member of each of Engine Capital Management GP, LLC (“Engine GP”), Engine Investments, LLC (“Engine Investments”) and Engine Investments II, LLC (“Engine Investments II”). Engine Management is the investment manager of each of Engine Airflow, Engine Capital and Engine Jet. Engine GP is
 
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the general partner of Engine Management; Engine Investments is the general partner of each of Engine Capital and Engine Jet; and Engine Investments II is the general partner of Engine Airflow. Engine Airflow owns 465,064 shares, Engine Capital owns 2,889,054 shares, and Engine Jet owns 2,201,138 shares of the Company’s common stock. Mr. Ajdler disclaims beneficial ownership in such securities except to the extent of his pecuniary interest therein. The beneficial ownership information is based upon Forms 4 filed by Mr. Ajdler with the SEC, Schedules 13D/A filed by Mr. Ajdler and Engine Management on August 18, 2022 and August 30, 2022, and other information available to the Company. The address for Mr. Ajdler and Engine Management is 1345 Avenue of the Americas, 33rd Floor, New York, NY 10105. Effective September 25, 2022, Mr. Ajdler resigned from the Company Board.
(2)
GISI, Hill International Credit Co. LLC, a Delaware limited liability company and a direct wholly owned subsidiary of GISI (“HICC”), GISI International Services LLC, a Delaware limited liability company and a direct wholly owned subsidiary of HICC (“GIS International”), and Merger Sub may be deemed to have beneficial ownership of 5,799,621 shares of common stock as a result of certain provisions contained in the Support Agreement. GISI, HICC, GIS International, and Merger Sub expressly disclaim such beneficial ownership. The beneficial ownership information is based upon Schedule 13D filed by GISI with the SEC on September 2, 2022 and other information available to the Company. The address for GISI, HICC, GIS International, and Merger Sub is 660 Newport Center Drive, Suite 940, Newport Beach, CA 92660, Attention: Deborah Butera, General Counsel.
(3)
Information is based on a Schedule 13G filed by Beryl Capital Management LLC, Beryl Capital Management LP, Beryl Capital Partners II LP and David A. Witkin (collectively, the “Beryl Group”) with the SEC on August 29, 2022 (the “Beryl Group 13G”). According to the Beryl Group 13G, Beryl Capital Management LLC, Beryl Capital Management LP and David A. Witkin has shared voting power and shared dispositive power with respect to 5,700,000 shares, and Beryl Capital Partners II LP has shared voting power and shared dispositive power with respect to 5,013,089 shares. According to the Beryl Group 13G, each person in the Beryl Group disclaims beneficial ownership in such shares except to the extent of such person’s pecuniary interest therein. The address for the Beryl Group is 225 Avenue I, Suite 205, Redondo Beach, CA 90277.
(4)
Information is based on a Schedule 13G filed by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP (collectively, the “Welling Group Entities”) with the SEC on February 4, 2022 (the “Wellington Group 13G”). According to the Wellington Group 13G, Wellington Management Group LLP is an investment advisor and each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings is a parent holding company or control person. The Wellington Group 13G states that each of the Wellington Group Entities has shared voting power and shared dispositive power with respect to 4,485,050 shares. According to the Wellington Group 13G, such shares are owned of record by clients of Wellington Management Company LLP and such clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such shares. Further, the Wellington Group 13G states that, of such clients, only Wellington Trust Company, National Association Multiple Common Trust Funds Trust, Micro Cap Equity Portfolio and Wellington Trust Company, NA have such right or power with respect to more than 5% of the shares. Based on a Schedule 13G/A filed by Wellington Trust Company, National Association Multiple Common Trust Funds Trust, Micro Cap Equity Portfolio with the SEC on February 4, 2022, Wellington Trust Company, National Association Multiple Common Trust Funds Trust, Micro Cap Equity Portfolio has shared voting power and shared dispositive power with respect to 3,872,932 shares. Based on a Schedule 13G filed by Wellington Trust Company, NA with the SEC on February 4, 2022, Wellington Trust Company, NA has shared voting power and shared dispositive power with respect to 4,485,050 shares. The address for the Wellington Group Entities is 280 Congress Street, Boston, MA 02210.
(5)
Based upon information available to the Company.
(6)
Information is based solely upon the Schedule 13G/A filed by Rutabaga Capital Management with the SEC on February 8, 2022 (the “Rutabaga 13G/A”). According to the Rutabaga 13G/A, Rutabaga Capital Management has sole voting power and sole dispositive power with respect to 2,890,714 shares. The address for Rutabaga Capital Management is 64 Broad Street, 3rd Floor, Boston, MA 02109.
 
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(7)
Includes (i) 1,000,000 shares issuable upon the exercise of options held by Mr. Ghali, all of which have vested with respect to such options, (ii) 63,830 shares issuable upon settlement of deferred stock units held by Mr. Ghali that have vested and (iii) 20,942 shares held in the Company’s 401(k) Plan.
(8)
Includes 20,658 shares issuable upon settlement of deferred stock units held by Mr. Weintraub that have vested.
(9)
Includes (i) 260,066 shares issuable upon the settlement of deferred stock units held by Mr. Sgro and (ii) 360,150 shares held by Jamarant Capital, L.P., of which Mr. Sgro is a Managing Member. Mr. Sgro disclaims beneficial ownership of the shares held by Jamarant Capital, L.P. Information is based solely upon a Form 4 filed with the SEC on July 12, 2022.
(10)
Includes 466,379 shares issuable upon the settlement of deferred stock units held by Mr. Evans. Information is based solely upon a Form 4 filed by Mr. Evans with the SEC on July 12, 2022.
(11)
Includes 163,200 shares issuable upon settlement of deferred stock units held by Mr. McCullagh. Information is based solely upon a Form 4 filed by Mr. McCullagh with the SEC on July 12, 2022.
(12)
Includes 165,632 shares of common stock to be issued upon settlement of deferred stock units held by Mr. Renacci. Information is based solely upon a Form 4 filed by Mr. Renacci with the SEC on July 12, 2022.
(13)
Includes 143,724 shares of common stock to be issued upon settlement of deferred stock units held by Ms. Steele. Information is based solely upon a Form 4 filed by Ms. Steele with the SEC on July 12, 2022.
 
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NON-BINDING NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL (PROPOSAL 2)
Pursuant to Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, the Company is required to submit a proposal to approve a resolution, on a non-binding advisory basis, approving the payment of specified compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger. This proposal, commonly known as “say-on-golden parachutes” ​(the “non-binding named executive officer merger-related compensation proposal”), gives the Company’s stockholders the opportunity to vote, on an advisory and non-binding basis, on the compensation that the named executive officers may be entitled to receive that is based on or otherwise relates to the merger. This compensation is summarized in the table and the footnotes thereto under “The Merger —  Interests of the Company’s Directors and Executive Officers in the Merger — Named Executive Officer Merger-Related Compensation” beginning on page 50 of this proxy statement.
The Company Board encourages you to review carefully the named executive officer merger-related compensation information disclosed in this proxy statement.
The Company Board unanimously recommends that the Company’s stockholders approve the following resolution:
RESOLVED, that the stockholders of Hill International, Inc. hereby approve, on a non-binding, advisory basis, the compensation to be paid or become payable to its named executive officers that is based on or otherwise relates to the merger as disclosed in the Company’s proxy statement pursuant to Item 402(t) of Regulation S-K under the section titled “Named Executive Officer Merger-Related Compensation.”
The vote on the non-binding named executive officer merger-related compensation proposal is a vote separate and apart from the vote on the merger agreement proposal. Accordingly, you may vote to approve the merger agreement proposal and vote not to approve the non-binding named executive officer merger-related compensation proposal and vice versa. Because the vote on the non-binding named executive officer merger-related compensation proposal is advisory only, it will not be binding on either the Company or Parent. Accordingly, if the merger agreement proposal is approved and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of the Company stockholders.
The above proposal approving, on an advisory and non-binding basis, the payment of specified compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger will require the affirmative vote of the holders of shares of common stock represented in person or by proxy having a majority of the votes entitled to vote thereon at the special meeting. A vote to abstain will have the same effect as voting against the non-binding named executive officer merger-related compensation proposal. If you fail to attend the special meeting and vote in person or fail to vote by proxy, or if you hold your shares of common stock through a brokerage firm, bank or other nominee and fail to give voting instructions to your brokerage firm, bank or other nominee, it will have no effect on the non-binding named executive officer merger-related compensation proposal.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE NON-BINDING NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL.
 
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ADJOURNMENT PROPOSAL (PROPOSAL 3)
The Company stockholders are also being asked to consider and vote on the adjournment proposal. The Company is seeking stockholder approval of the adjournment of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to adopt and approve the merger agreement. Approval of the adjournment proposal will require the affirmative vote of the holders of shares of common stock represented in person or by proxy having a majority of the votes entitled to vote thereon at the special meeting. If you fail to attend the special meeting and vote via written ballot or fail to vote by proxy, or if you hold your shares of common stock through a brokerage firm, bank or other nominee and fail to give voting instructions to your brokerage firm, bank or other nominee, it will have no effect on the adjournment proposal. Votes to abstain will have the same effect as a vote against the adjournment proposal.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.
 
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FUTURE STOCKHOLDER PROPOSALS
If the merger is completed, we will have no public stockholders and there will be no public participation in any future meetings of Company stockholders. However, if the merger is not consummated, Company stockholders will continue to be entitled to attend and participate in Company stockholders’ meetings.
As described in our annual proxy statement for the 2022 annual meeting of stockholders filed on June 1, 2022, to be considered for inclusion in the 2023 annual meeting, stockholder proposals must meet the requirements of SEC Rule 14a-8 and must be received no later than April 7, 2023. After such date, any shareholder proposal will be considered untimely and may be excluded from consideration at the meeting. Our Amended and Restated Bylaws provide that a stockholder may otherwise propose business for consideration or nominate persons for election to the Board, in compliance with federal proxy rules, applicable state law and other legal requirements and without seeking to have the proposal or nomination included in our proxy statement. If our 2023 annual meeting is held no more than 30 days prior to and no later than 70 days after the anniversary date of our 2022 annual meeting, our Amended and Restated Bylaws currently require that notice of such proposals or nominations for our 2023 annual meeting be received by us during the period from March 8, 2023 to April 7, 2023. Any such notice must satisfy the other requirements in our Amended and Restated Bylaws applicable to such proposals and nominations.
Stockholders must deliver the proposals to William H. Dengler, Jr., Corporate Secretary, Hill International, Inc., One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA 19103.
 
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OTHER MATTERS
As of the date of this proxy statement, the Company Board knows of no matters that will be presented for consideration at the special meeting other than as described in this proxy statement.
APPRAISAL RIGHTS
If the merger is consummated, a holder of the common stock who does not vote in favor of the merger agreement proposal and who properly exercises and perfects his, her or its demand for appraisal of its shares of common stock will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL (“Section 262”).
The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement as Annex C and incorporated herein by reference. The following summary does not constitute any legal or other advice and does not constitute a recommendation that a holder of the common stock exercise its appraisal rights under Section 262. Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A person having a beneficial interest in shares of common stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.
Under Section 262, a holder of shares of common stock who (1) does not vote in favor of the merger agreement proposal; (2) continuously is the record holder of such shares through the effective time; and (3) otherwise follows the procedures set forth in Section 262 will be entitled to have its shares appraised by the Delaware Court of Chancery and to receive, in lieu of the merger consideration, payment in cash of the amount determined by the Delaware Court of Chancery to be “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Delaware Court of Chancery (subject, in the case of interest payments, to any voluntary cash payments made by the surviving company pursuant to subsection (h) of Section 262).
Under Section 262, where a merger agreement is to be submitted for adoption and approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes the Company’s notice to holders of the common stock that appraisal rights are available in connection with the merger, and the full text of Section 262 is attached to this proxy statement as Annex C. In connection with the merger, any holder of shares of common stock who wishes to exercise appraisal rights, or who wishes to preserve such holder’s right to do so, should review Annex C carefully and consult with legal advisors. Failure to strictly comply with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL. A holder of common stock who loses his, her or its appraisal rights will be entitled to receive the merger consideration described in the merger agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, a stockholder considering exercising such rights should seek the advice of legal counsel. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings as to all holders of shares of a class of stock who assert appraisal rights unless (x) the total number of such shares for which appraisal rights have been pursued and perfected exceeds 1% of the outstanding shares of the class of stock entitled to appraisal, measured in accordance with subsection (g) of Section 262 or (y) the value of the merger consideration in respect of the such total number of shares for which appraisal rights have been pursued and perfected exceeds $1 million.
Stockholders wishing to exercise the right to seek an appraisal of their shares of Company common stock must fully comply with Section 262, which means doing, among other things, ALL of the following:

the stockholder must not vote in favor of the merger agreement proposal;
 
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the stockholder must deliver to the Company a written demand for appraisal before the vote on the merger agreement proposal at the special meeting;

the stockholder must continuously hold the shares from the date of making the demand through the effective time (a stockholder will lose appraisal rights if the stockholder transfers the shares before the effective time); and

a stockholder or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the effective time. The surviving company is under no obligation to file any petition and has no intention of doing so.
Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement proposal, a stockholder who votes by proxy and who wishes to exercise appraisal rights should not return a blank proxy, but rather must vote against the merger agreement proposal, or abstain or not vote its shares.
Filing Written Demand
Any holder of shares of common stock wishing to exercise appraisal rights must deliver to the Company, before the vote on the merger agreement proposal at the special meeting at which the merger agreement proposal will be submitted to the stockholders, a written demand for the appraisal of the stockholder’s shares of common stock, and that stockholder must not vote or submit a proxy in favor of the merger agreement proposal. A holder of shares of common stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement proposal, and it will cause a stockholder to lose the stockholder’s right to appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the merger agreement proposal or abstain from voting on the merger agreement proposal. Neither voting against the merger agreement proposal nor abstaining from voting or failing to vote on the merger agreement proposal will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the merger agreement proposal. A stockholder’s failure to make the written demand prior to the taking of the vote on the merger agreement proposal at the special meeting will cause the stockholder to lose its appraisal rights in connection with the merger.
Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A demand for appraisal in respect of shares of common stock should be executed by or on behalf of the holder of record, and must reasonably inform the Company of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares in connection with the merger. If the shares of common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, such as in a joint tenancy or a tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.
A STOCKHOLDER WHO HOLDS ITS SHARES IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISHES TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH ITS BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.
 
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All written demands for appraisal pursuant to Section 262 should be mailed or delivered to:
Hill International, Inc.
One Commerce Square
2005 Market Street, 17th Floor
Philadelphia, Pennsylvania 19103
Attn: Corporate Secretary
Any holder of shares of common stock may withdraw his, her or its demand for appraisal and accept the merger consideration by delivering to the Company a written withdrawal of the demand for appraisal within 60 days after the effective time. However, any such attempt to withdraw the demand made more than 60 days after the effective time will require written approval of the surviving company. No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just.
Notice by the Surviving Company
If the merger is consummated, within 10 days after the effective time, the surviving company will notify each holder of shares of common stock who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favor of the merger agreement proposal, that the merger has become effective and the effective date thereof.
Filing a Petition for Appraisal
Within 120 days after the effective time, but not thereafter, the surviving company or any holder of shares of common stock who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the surviving company in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares of common stock held by all stockholders entitled to appraisal. The surviving company is under no obligation, and has no present intention, to file a petition, and holders should not assume that the surviving company will file a petition or initiate any negotiations with respect to the fair value of the shares of common stock. Accordingly, any holder of shares of common stock who desires to have its shares appraised by the Delaware Court of Chancery should initiate all necessary action to perfect its appraisal rights in respect of its shares of common stock within the time and in the manner prescribed in Section 262. The failure of a holder of common stock to file such a petition for appraisal within the period specified in Section 262 could nullify the stockholder’s previous written demand for appraisal.
Within 120 days after the effective time, any holder of shares of common stock who has complied with the requirements for the exercise of appraisal rights will be entitled, upon request given in writing, to receive from the surviving company a statement setting forth the aggregate number of shares not voted in favor of the adoption and approval of the merger agreement and with respect to which the Company has received demands for appraisal, and the aggregate number of holders of such shares. The surviving company must mail this statement to the requesting stockholder within 10 days after receipt of the request for such a statement or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares of common stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the surviving company the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.
If a petition for an appraisal is duly filed by a holder of shares of common stock and a copy thereof is served upon the surviving company, the surviving company will then be obligated within 20 days after such service to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder.
 
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The Delaware Court of Chancery may require the stockholders who demanded appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss that stockholder from the proceedings. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings as to all holders of shares of a class of stock who assert appraisal rights unless (x) the total number of such shares for which appraisal rights have been pursued and perfected exceeds 1% of the outstanding shares of the class of stock entitled to appraisal, measured in accordance with subsection (g) of Section 262 or (y) the value of the merger consideration in respect of the such total number of shares for which appraisal rights have been pursued and perfected exceeds $1 million.
Determination of Fair Value
After determining the holders of common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. Unless the court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the appraisal proceeding, the surviving company may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided in the preceding sentence only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of shares as determined by the Delaware Court of Chancery and (2) interest theretofore accrued, unless paid at that time. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”
A stockholder considering seeking appraisal should be aware that the fair value of its shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration it would receive pursuant to the merger if it did not seek appraisal of its shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262. Although the Company believes that the merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the merger consideration. Neither the Company nor Parent anticipates offering more than the merger consideration to any stockholder exercising appraisal rights, and each of the Company and Parent reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of common stock is less than the merger consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the
 
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expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.
If any stockholder who demands appraisal of his, her or its shares of common stock under Section 262 fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, the stockholder’s shares of common stock will be deemed to have been converted at the effective time into the right to receive the merger consideration. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if, among other things, no petition for appraisal is filed within 120 days after the effective time or if the stockholder delivers to the surviving company a written withdrawal of the holder’s demand for appraisal and an acceptance of the merger consideration in accordance with Section 262.
From and after the effective time, no stockholder who has demanded appraisal rights will be entitled to vote such shares of common stock for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder’s shares of common stock, if any, payable to stockholders of record as of a time prior to the effective time. If no petition for an appraisal is filed, or if the stockholder delivers to the surviving company a written withdrawal of the demand for an appraisal and an acceptance of the merger, either within 60 days after the effective time or thereafter with the written approval of surviving company, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder who commenced the proceeding or joined that proceeding as a named party without the approval of the court. Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.
DELISTING AND DEREGISTRATION OF COMPANY CAPITAL STOCK
If the merger is consummated, the Company common stock will be delisted from the NYSE and deregistered under the Exchange Act and we will no longer file periodic reports with the SEC on account of the Company common stock.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and current reports, proxy statements and any amendments or supplements thereto and other information with the SEC. The Company’s public filings are available to the public free of charge on the website maintained by the SEC at http://www.sec.gov and on the Company’s website at https://www.hillintl.com/, and may also be obtained through other document retrieval services. Information contained on our website or connected thereto does not constitute a part of this proxy statement.
The SEC allows the Company to “incorporate by reference” information into this proxy statement. This means that the Company can disclose important information by referring to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this proxy statement. This proxy statement may update and supersede the information incorporated by reference. Similarly, the information that the Company later files with the SEC may update and supersede the information in this proxy statement. Statements contained in this proxy statement, or in any document incorporated in this proxy statement by reference, regarding the contents of any contract or other document, are not necessarily complete and each such statement is qualified in its entirety by reference to the complete text of that contract or other document filed as an exhibit with the SEC.
The Company also incorporates by reference into this proxy statement the following documents filed by it with the SEC under the Exchange Act:

the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed March 31, 2022 and Amendment No. 1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed May 2, 2022;

the Company’s Quarterly Reports on Form 10-Q, filed on May 10, 2022 (for the quarter ended March 31, 2022) and filed on August 9, 2022 (for the quarter ended June 30, 2022);
 
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the portions of the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on June 1, 2022, that are incorporated by reference in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021; and

the Company’s Current Reports on Form 8-K filed on April 6, 2022, July 12, 2022, August 17, 2022 and August 27, 2022 (other than any disclosure or exhibit deemed to be furnished but not filed in such Current Reports on Form 8-K).
The Company will furnish without charge a copy of the Company’s annual, quarterly and current reports, including any financial statements and schedules thereto, to any person, including any beneficial owner of the common stock, to whom this proxy statement is delivered, upon written request directed to the Company. Requests should be addressed to: Hill International, Inc., One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA, 19103, Attention: Investor Relations.
The information contained in this proxy statement speaks only as of the date indicated on the cover of this proxy statement unless the information specifically indicates that another date applies.
No persons have been authorized to give any information or to make any representations other than those contained, or incorporated by reference, in this proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any other person.
 
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ANNEX A
EXECUTION VERSION
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
by and among
GLOBAL INFRASTRUCTURE SOLUTIONS INC.,
LIBERTY ACQUISITION SUB INC.
AND
HILL INTERNATIONAL, INC.
Dated as of August 26, 2022
 

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