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Form DEFM14A ENCORE WIRE CORP

May 22, 2024 8:01 AM EDT
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 under §240.14a-12
ENCORE WIRE CORPORATION
(Name of Registrant as Specified In Its Charter)
N/A
(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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1329 Millwood Road
McKinney, Texas 75069
May 22, 2024
Dear Stockholder:
You are cordially invited to attend a special meeting of stockholders (the “Special Meeting”) of Encore Wire Corporation (“Encore,” the “Company” or “we”) to be held on Wednesday, June 26, 2024, at 9:00 a.m., Central Time online at https://www.virtualshareholdermeeting.com/WIRE2024SM.
At the Special Meeting, you will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of April 14, 2024 (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Encore, Prysmian S.p.A., a company organized under the laws of the Republic of Italy (“Parent”), Applause Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and solely as provided in Section 9.12 therein, Prysmian Cables and Systems USA, LLC, a Delaware limited liability company, pursuant to which Merger Sub will merge with and into Encore (the “Merger”), with Encore surviving the Merger and becoming a wholly owned subsidiary of Parent (the “Merger Agreement Proposal”). You will also be asked to consider and vote on (i) a non-binding, advisory proposal to approve compensation that will or may become payable by Encore to its named executive officers in connection with the Merger (the “Compensation Proposal”) and (ii) a proposal to approve one or more adjournments of the Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal to adopt the Merger Agreement (the “Adjournment Proposal”).
If the Merger contemplated by the Merger Agreement is completed, you will be entitled to receive for each share of Encore common stock, par value $0.01 per share (“Encore common stock”) that you own immediately prior to the effective time of the Merger, without interest, $290.00 in cash, plus, if the Merger is not consummated by April 14, 2025, an additional $0.0635 per share of Encore common stock per day beginning on April 15, 2025, up to, but excluding, the date the Merger is consummated, subject to any required tax withholding (unless you have properly and validly exercised and do not withdraw your appraisal rights under Section 262 of the General Corporation Law of the State of Delaware).
On April 14, 2024, the board of directors of Encore (the “Board”) reviewed and considered the terms and conditions of the Merger Agreement and the Merger and the other transactions contemplated by the Merger Agreement. After considering various factors, including those described in the accompanying Proxy Statement (the “Proxy Statement”), and after consultation with the Company’s independent legal and financial advisors, the Board unanimously (i) determined that the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of Encore and its stockholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) authorized and approved the execution, delivery and performance of the Merger Agreement by Encore and (iv) recommended the adoption of the Merger Agreement by the holders of Encore common stock (“Encore stockholders”) and directed that the Merger Agreement be submitted for adoption by Encore stockholders at a meeting of the Encore stockholders.
The Board recommends that you vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Compensation Proposal and (iii) “FOR” the Adjournment Proposal.
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The enclosed Proxy Statement provides detailed information about the Special Meeting, the Merger Agreement, the Merger, the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal. A copy of the Merger Agreement is attached as Annex A to the Proxy Statement. The Proxy Statement also describes the actions and determinations of the Board in connection with its evaluation of the Merger Agreement and the Merger. You are encouraged to read the Proxy Statement and its annexes, including the Merger Agreement, carefully and in their entirety. You may also obtain more information about Encore from documents we file with the United States Securities and Exchange Commission (the “SEC”) from time to time.
We appreciate you taking the time to vote promptly and encourage you to do so electronically. After reading the Proxy Statement, please vote at your earliest convenience by voting over the Internet using the Internet address on the proxy card or by voting by telephone using the toll-free number on the proxy card. If you do not have access to a touch-tone phone or the Internet, you may alternatively vote by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope. Only your last-dated proxy will be counted, and any proxy may be revoked at any time prior to its exercise at the Special Meeting.
If your shares of Encore common stock are registered directly in your name, you are considered the stockholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares. However, you are still considered to be the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares. Because the proposals are “non-routine matters,” your broker, bank, trust or other nominee does not have discretionary authority to vote your shares on the proposals. If your shares of Encore common stock are held in street name, your broker, bank, trust or other nominee has enclosed a voting instruction form with the Proxy Statement. If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting. We encourage you to authorize your broker, bank, trust or other nominee to vote your shares “FOR” each of the proposals by following the instructions provided on the enclosed voting instruction form to provide your instructions over the Internet, by telephone or by signing, dating and returning the voting instruction form in the postage-paid envelope provided. We encourage you to vote electronically.
Your vote is very important, regardless of the number of shares that you own. We cannot consummate the Merger unless the Merger Agreement Proposal is approved by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock because the Merger Agreement makes the approval by the Encore stockholders of the Merger Agreement Proposal a condition to the parties’ obligations to consummate the Merger. The failure of any Encore stockholder of record to either (i) grant a proxy electronically over the Internet, by telephone or by submitting a signed proxy card or (ii) attend the Special Meeting will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. Additionally, such failure will cause the stockholder’s shares to not be counted for purposes of determining whether a quorum is present for the transaction of business at the Special Meeting (assuming such stockholder of record has not granted a proxy electronically over the Internet or by telephone, submitted a signed proxy card or voted by virtual ballot at the Special Meeting on any proposal). Abstentions will have the same effect as votes “AGAINST” the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal and will be counted as present for purposes of determining whether a quorum is present. Because each of the proposals presented to stockholders will be considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
The Special Meeting will be held virtually, and you will be able to attend the meeting and vote via the Internet at https://www.virtualshareholdermeeting.com/WIRE2024SM by using the 16-digit control number included in your proxy materials. You will not be able to attend the Special Meeting in person.

If you have any questions about the Proxy Statement, the Special Meeting, the Merger Agreement or the Merger or need assistance with voting procedures, please contact D.F. King & Co., Inc., our proxy solicitor, by calling (888) 887-1266 (stockholders) or (212) 269-5550 (banks and brokers).
On behalf of the Board, I thank you for your support and appreciate your consideration of these matters.
Sincerely,
/s/ Daniel L. Jones
Daniel L. Jones
Chairman, President and Chief Executive Officer
Encore Wire Corporation
Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this document or the Proxy Statement, including the Merger, or determined if the information contained in this document or the Proxy Statement is accurate or adequate. Any representation to the contrary is a criminal offense.
The Proxy Statement is dated May 22, 2024 and, together with the enclosed form of proxy card, is first being mailed to Encore stockholders on or about May 22, 2024.

 
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1329 Millwood Road
McKinney, Texas 75069
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
YOUR VOTE IS VERY IMPORTANT.
PLEASE VOTE YOUR SHARES PROMPTLY.
You are cordially invited to attend a special meeting of stockholders (the “Special Meeting”) of Encore Wire Corporation (“Encore” or the “Company”) to be held on Wednesday, June 26, 2024, at 9:00 a.m., Central Time online at https://www.virtualshareholdermeeting.com/WIRE2024SM.
The Special Meeting will be held for the following purposes:
1.
to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of April 14, 2024, by and among Encore, Prysmian S.p.A., a company organized under the laws of the Republic of Italy (“Parent”), Applause Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and solely as provided in Section 9.12 therein, Prysmian Cables and Systems USA, LLC, a Delaware limited liability company (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), a copy of which is attached as Annex A to the proxy statement (the “Proxy Statement”) accompanying this notice and pursuant to which Merger Sub will merge with and into Encore (the “Merger”), with Encore surviving the Merger and becoming a wholly owned subsidiary of Parent (the “Merger Agreement Proposal”);
2.
to consider and vote on a non-binding, advisory proposal to approve compensation that will or may become payable by Encore to its named executive officers in connection with the Merger (the “Compensation Proposal”); and
3.
to consider and vote on a proposal to approve one or more adjournments of the Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal to adopt the Merger Agreement (the “Adjournment Proposal”).
The affirmative vote of the holders of a majority of the outstanding shares of Encore common stock, par value $0.01 per share (“Encore common stock”), entitled to vote thereon is required to approve the Merger Agreement Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve, by means of a non-binding, advisory vote, the Compensation Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve the Adjournment Proposal. Abstentions will have the same effect as votes “AGAINST” the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal. The failure of any Encore stockholder of record to either (i) grant a proxy electronically over the Internet, by telephone or by submitting a signed proxy card or (ii) attend the Special Meeting will result in such stockholder’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. Because each of the proposals presented to the stockholders of the Company will be considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being
 

 
considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
Only Encore stockholders of record as of the close of business on May 17, 2024 are entitled to notice of the Special Meeting and to vote at the Special Meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the Special Meeting will be available in our principal executive offices located at 1329 Millwood Road, McKinney, Texas 75069, during regular business hours for a period of no less than ten days before the Special Meeting.
The Encore board of directors (the “Board”) recommends that you vote “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal. In considering the recommendation of the Board, Encore stockholders should be aware that the Company’s executive officers and members of the Board may have agreements and arrangements in place that provide them with interests in the Merger that may be different from, or in addition to, those of the holders of shares of Encore common stock generally. See the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of Encore in the Merger” beginning on page 56 of the Proxy Statement.
Your vote is important. Whether or not you expect to attend the Special Meeting, you are urged to complete, sign, date and return the enclosed proxy card, or to submit your vote by Internet or telephone, at your earliest convenience. If you hold your shares in “street name,” you should instruct your broker, bank, trust or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your broker, bank, trust or other nominee. Your broker, bank, trust or other nominee cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions. Instructions for voting your shares are included on the enclosed proxy card or the voting instruction form you will receive. If you are a record holder and you send in your proxy and then decide to attend the Special Meeting to vote your shares, you may still do so. You may revoke your proxy in the manner described in the Proxy Statement at any time before it has been voted at the Special Meeting.
Our Notice of Special Meeting and Proxy Statement are available at www.proxyvote.com. The Proxy Statement, as well as the Merger Agreement attached thereto, are hereby incorporated by reference in this Notice.
By order of the Board of Directors,
/s/ Bret J. Eckert
Bret J. Eckert
Secretary
Encore Wire Corporation
May 22, 2024
 

 
IMPORTANT
Your vote is extremely important. Whether or not you plan to virtually attend the Special Meeting and regardless of the number of shares you own, we urge you to vote promptly “FOR” each of the proposals.
If you have any questions about submitting your proxy card or otherwise require assistance, please contact:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Stockholders May Call: (888) 887-1266 (TOLL-FREE)
Banks and Brokers May Call Collect: (212) 269-5550
Email: [email protected]
 

 
TABLE OF CONTENTS
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SUMMARY
This summary highlights selected information from this proxy statement (this “Proxy Statement”) related to the merger (the “Merger”) of Applause Merger Sub Inc. (“Merger Sub”) with and into Encore Wire Corporation (“Encore” or the “Company”), with the Company surviving the Merger as a wholly owned subsidiary of Prysmian S.p.A. (“Parent”), and may not contain all of the information that is important to you. To understand the Merger more fully and for a more complete description of the legal terms of the Merger, you should read carefully this entire Proxy Statement, the annexes to this Proxy Statement and the documents we refer to in this Proxy Statement. You may obtain the information incorporated by reference in this Proxy Statement without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 119 of this Proxy Statement. The Merger Agreement (as defined below) is attached as Annex A to this Proxy Statement. You are encouraged to read the Merger Agreement, which is the legal document that governs the Merger.
Except as otherwise specifically noted in this Proxy Statement, “Encore,” the “Company,” “we,” “our,” “us” and similar words in this Proxy Statement refer to Encore Wire Corporation. Throughout this Proxy Statement we refer to Prysmian S.p.A. as “Parent,” Applause Merger Sub Inc. as “Merger Sub” and Prysmian Cables and Systems USA, LLC as “Guarantor.” In addition, throughout this Proxy Statement we refer to the Agreement and Plan of Merger, dated as of April 14, 2024, as it may be amended, supplemented or otherwise modified from time to time, by and among the Company, Parent and Merger Sub and, solely as provided in Section 9.12 therein, Guarantor, as the “Merger Agreement.”
The Special Meeting (page 27)
Date, Time and Place
The special meeting of the stockholders of Encore (“Encore stockholders”) (the “Special Meeting”) will be held on Wednesday, June 26, 2024, at 9:00 a.m., Central Time online at https://www.virtualshareholdermeeting.com/WIRE2024SM.
Record Date; Shares Entitled to Vote
You are entitled to vote at the Special Meeting if you owned shares of common stock of Encore, par value $0.01 per share (“Encore common stock”), at the close of business on May 17, 2024, the record date for the Special Meeting (the “Record Date”). You will have one vote at the Special Meeting for each share of Encore common stock you owned at the close of business on the Record Date.
Purpose
At the Special Meeting, we will ask Encore stockholders of record as of the Record Date to vote (i) to adopt the Merger Agreement (the “Merger Agreement Proposal”), (ii) to approve, by non-binding, advisory vote, compensation that will or may become payable by Encore to its named executive officers in connection with the Merger (the “Compensation Proposal”) and (iii) to approve one or more adjournments of the Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal to adopt the Merger Agreement (the “Adjournment Proposal” and, together with the Merger Agreement Proposal and the Compensation Proposal, the “Special Meeting Proposals”).
Quorum
As of the Record Date, there were 15,797,183 shares of Encore common stock outstanding and entitled to be voted at the Special Meeting. The holders of a majority of the issued and outstanding shares of Encore common stock entitled to vote at the Special Meeting, present in person or represented by proxy, constitutes a quorum. As a result, 7,898,592 shares of Encore common stock must be represented by proxy or by stockholders present and entitled to vote at the Special Meeting to have a quorum. Shares of Encore common stock are counted as present for purposes of determining a quorum if:
 
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the holders of such shares are present in person at the virtual Special Meeting; or

a proxy card has been properly submitted by mail, by telephone or over the Internet with respect to such shares.
If you submit your proxy card, regardless of whether you abstain from voting on one or more of the Special Meeting Proposals, your shares of Encore common stock will be counted as present at the Special Meeting for the purpose of determining a quorum. If your shares are held in “street name,” your shares of Encore common stock are counted as present for purposes of determining a quorum if your broker, bank, trust or other nominee submits a proxy covering your shares. If you hold your shares in “street name” and do not give any instruction to your broker, bank, trust or other nominee as to how your shares should be voted at the Special Meeting, those shares will not be voted on any Special Meeting Proposal and will not be counted for purposes of determining a quorum.
Required Vote
The affirmative vote of the holders of a majority of the outstanding shares of Encore common stock entitled to vote thereon is required to approve the Merger Agreement Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve, by means of a non-binding, advisory vote, the Compensation Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve the Adjournment Proposal. This means that the Merger Agreement Proposal will be approved if the number of shares voted “FOR” such proposal is greater than fifty percent (50%) of the total number of outstanding shares of Encore common stock entitled to vote on the Merger Agreement Proposal. Abstentions will have the same effect as votes “AGAINST” the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal. The failure of any Encore stockholder of record to either (i) grant a proxy electronically over the Internet, by telephone or by submitting a signed proxy card or (ii) attend the Special Meeting will result in such stockholder’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. Because each of the proposals presented to Encore stockholders will be considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
Share Ownership of Directors and Executive Officers of Encore
As of the Record Date, the directors and executive officers of Encore beneficially owned, and were entitled to vote, in the aggregate, 707,632 shares of Encore common stock representing approximately 4.48% of the outstanding shares of Encore common stock. The directors and executive officers of Encore have informed Encore that they currently intend to vote all of their shares of Encore common stock “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
How You Can Vote
If you are a stockholder of record of shares of Encore common stock, you may vote your shares in any of four ways:
1.
by submitting your proxy by voting over the Internet using the website indicated on the enclosed proxy card;
2.
by submitting your proxy by telephone using the toll-free number on the enclosed proxy card;
 
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by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided; or
4.
by attending the Special Meeting in a virtual format and voting by virtual ballot. To vote during the Special Meeting, you must do so by logging into https://www.virtualshareholdermeeting.com/WIRE2024SM using the 16-digit control number included in your proxy materials.
If your shares of Encore common stock are registered directly in your name, you are considered the stockholder of record with respect to those shares.
If your shares of Encore common stock are held in a stock brokerage account or by a bank or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares. However, you are still considered to be the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares. Because the proposals are “non-routine matters,” your broker, bank, trust or other nominee does not have discretionary authority to vote your shares on the Special Meeting Proposals. If your shares of Encore common stock are held in street name, your broker, bank, trust or other nominee has enclosed a voting instruction form with this Proxy Statement. If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting. We encourage you to authorize your broker, bank, trust or other nominee to vote your shares “FOR” each of the Special Meeting Proposals by following the instructions provided on the enclosed voting instruction form to provide your instructions over the Internet, by telephone or by signing, dating and returning the voting instruction form in the postage-paid envelope provided.
YOUR VOTE IS VERY IMPORTANT. We encourage all stockholders to vote electronically. Please submit your proxy via the Internet or by telephone by following the instructions on the enclosed proxy card. If you do not have access to a touch-tone phone or the Internet, you may alternatively vote by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided, even if you plan to attend the Special Meeting.
All shares entitled to vote and represented by properly submitted proxies (including those submitted via the Internet, by telephone and by mail) received at or prior to the Special Meeting, and not revoked or superseded, will be voted at the Special Meeting in accordance with the instructions indicated on those proxies. If no direction is indicated on a proxy card, such shares will be voted by the proxy holders named on the enclosed proxy card according to the recommendation of the board of directors of Encore (the “Board”) “FOR” each of the Special Meeting Proposals.
Parties Involved in the Merger (page 32)
Encore Wire Corporation
Encore Wire Corporation is a Delaware corporation, incorporated in 1989. The Company manufactures a broad range of electrical wire and cables, used to distribute power from the transmission grid to the wall outlet or switch. Encore’s diversified product portfolio and low-cost of production positions it exceptionally well to play a key role in the transition to a more sustainable and reliable energy infrastructure. Our products are proudly made in America at our vertically-integrated, single-site, Texas campus.
The Company sells its products through manufacturers’ representatives to wholesale electrical distributors servicing the residential, commercial, and industrial sectors.
Encore common stock is currently listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WIRE.”
 
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The Company’s principal executive office and manufacturing plants are located at 1329 Millwood Road, McKinney, Texas 75069. The Company’s telephone number is (972) 562-9473.
Prysmian S.p.A.
Prysmian S.p.A., which we refer to as “Parent,” is a company organized under the laws of the Republic of Italy, operates in the business of underground and submarine cables and systems for power transmission and distribution, of specialty cables for applications in many different industries and of medium and low voltage cables for the construction and infrastructure sectors. It produces voice, video and data transmission cables and accessories for the telecommunications industry, offering a comprehensive range of optical fibers, optical and copper cables and connectivity systems.
Parent’s ordinary shares are listed on the Borsa Italiana under the symbol “PRY.”
Parent’s principal executive office is located at Via Chiese 6, 20126 Milano, Italy.
Prysmian Cables and Systems USA, LLC
Prysmian Cables and Systems USA, LLC, which we refer to as “Guarantor,” is a Delaware limited liability company and a wholly owned subsidiary of Parent.
Applause Merger Sub Inc.
Applause Merger Sub Inc., which we refer to as “Merger Sub,” is a Delaware corporation and a wholly owned subsidiary of Parent and was formed on April 12, 2024, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, including the Merger, and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement. Upon completion of the Merger, Merger Sub will merge with and into Encore and will cease to exist.
Effects of the Merger (page 33)
The Merger Agreement provides that, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), at the Effective Time, Merger Sub will be merged with and into Encore, whereupon the separate corporate existence of Merger Sub will cease, and Encore will continue as the surviving corporation under the name “Encore Wire Corporation” ​(the “Surviving Corporation”). As a result of the Merger, the Surviving Corporation will become a wholly owned subsidiary of Parent and Encore common stock will no longer be publicly traded. In addition, Encore common stock will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in each case, in accordance with applicable laws, rules and regulations, and Encore will no longer file periodic reports with the United States Securities and Exchange Commission (the “SEC”) on account of Encore common stock. If the Merger is consummated, you will not own any shares of capital stock of the Surviving Corporation. The “Effective Time” will occur upon the filing of the certificate of merger (the “certificate of merger”) with the Secretary of State of the State of Delaware (or at such later time as Encore and Parent may mutually agree in writing and specify in the certificate of merger).
Merger Consideration (page 33)
Encore common stock
At the Effective Time, each share of Encore common stock outstanding immediately prior to the Effective Time (excluding (a) each share that is owned by Encore as treasury stock or otherwise, but excluding for the avoidance of doubt any shares of Encore common stock held by any Encore employee benefit plan or trust related thereto (other than, for the avoidance of doubt, shares of Encore common stock reserved for issuance under any of the Company Equity Plans (as such term is defined in the Merger Agreement)), or held by Parent or Merger Sub (or any direct or indirect parent of Merger Sub) immediately prior to the Effective Time, which will be cancelled and will cease to exist, (b) shares that are owned by any wholly
 
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owned subsidiary of Parent (other than Merger Sub or any direct or indirect parent of Merger Sub) immediately prior to the Effective Time, which will be converted into such number of shares of common stock of the Surviving Corporation so as to maintain relative ownership percentages and (c) shares that are issued and outstanding immediately prior to the Effective Time (other than the shares described in the foregoing clauses (a) and (b)) that are held by holders (or “beneficial owners” ​(as defined, for purposes of this section of this Proxy Statement, in Section 262(a) of the DGCL) of such shares) who have not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and are entitled to demand and properly demand appraisal of such shares pursuant to, and who have properly exercised and perfected their demands for appraisal rights under and comply in all respects with, Section 262 of the DGCL ((a), (b) and (c) collectively, the “Excluded Shares”)) will be converted automatically into the right to receive, without interest, $290.00 in cash (the “Base Consideration”), plus, if the Merger is not consummated by April 14, 2025, an additional $0.0635 per share of Encore common stock per day beginning on April 15, 2025, up to, but excluding, the date the Merger is consummated (the “Additional Consideration” and together with the Base Consideration, the “Merger Consideration”), subject to any required tax withholding.
After the Merger is completed, you will have the right to receive the Merger Consideration in respect of each share of Encore common stock that you own (other than any Excluded Shares) immediately prior to the Effective Time (subject to any required tax withholding), but you will no longer have any rights as a holder of Encore common stock (an “Encore stockholder”) (except that Encore stockholders who properly and validly exercise, perfect and do not withdraw their appraisal rights will not be entitled to receive the Merger Consideration and instead will have a right to receive payment of the “fair value” of their shares as determined pursuant to an appraisal proceeding, as contemplated by the DGCL. For more information, please see the section of this Proxy Statement entitled “Appraisal Rights” beginning on page 103 of this Proxy Statement).
Treatment of Encore Equity Awards
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each award of restricted stock units representing the right to be issued shares of Encore common stock or cash valued by reference to the value of shares of Encore common stock granted under the Company Equity Plans that is subject to time-based vesting restrictions (each such award, a “Company RSU Award”) (or portion thereof) granted prior to the date of the Merger Agreement that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company RSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company RSU Award (or portion thereof).
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each award of restricted stock units representing the right to be issued shares of Encore common stock or cash valued by reference to the value of shares of Encore common stock granted under the Company Equity Plans that is subject to performance-based vesting restrictions (each such award, a “Company PSU Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company PSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company PSU Award (or portion thereof). For purposes of clause (ii) of the immediately preceding sentence, the total number of shares of Encore common stock subject to a Company PSU Award will be determined in accordance with the applicable award terms; it being understood that if any portion of the Company PSU Award has been earned by its terms based on performance for completed performance periods as of the Effective Time, but has not yet become vested pursuant to any applicable time or service-based vesting requirements, the total number of shares
 
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of Encore common stock subject to such Company PSU Award will be based on the number of shares of Encore common stock actually earned based on performance for the completed performance periods.
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each award of options to purchase shares of Encore common stock granted under the Company Equity Plans (each such award, a “Company Option Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of such Company Option Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of Encore common stock subject to such Company Option Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each award of stock appreciation rights representing the right to receive cash valued by reference to the value of Encore common stock in excess of an applicable base or strike price granted under the Company Equity Plans (each such award, a “Company SAR Award”) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of such Company SAR Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration over the applicable base or strike price of such Company SAR Award, multiplied by (ii) the number of shares of Encore common stock referenced by such Company SAR Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the base or strike price of any Company SAR Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company SAR Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
Immediately prior to the Effective Time, all shares of Encore common stock that are then unvested and subject to an outstanding award of Encore common stock under the Company Equity Plans (each such award, a “Company Restricted Stock Award”) will become fully vested and free of any applicable repurchase or forfeiture conditions.
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company RSU Award (or portion thereof) granted on or after the date of the Merger Agreement that is outstanding immediately prior to the Effective Time (each such award, a “Post-Signing Company RSU Award”) will no longer represent a right to acquire shares of Encore common stock, will not accelerate in connection with the Merger, and will automatically become a cash-based award (a “Cash Award”) with respect to an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Post-Signing Company RSU Award immediately prior to the Effective Time. Each Cash Award will otherwise be subject to substantially the same terms and conditions applicable to the related Post-Signing Company RSU Award as of immediately prior to the Effective Time.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of Encore in the Merger” beginning on page 56 of this Proxy Statement.
Effect on Encore if the Merger is Not Consummated (page 33)
If the Merger Agreement is not adopted by the Encore stockholders, or if the Merger is not consummated for any other reason:

the Encore stockholders will not be entitled to, nor will they receive, any payment for their respective shares of Encore common stock pursuant to the Merger Agreement;
 
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Encore will remain an independent public company, the Encore common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and Encore will continue to file periodic reports with the SEC on account of the Encore common stock; and

under certain circumstances specified in the Merger Agreement, Encore may be required to pay Parent a termination fee (the “Company Termination Fee”) of up to $146.54 million upon the termination of the Merger Agreement. For more information, please see the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement —  Termination Fee Payable by Encore” beginning on page 93 of this Proxy Statement.
Recommendation and Reasons for the Merger (page 45)
On April 14, 2024, after considering various factors described in the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Recommendation and Reasons for the Merger” beginning on page 45 of this Proxy Statement, and after consultation with the Company’s independent legal and financial advisors, the Board unanimously (i) determined that the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of Encore and its stockholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) authorized and approved the execution, delivery and performance of the Merger Agreement by Encore and (iv) recommended the adoption of the Merger Agreement by the Encore stockholders and directed that the Merger Agreement be submitted for adoption by Encore stockholders at a meeting of the Encore stockholders.
The Board recommends that you vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Compensation Proposal and (iii) “FOR” the Adjournment Proposal.
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Opinion of J.P. Morgan Securities LLC (page 49)
In connection with the Merger, on April 14, 2024, J.P. Morgan Securities LLC (“J.P. Morgan”), Encore’s financial advisor, delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated April 14, 2024, to the effect that, as of April 14, 2024 and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the Base Consideration of  $290.00 per share of Encore common stock to be paid to Encore stockholders in the Merger was fair, from a financial point of view, to such holders.
The full text of the written opinion of J.P. Morgan, dated April 14, 2024, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with such opinion, is attached as Annex B. The summary of J.P. Morgan’s opinion contained in this Proxy Statement is qualified in its entirety by reference to the full text of the written opinion. Encore stockholders are urged to read the opinion in its entirety. J.P. Morgan provided advisory services and its opinion for the information and assistance of the Board in connection with its consideration of the Merger. J.P. Morgan did not express any opinion as to the fairness of any consideration to be paid in connection with the Merger to the holders of any other class of securities, creditors or other constituencies of Encore, or as to the underlying decision by Encore to engage in the Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. J.P. Morgan’s opinion is not a recommendation as to how any holder of Encore common stock should vote with respect to the approval of the Merger or any other matter. For a description of the opinion that the Board received from J.P. Morgan, see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Opinion of J.P. Morgan Securities LLC” beginning on page 49.
Interests of the Directors and Executive Officers of Encore in the Merger (page 56)
Encore’s directors and executive officers have certain interests in the Merger that are different from, or in addition to, those of Encore stockholders. See the section entitled “Proposal 1: Adoption of the Merger
 
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Agreement — The Merger — Interests of the Directors and Executive Officers of Encore in the Merger” beginning on page 56 of this Proxy Statement for additional information about interests that Encore’s directors and executive officers have in the Merger that are different than yours.
Financing of the Merger (page 60)
Each of Parent and Merger Sub has agreed to use their respective reasonable best efforts to consummate on a timely basis the Debt Financing (as defined in the Merger Agreement) as contemplated by the Debt Commitment Letters (as defined in the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Financing of the Merger” beginning on page 60 of this Proxy Statement) in effect on the date of the Merger Agreement (or in the event any portion or all of such Debt Financing becomes unavailable or otherwise undesirable, alternative financing). However, obtaining the Debt Financing is not a condition to the consummation of the Merger.
Guarantor has agreed to absolutely, unconditionally and irrevocably guarantee, as primary obligor and not as surety, to Encore the due and punctual payment and performance of each of the payment obligations of Parent and Merger Sub, as applicable under the Merger Agreement (the “Guaranteed Obligations”). The guaranty is one of payment and performance and not of collection. Guarantor’s obligations under the Merger Agreement are expressly limited to the Guaranteed Obligations and upon the full discharge and performance of all Guaranteed Obligations, Guarantor will no longer have any duties or obligations under the Merger Agreement. For more information, please see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Financing of the Merger” beginning on page 60 of this Proxy Statement.
Material U.S. Federal Income Tax Consequences of the Merger (page 61)
The receipt of cash by Encore stockholders in exchange for shares of Encore common stock 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 section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 61 of this Proxy Statement) that exchanges shares of Encore common stock for cash pursuant to the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares of Encore common stock surrendered in exchange therefor.
A Non-U.S. Holder (as defined in the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 61 of this Proxy Statement) generally will not be subject to U.S. federal income tax with respect to the exchange of its shares of Encore common stock for cash pursuant to the Merger unless such Non-U.S. Holder has certain connections with the United States.
For a general discussion of certain material U.S. federal income tax consequences of the Merger, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 61 of this Proxy Statement. That discussion does not address any non-income tax consequences, nor does it address any state, local or non-U.S. tax consequences or any tax consequences to holders that are subject to special treatment under the U.S. federal income tax laws. Encore stockholders should consult their own tax advisors concerning the tax consequences of the Merger to them in light of their particular circumstances and any consequences arising under U.S. federal tax laws or the laws of any state, local or non-U.S. taxing jurisdiction.
Regulatory Approvals Required for the Merger (page 64)
Pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and rules and regulations promulgated thereunder (the “HSR Act”), has expired or been terminated and any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties
 
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have agreed not to consummate the Merger and the other transactions contemplated by the Merger Agreement under the HSR Act have expired or have been terminated.
Additionally, pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the clearances and approvals requested by any governmental entity under certain specified laws have been obtained, or any waiting periods relating thereto have expired, in the event that an applicable governmental entity has requested such clearances or approvals be obtained or determined that such waiting periods apply to the Merger and the other transactions contemplated by the Merger Agreement.
Go-Shop Period (page 76)
Commencing on April 14, 2024 and continuing until 11:59 p.m. Central Time on May 19, 2024 (such period of time, the “Go-Shop Period,” and such latter date, the “No-Shop Period Start Date”), Encore and its Representatives (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Go-Shop Period”) had the right to, directly or indirectly, and subject to certain limitations, among other things: solicit and initiate any Alternative Proposals (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Go-Shop Period”), furnish non-public information relating to Encore to third parties, solely pursuant to an Acceptable Confidentiality Agreement (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Go-Shop Period”) so long as Parent had been or was given access to the same information, and otherwise cooperate with or assist any Alternative Proposal, including by granting a waiver under any “standstill provision” or similar obligation of third parties to allow such parties to submit or amend an Alternative Proposal on a confidential basis to the Board (or any committee thereof). Encore received no Alternative Proposals during the Go-Shop Period.
Non-Solicitation Covenant (page 77)
After the end of the Go-Shop Period (or, in the case of an Excluded Party (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Go-Shop Period”), the earlier of the date on which such third party is no longer an Excluded Party and fifteen days after the No-Shop Period Start Date), Encore has agreed that it will, and will use its reasonable best efforts to cause its Representatives to, (i) immediately cease and cause to be terminated any solicitation, discussions or negotiations with any person (other than Parent, Merger Sub and their Representatives) in connection with any Alternative Proposal (or any proposal that would reasonably be expected to result in an Alternative Proposal), (ii) terminate access to the virtual data room administered in connection with the transactions contemplated by the Merger Agreement by any person (other than Parent, Merger Sub and their Representatives, and Encore and its Representatives), and (iii) promptly request that any person that has executed a confidentiality agreement within the twelve-month period immediately preceding the No-Shop Period Start Date in connection with such person’s consideration of any Alternative Proposal (other than Parent, Merger Sub and their Representatives) return or destroy all confidential information regarding Encore. Encore received no Alternative Proposals prior to the No-Shop Period Start Date, and accordingly, there are no Excluded Parties.
Also after the end of the Go-Shop Period (other than with respect to Excluded Parties until the earlier of, with respect to each Excluded Party, the date on which such party is no longer an Excluded Party and fifteen days after the No-Shop Period Start Date), Encore has agreed that it will not, and will use its reasonable best efforts to cause its Representatives not to, directly or indirectly, among other things, (i) solicit or initiate any Alternative Proposal, (ii) engage in, continue or otherwise participate in any negotiations or discussions regarding any proposal that would reasonably be expected to result in an Alternative Proposal, (iii) furnish non-public information relating to Encore to third parties relating to any proposal that would reasonably be expected to result in an Alternative Proposal, (iv) take any action to exempt any person from the restrictions on “business combinations” contained in Section 203 of the DGCL or any other applicable state antitakeover statute or otherwise cause such restrictions not to apply to such person or (v) enter into any Alternative Acquisition Agreement (as defined in the section of
 
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this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Non-Solicitation Covenant”).
After the end of the Go-Shop Period, Encore has also agreed to enforce, and will not be permitted to waive, terminate, fail to enforce or otherwise modify any provision of any standstill, confidentiality or other similar agreement, unless the Board determines in good faith, after consultation with outside legal counsel, that failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law, in which case Encore may waive such agreement solely to the extent necessary to allow for an Alternative Proposal that has not been solicited in breach of the non-solicitation provisions of the Merger Agreement to be made to the Board in a confidential manner so long as Encore notifies Parent at the time the waiver is granted and notifies Parent of the receipt of any proposal within twenty-four hours.
Notwithstanding the foregoing restrictions, under certain specified circumstances, until the adoption of the Merger Agreement by Encore stockholders, Encore may, among other things, furnish information to, and engage in discussions or negotiations with, a person in respect of an unsolicited Alternative Proposal if, subject to complying with certain procedures, the Board determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Alternative Proposal constitutes, or would reasonably be expected to result in, a Superior Proposal (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Non-Solicitation Covenant”), and that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law.
Additionally, after the date of the Merger Agreement, Encore has agreed to, subject to certain requirements and procedures, promptly notify Parent of any proposal that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal received by Encore or its Representatives, and such notice must include a summary of the material terms and conditions of  (and the identity of the person making) such proposal and copies of any documents submitted therewith. Encore has also agreed to keep Parent reasonably informed on a prompt basis of any material developments with respect to any such proposal.
For more information, please see the sections of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Go-Shop Period,” and “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Non-Solicitation Covenant.
Company Board Recommendation Change (page 79)
Prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock and subject to certain requirements and procedures, the Board may change its recommendation regarding the adoption of the Merger Agreement by Encore stockholders, and/or, in certain specified circumstances, terminate the Merger Agreement, in response to an Alternative Proposal received by Encore after the date of the Merger Agreement that has not been subsequently withdrawn, which Alternative Proposal did not result from a material breach of the non-solicitation provisions of the Merger Agreement, and with respect to which the Board determines in good faith, after consultation with Encore’s financial advisors and outside legal counsel, that such Alternative Proposal constitutes a Superior Proposal and the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law.
The Board may also, prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock and subject to certain requirements and procedures, in response to an Intervening Event (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — The Board’s Recommendation; Change of Recommendation”) that is continuing, change its recommendation regarding the adoption of the Merger Agreement by Encore stockholders, if the Board determines in good faith, after consultation with Encore’s financial advisors and outside legal counsel, that failure to take such action in response to such Intervening Event would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — The Board’s Recommendation; Change of Recommendation.”
 
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Regulatory Approvals and Related Matters (page 88)
Pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the waiting period applicable to the Merger under the HSR Act has expired or been terminated and any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties have agreed not to consummate the Merger and the other transactions contemplated by the Merger Agreement under the HSR Act have expired or have been terminated.
Additionally, pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the clearances and approvals requested by any governmental entity under certain specified laws have been obtained, or any waiting periods relating thereto have expired, in the event that an applicable governmental entity has requested such clearances or approvals be obtained or determined that such waiting periods apply to the Merger and the other transactions contemplated by the Merger Agreement.
Each of Parent and Encore has agreed to cooperate with each other and use reasonable best efforts to take promptly, or cause to be taken promptly, all actions, including all things necessary, proper or advisable under applicable law, to consummate the Merger and the other transactions contemplated by the Merger Agreement, including, among other things, (i) obtaining all waivers, consents, clearances, approvals and expirations or terminations of waiting periods from governmental entities and making all necessary registrations and filings and taking all steps as may be necessary to obtain an approval, clearance, or waiver from, or to avoid an action or legal proceeding by, any governmental entity, (ii) obtaining all necessary consents, approvals or waivers from third parties (other than governmental entities) and (iii) defending any actions, lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or challenging, hindering, impeding, interfering with or delaying the consummation of the Merger and the other transactions contemplated by the Merger Agreement, including seeking to have any stay, temporary restraining order or injunction entered by any court or other governmental entity in connection with the foregoing vacated or reversed.
In addition, Parent and Encore have agreed to take certain Remedial Actions and Divestiture Actions (each as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Regulatory Approvals and Related Matters”) to resolve any objections or remove any impediments to the consummation of the Merger. Encore will not be, however, (i) required to or become subject to, or consent or agree to or otherwise take any Remedial Action or Divestiture Action, unless such action is applicable to Encore only from and after the Effective Time or (ii) permitted to offer or agree to or effectuate any Remedial Action or Divestiture Action without Parent’s prior written consent; provided, that if requested by Parent in writing, Encore will agree to any Remedial Action or Divestiture Action so long as such action is conditioned on the occurrence of the closing of the Merger (the “Closing”). Parent (or any of its subsidiaries) will not be required to (i) become subject to any Remedial Action if such Remedial Action would or would reasonably be expected to result in a material adverse effect on Parent and its subsidiaries (including Encore), taken as a whole after giving effect to the Merger and the other transactions contemplated by the Merger Agreement, (ii) become subject to, or consent or agree to or otherwise take any action with respect to any Remedial Action unless such action is applicable to Parent and its subsidiaries only from and after the Effective Time or (iii) propose, commit to, or otherwise be required to take any Divestiture Action.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Regulatory Approvals and Related Matters.”
Conditions to the Closing of the Merger (page 90)
The obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of customary conditions, including (among other conditions), the following:

the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock;
 
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the absence of  (i) any injunction or similar charge, order, writ, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative, by any governmental entity in the U.S. and (ii) any applicable U.S. federal, state or local or non-U.S. law (including common law), statute, code, treaty, convention, ordinance, rule, regulation, charge, order, writ, injunction, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative, in each case that remains in effect and, in any case, prohibits or makes illegal the consummation of the Merger;

(i) the expiration or termination of the waiting period applicable to the consummation of the Merger and the other transactions contemplated by the Merger Agreement under the HSR Act and the expiration or termination of any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties have agreed not to consummate the Merger or the other transactions contemplated by the Merger Agreement under the HSR Act and (ii) if applicable, the receipt of all required clearances, approvals and terminations of any waiting periods (as applicable) with respect to certain other specified laws;

since April 14, 2024, the absence of a Company Material Adverse Effect (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Representations and Warranties”);

the accuracy of the representations and warranties contained in the Merger Agreement (subject to certain materiality qualifiers); and

the compliance and performance by the parties, in all material respects, of their respective obligations and covenants required by the Merger Agreement to be performed or complied with by such party prior to the Effective Time.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Conditions to the Closing of the Merger.”
Termination of the Merger Agreement (page 92)
Parent and Encore have certain rights to terminate the Merger Agreement under customary circumstances, including, but not limited to, (i) by mutual agreement, (ii) if the Merger has not been consummated on or before 11:59 p.m. Central Time on April 14, 2025 (the “End Date,” which may be automatically extended to 11:59 p.m. Central Time on July 14, 2025 and 11:59 p.m. Central Time on October 14, 2025 under certain circumstances), (iii) if any governmental entity with competent jurisdiction over any of the parties in the U.S. has issued or enacted a final and nonappealable legal restraint that prohibits or makes illegal the consummation of the Merger, (iv) an uncured breach in any material respect of a party’s representations, warranties, covenants or other agreements contained in the Merger Agreement or (v) if Encore stockholders fail to adopt the Merger Agreement at the Special Meeting (or any adjournment or postponement thereof).
Termination Fee Payable by Encore (page 93)
Subject to certain exceptions, under specified circumstances, including in the event Encore terminates the Merger Agreement in connection with a Superior Proposal or Parent terminates the Merger Agreement in connection with the Board’s change in recommendation regarding the adoption of the Merger Agreement by Encore stockholders, Encore is required to pay Parent a termination fee equal to $146.54 million; provided, however, if either of the above terminations occurred in connection with an Excluded Party and subject to certain requirements, Encore would instead have been required to pay Parent a termination fee of  $73.27 million. As there are no Excluded Parties, this lower termination fee will not apply.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination Fee Payable by Encore.”
Termination Fee Payable By Parent (page 94)
Subject to certain exceptions, under specified circumstances, including if Encore or Parent terminate the Merger Agreement due to the existence of a legal restraint issued or granted in respect of the Merger
 
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or the other transactions contemplated by the Merger Agreement by a governmental entity in the U.S. pursuant to the HSR Act or any other applicable antitrust law, certain other specified laws, or in connection with certain specified regulatory approvals, Parent is required to pay Encore a termination fee equal to $180 million.
For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination Fee Payable by Parent.”
Guaranty (page 85)
Guarantor has agreed to absolutely, unconditionally and irrevocably guarantee, as primary obligor and not as surety, to Encore the due and punctual payment and performance of each of the payment obligations of Parent and Merger Sub, as applicable, under the Merger Agreement. The guaranty is one of payment and performance and not of collection. Guarantor’s obligations under the Merger Agreement are expressly limited to the Guaranteed Obligations and upon the full discharge and performance of all Guaranteed Obligations, Guarantor will no longer have any duties or obligations under the Merger Agreement. For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Guaranty.”
Market Prices (page 100)
Encore common stock is listed on Nasdaq under the symbol “WIRE.” The closing price of Encore common stock on April 12, 2024, the last full trading day prior to the Board’s approval of the Merger Agreement, was $260.98. On May 21, 2024, the latest practicable trading day before the date of this Proxy Statement, the closing price of Encore common stock was $279.31 per share.
Appraisal Rights (page 103)
If the Merger is consummated, Encore stockholders of record and beneficial owners who continuously hold shares of Encore common stock through the Effective Time, do not vote in favor of the adoption of the Merger Agreement, validly and properly demand appraisal of their shares of Encore common stock and do not withdraw their demands or otherwise lose their rights to seek appraisal will be entitled to seek appraisal of their shares of Encore common stock in connection with the Merger under Section 262 of the DGCL. This means that Encore stockholders of record and beneficial owners who perfect their appraisal rights, do not thereafter withdraw their demand for appraisal, and comply with all other requirements and procedures prescribed by Section 262 of the DGCL may be entitled to have their shares of Encore common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of Encore common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest to be paid on the amount determined to be fair value, if any (or in certain circumstances described in further detail in the section of this Proxy Statement entitled “Appraisal Rights,” on the difference between the amount determined to be the fair value and the amount paid by the Surviving Corporation in the Merger to each Encore stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, persons who wish to seek appraisal of their shares are encouraged to review Section 262 of the DGCL carefully and to seek the advice of legal counsel with respect to the exercise of appraisal rights.
Encore stockholders of record and beneficial owners considering seeking appraisal should be aware that the fair value of their shares of Encore common stock as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares.
To exercise your appraisal rights, you must: (a) submit a written demand for appraisal to Encore before the vote is taken on the adoption of the Merger Agreement; (b) not submit a proxy or otherwise vote in favor of the proposal to adopt the Merger Agreement; (c) continue to hold your shares of Encore common stock through the Effective Time; and (d) strictly comply with all other procedures for exercising appraisal rights under Section 262 of the DGCL. Your failure to follow exactly the procedures specified under Section 262 of the DGCL may result in the loss of your appraisal rights. In addition, the Delaware Court
 
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of Chancery will dismiss appraisal proceedings in respect of the Merger unless certain stock ownership conditions are satisfied by the Encore stockholders seeking appraisal. The DGCL requirements for exercising appraisal rights are described in further detail in the section of this Proxy Statement entitled “Appraisal Rights,” which is qualified in its entirety by Section 262 of the DGCL, the relevant section of the DGCL regarding appraisal rights. A copy of Section 262 of the DGCL may be accessed without subscription or cost at the Delaware Code Online (available at: https://delcode.delaware.gov/title8/c001/sc09/index.html#262) and is incorporated herein by reference. If you hold your shares of Encore common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you may make a written demand for appraisal in your own name, but you must satisfy the conditions set forth above and your written demand must also reasonably identify the holder of record of the shares for which demand is made, be accompanied by documentary evidence of your beneficial ownership of stock (such as a brokerage or securities account statement containing such information or a letter from a broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which you consent to receive notices given by the Surviving Corporation under Section 262 of the DGCL and to be set forth on the verified list required by Section 262(f) of the DGCL. For more information, please see the section of this Proxy Statement entitled “Appraisal Rights.”
Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this Proxy Statement, including the Merger, or determined if the information contained in this Proxy Statement is accurate or adequate. Any representation to the contrary is a criminal offense.
 
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QUESTIONS AND ANSWERS
The following questions and answers are intended to address some commonly asked questions regarding the Merger, the Merger Agreement and the Special Meeting. These questions and answers may not address all questions that may be important to you as an Encore stockholder. You are encouraged to read carefully the more detailed information contained elsewhere in this Proxy Statement, the annexes to this Proxy Statement and the documents we refer to in this Proxy Statement. You may obtain the information incorporated by reference in this Proxy Statement without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 109 of this Proxy Statement.
Q:
Why am I receiving these materials?
A:
On April 14, 2024, Encore entered into the Merger Agreement providing for the Merger of Merger Sub with and into Encore, with Encore surviving the Merger as the Surviving Corporation. As a result of the Merger, Encore will become a wholly owned subsidiary of Parent. The Board is furnishing this Proxy Statement and form of proxy card to the Encore stockholders in connection with the solicitation of proxies in favor of the Merger Agreement Proposal and the other proposals to be voted on at the Special Meeting or any adjournment or postponement thereof. This Proxy Statement includes information that we are required to provide to you under the SEC rules and is designed to assist you in voting on the matters presented at the Special Meeting. Encore stockholders of record as of the Record Date may attend the Special Meeting and are entitled and requested to vote on the Special Meeting Proposals.
Q:
When and where is the Special Meeting?
A:
The Special Meeting will be held on Wednesday, June 26, 2024, at 9:00 a.m., Central Time online at https://www.virtualshareholdermeeting.com/WIRE2024SM.
Q:
What is the proposed Merger and what effects will it have on Encore?
A:
The proposed Merger is the acquisition of Encore by Parent through the Merger of Merger Sub with and into Encore pursuant to the Merger Agreement. If the Merger Agreement Proposal is approved by the requisite number of shares of Encore common stock, and the other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub will merge with and into Encore, the separate corporate existence of Merger Sub will cease and Encore will continue its corporate existence under the laws of the State of Delaware as the Surviving Corporation. As a result of the Merger, Encore will become a wholly owned subsidiary of Parent, and you will no longer own shares of Encore common stock. Encore expects to delist the Encore common stock from Nasdaq as promptly as practicable after the Effective Time and deregister the Encore common stock pursuant to the Exchange Act as promptly as practicable after such delisting. Thereafter, Encore would no longer be a publicly traded company, and Encore would no longer file periodic reports with the SEC on account of Encore common stock.
Q:
What will I receive if the Merger is consummated?
A:
Upon the consummation of the Merger, for each share of Encore common stock that you own immediately prior to the Effective Time, you will be entitled to receive, without interest, the Base Consideration of  $290.00 in cash, plus, if the Merger is not consummated by April 14, 2025, the Additional Consideration of  $0.0635 per share of Encore common stock per day beginning on April 15, 2025, up to, but excluding, the date the Merger is consummated, subject to any required tax withholding (unless you have properly and validly exercised and do not withdraw your appraisal rights under Section 262 of the General Corporation Law of the State of Delaware). For example, if you own 100 shares of Encore common stock, you will be entitled to receive $29,000.00 in cash in exchange for your 100 shares of Encore common stock, assuming the date of the closing of the Merger (the “Closing Date”) occurs on or prior to April 14, 2025. Upon the consummation of the Merger, your shares will be cancelled, and you will not own nor be entitled to acquire shares in the Surviving Corporation or Parent.
 
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Q:
Who is entitled to vote at the Special Meeting?
A:
Only Encore stockholders of record as of the close of business on May 17, 2024 are entitled to notice of the Special Meeting and to vote at the Special Meeting or at any adjournment thereof. If your shares of Encore common stock are held in street name and you do not instruct your broker, bank, trust or other nominee how to vote your shares, then, because each of the Special Meeting Proposals are “non-routine matters,” your broker, bank, trust or other nominee would not have discretionary authority to vote your shares on the Special Meeting Proposals. Instructions on how to vote shares held in street name are described under the question “— How may I vote?” below.
Q:
How may I vote?
A:
For Encore stockholders of record.   If you are eligible to vote at the Special Meeting and are a stockholder of record, you may vote your shares in any of four ways:

by submitting your proxy by voting over the Internet using the website indicated on the enclosed proxy card;

by submitting your proxy by telephone using the toll-free number on the enclosed proxy card;

by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided; or

by attending the Special Meeting in a virtual format and voting by virtual ballot.
For holders in street name.   If your shares of Encore common stock are held in street name and you do not instruct your broker, bank, trust or other nominee how to vote your shares, then, because each of the Special Meeting Proposals is a “non-routine matter,” your broker, bank, trust or other nominee would not have discretionary authority to vote your shares on the Special Meeting Proposals. If your shares of Encore common stock are held in street name, your broker, bank, trust or other nominee has enclosed a voting instruction form with this Proxy Statement. If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting. We encourage you to authorize your broker, bank, trust or other nominee to vote your shares “FOR” each of the Special Meeting Proposals by following the instructions provided on the voting instruction form.
If you submit your proxy by Internet, telephone or mail, and you do not subsequently revoke your proxy, your shares of Encore common stock will be voted in accordance with your instructions.
Even if you plan to attend the Special Meeting and vote by ballot, you are encouraged to vote your shares of Encore common stock by proxy. You may still vote your shares of Encore common stock at the Special Meeting even if you have previously submitted a proxy. If you attend the Special Meeting in a virtual format and vote by virtual ballot, your vote by virtual ballot will revoke any proxy previously submitted.
Q:
How many votes do I have?
A:
Each holder of Encore common stock is entitled to cast one vote on each matter properly brought before the Special Meeting for each share of Encore common stock that such holder owned as of the Record Date.
Q:
May I attend the Special Meeting and vote in person?
A:
Encore will hold the Special Meeting in a virtual meeting format only on the virtual meeting website. You will not be able to attend the Special Meeting physically in person. Once admitted to the Special Meeting, stockholders may vote their shares by following the instructions available on the meeting website. To vote during the Special Meeting, you must do so by logging into
 
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https://www.virtualshareholdermeeting.com/WIRE2024SM using the 16-digit control number included in your proxy materials.
We recommend that you submit your proxy via the Internet or by telephone by following the instructions on the enclosed proxy card, or by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided, even if you plan to attend the Special Meeting in a virtual format. We encourage all stockholders to vote electronically. If you properly and timely submit your proxy, the individuals named as your proxy holders will vote your shares as you have directed. If you attend the Special Meeting in a virtual format and vote by virtual ballot, your vote by virtual ballot will revoke any proxy previously submitted.
Q:
What matters will be voted on at the Special Meeting?
A:
You are being asked to consider and vote on the following proposals:

to approve the Merger Agreement Proposal;

to approve the Compensation Proposal; and

to approve the Adjournment Proposal.
Q:
How does the Merger Consideration compare to the market price of Encore common stock prior to the announcement of the Merger?
A:
The Base Consideration of  $290.00 per share of Encore common stock represents a premium of approximately 11% over the closing stock price on April 12, 2024, the last full trading day prior to the announcement of the Merger Agreement.
Q:
What do I need to do now?
A:
Encore encourages you to read this Proxy Statement, including all documents incorporated by reference into this Proxy Statement, and its annexes carefully and in their entirety. Then as promptly as possible, follow the instructions on the enclosed proxy card to submit your proxy electronically over the Internet or by telephone, so that your shares can be voted at the Special Meeting. We encourage all stockholders to vote electronically. Alternatively, if you do not have access to a touch-tone phone or the Internet, you may sign, date and return the enclosed proxy card in the postage-paid envelope provided. If your shares of Encore common stock are held in street name, your broker, bank, trust or other nominee has enclosed a voting instruction form with this Proxy Statement. Please do not send your stock certificate(s) with your proxy card. See “— How may I vote?” in this section of this Proxy Statement for more information.
Q:
How does the Board recommend that I vote?
A:
On April 14, 2024, the Board, after considering various factors, including the factors described in the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Recommendation and Reasons for the Merger” beginning on page 45 of this Proxy Statement, and after consultation with the Company’s independent legal and financial advisors, unanimously (i) determined that the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of Encore and its stockholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) authorized and approved the execution, delivery and performance of the Merger Agreement by Encore and (iv) recommended the adoption of the Merger Agreement by the Encore stockholders and directed that the Merger Agreement be submitted for adoption by Encore stockholders at a meeting of Encore stockholders.
The Board recommends that you vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Compensation Proposal and (iii) “FOR” the Adjournment Proposal.
[MISSING IMAGE: ic_checkmark-pn.gif]
 
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Q:
Should I send in my stock certificate(s) now?
A:
No. If you are a record holder and hold physical stock certificate(s) for shares of Encore common stock, after the Merger is consummated, under the terms of the Merger Agreement, you will receive a letter of transmittal instructing you to send your stock certificate(s) to the paying agent in order to receive the cash payment of the Merger Consideration for each share of Encore common stock represented by such stock certificate(s). You should use the letter of transmittal to exchange your stock certificate(s) for the Merger Consideration to which you are entitled upon the consummation of the Merger. If you hold your shares in “street name,” please contact your broker, bank, trust or other nominee for instructions as to how to effect the surrender of your shares of Encore common stock in exchange for the Merger Consideration in accordance with the terms of the Merger Agreement. Please do not send in your stock certificate(s) now.
Q:
If I do not know where my stock certificates are, how will I get the Merger Consideration for my shares of Encore common stock?
A:
If the Merger is consummated, the transmittal materials you will receive after the Closing will include the procedures that you must follow if you cannot locate your stock certificate(s). This will include an affidavit that you will need to sign attesting to the loss of your stock certificate(s). You may also be required to post a bond as indemnity against any potential loss.
Q:
What happens if the Merger is not consummated?
A:
If the Merger Agreement Proposal is not approved by Encore stockholders or if the Merger is not consummated for any other reason, Encore stockholders will not receive any payment for their shares of Encore common stock. Instead, Encore will remain an independent public company, Encore common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and we will continue to file periodic reports with the SEC on account of Encore common stock.
Under certain specified circumstances, Encore may be required to pay Parent the Company Termination Fee upon the termination of the Merger Agreement, as described in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination Fee Payable by Encore” beginning on page 93 of this Proxy Statement.
Q:
Do any of the directors or executive officers of Encore have interests in the Merger that may be in addition to, or differ from, those of Encore stockholders generally?
A:
Yes. In considering the recommendation of the Board with respect to the Merger Agreement Proposal, you should be aware that the directors and executive officers of Encore may have interests in the Merger different from, or in addition to, the interests of Encore stockholders generally. The Board was aware of and considered these interests, to the extent such interests existed at the time, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, in approving the Merger Agreement and the Merger, and in recommending that the Merger Agreement Proposal be approved by Encore stockholders. For a description of the interests of the directors and executive officers of Encore in the Merger, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Interests of the Directors and Executive Officers of Encore in the Merger” beginning on page 56 of this Proxy Statement.
Q:
Why am I being asked to consider and vote on the Compensation Proposal?
A:
Under SEC rules, we are required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to our named executive officers that is based on, or otherwise relates to, the Merger, commonly referred to as “golden parachute” compensation. If the Merger Agreement is approved and adopted by the Encore stockholders, and the Merger is completed, this compensation will be paid to the Company’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and other contractual arrangements even if the Encore stockholders fail to approve this proposal.
 
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Q:
What vote is required to approve the proposals submitted to a vote at the Special Meeting?
A:
The affirmative vote of the holders of a majority of the outstanding shares of Encore common stock entitled to vote thereon is required to approve the Merger Agreement Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve, by means of a non-binding, advisory vote, the Compensation Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve the Adjournment Proposal. This means that the Merger Agreement Proposal will be approved if the number of shares voted “FOR” such proposal is greater than fifty percent (50%) of the total number of outstanding shares of Encore common stock entitled to vote on the Merger Agreement Proposal, and each of the Compensation Proposal and the Adjournment Proposal will be approved if the number of shares voted “FOR” such proposal is greater than fifty percent (50%) of the total number of outstanding shares of Encore common stock the holders of which are present in person or represented by proxy at the Special Meeting and entitled to vote on such proposal. Abstentions will have the same effect as votes “AGAINST” the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal. The failure of any Encore stockholder of record to either (i) grant a proxy electronically over the Internet, by telephone or by submitting a signed proxy card or (ii) attend the Special Meeting will result in such stockholder’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. Because each of the proposals presented to Encore stockholders will be considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
As of the Record Date, there were 15,797,183 shares of Encore common stock issued and outstanding. Each holder of Encore common stock is entitled to one vote per share of Encore common stock owned by such holder as of the Record Date.
As of the Record Date, the Company’s directors and executive officers beneficially owned, and were entitled to vote, in the aggregate, 707,632 shares of Encore common stock, representing approximately 4.48% of the outstanding shares of Encore common stock. The directors and executive officers have informed Encore that they currently intend to vote all of their shares of Encore common stock “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your shares of Encore common stock are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC (“Equiniti”), you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this Proxy Statement and your proxy card have been sent directly to you by Encore. As the stockholder of record, you have the right to vote by proxy, which involves designating another person to vote your shares, or to vote by ballot at the Special Meeting.
If your shares are held through a broker, bank, trust or other nominee, you are considered the beneficial owner of those shares. In that case, this Proxy Statement has been forwarded to you by your broker, bank, trust or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank, trust or other nominee how to vote your shares. Without your voting instructions, because of the non-routine nature of the Special Meeting Proposals, your broker, bank, trust or other nominee may not
 
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vote your shares with respect to the Special Meeting Proposals. However, if you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting.
Q:
What is a proxy?
A:
A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of Encore common stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of Encore common stock is called a “proxy card.” The Board has designated Daniel L. Jones and Bret J. Eckert, and each of them, with full power of substitution, as proxies for the Special Meeting.
Q:
Can I change or revoke my proxy?
A:
You may change or revoke your previously submitted proxy at any time before the Special Meeting or, if you attend the Special Meeting, by voting by ballot at the Special Meeting.
If you hold your shares as a record holder, you may change or revoke your proxy in any one of the following ways:

by re-submitting at a subsequent time by Internet or by telephone following the instructions on the enclosed proxy card;

by signing a new proxy card with a date later than your previously delivered proxy and submitting it following the instructions on the enclosed proxy card;

by delivering a signed revocation letter to Bret J. Eckert, the Company’s Secretary, at the Company’s mailing address on the first page of this Proxy Statement before the Special Meeting, which states that you have revoked your proxy; or

by attending the Special Meeting in a virtual format and voting by virtual ballot. Attending the Special Meeting virtually will not in and of itself revoke a previously submitted proxy. You must specifically vote by virtual ballot at the virtual Special Meeting in order for your previous proxy to be revoked.
Your latest dated proxy card, Internet or telephone vote is the one that is counted.
If your shares are held in street name, you may change your voting instructions by following the instructions of your broker, bank, trust or other nominee.
Q:
If an Encore stockholder gives a proxy, how will the shares be voted?
A:
Regardless of the method you choose to submit your proxy, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
Q:
I understand that a quorum is required in order to conduct business at the Special Meeting. What constitutes a quorum?
A:
The presence, in person or represented by proxy, of the holders of a majority of the issued and
 
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outstanding shares of Encore common stock entitled to vote at the Special Meeting constitutes a quorum. As of the close of business on the Record Date, there were 15,797,183 shares of Encore common stock issued and outstanding and entitled to vote. Therefore, holders of 7,898,592 shares must be present or represented by proxy to have a quorum. If you submit a properly executed proxy by Internet, telephone or mail, you will be considered a part of the quorum. In addition, abstentions will be counted for purposes of establishing a quorum. If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting. If a quorum is not present, the stockholders entitled to vote at the Special Meeting, present in person or represented by proxy, may adjourn the Special Meeting pursuant to the Company’s bylaws.
Q:
How can I obtain a proxy card?
A:
If you lose, misplace or otherwise need to obtain a proxy card, please follow the applicable procedure below.
For Encore stockholders of record: Please call D.F. King & Co., Inc. (“D.F. King”) at (888) 887-1266 (TOLL-FREE) or email [email protected].
For holders in “street name”: Please contact your account representative at your broker, bank, trust or other similar institution.
Q:
What happens if I sell or otherwise transfer my shares of Encore common stock after the close of business on the Record Date but before the Special Meeting?
A:
The Record Date is earlier than both the date of the Special Meeting and the date the Merger is expected to be consummated. If you sell or transfer your shares of Encore common stock after the close of business on the Record Date but before the Special Meeting, unless special arrangements (such as the provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares of Encore common stock and each of you notifies Encore in writing of such special arrangements, you will transfer the right to receive the Merger Consideration, if the Merger is consummated, to the person to whom you sell or transfer your shares of Encore common stock, but you will retain your right to vote these shares at the Special Meeting. Even if you sell or otherwise transfer your shares of Encore common stock after the close of business on the Record Date, you are encouraged to complete, date, sign and return the enclosed proxy card or submit your proxy via the Internet or telephone.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please submit your proxy or voting instructions via the Internet or telephone (or complete, date, sign and return) with respect to each proxy card and voting instruction card that you receive.
Q:
What happens if I sell my shares of Encore common stock after the Special Meeting but before the Effective Time?
A:
If you transfer your shares of Encore common stock after the Special Meeting but before the Effective Time, you will have transferred the right to receive the Merger Consideration to the person to whom you transfer your shares of Encore common stock. In order to receive the Merger Consideration, you must hold your shares of Encore common stock through the Effective Time.
Q:
Who will count the votes?
A:
A representative from Broadridge will serve as the independent inspector of elections for the Special
 
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Meeting and will tabulate votes cast by proxy or by ballot at the Special Meeting. The inspector of elections will also determine whether a quorum is present.
Q:
Who will solicit votes for, and bear the cost and expenses of, this proxy solicitation?
A:
The cost of this proxy solicitation will be borne by Encore. Our directors, officers and employees may solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. We will pay these directors, officers and employees no additional compensation for these services. We will reimburse banks, brokers and other nominees for their reasonable, out-of-pocket expenses incurred in forwarding this Proxy Statement and related materials to, and obtaining instructions relating to such materials from, beneficial owners of Encore common stock. Encore has retained D.F. King as Encore’s proxy solicitor. D.F. King will solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. Under our agreement with D.F. King, D.F. King will receive an estimated fee of  $30,000.00 plus reimbursement of its reasonable, out-of-pocket expenses for its services plus fees for calls (if any) to or from retail Encore stockholders. In addition, D.F. King and certain related persons will be indemnified against certain liabilities arising out of, or in connection with, the engagement.
Q:
Where can I find the voting results of the Special Meeting?
A:
Encore intends to notify Encore stockholders of the results of the Special Meeting by issuing a press release, which it will also file with the SEC as an exhibit to a Current Report on Form 8-K.
Q:
Will I be subject to U.S. federal income tax upon the exchange of Encore common stock for cash pursuant to the Merger?
A:
The receipt of cash by Encore stockholders in exchange for shares of Encore common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder that exchanges shares of Encore common stock for cash pursuant to the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares of Encore common stock surrendered in exchange therefor.
A Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to the exchange of its shares of Encore common stock for cash pursuant to the Merger unless such Non-U.S. Holder has certain connections with the United States.
Because particular circumstances may differ, all holders should consult their own tax advisors to determine the particular U.S. federal income tax consequences of the Merger to them in light of their particular facts and circumstances, as well as any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction. For a general discussion of certain material U.S. federal income tax consequences of the Merger, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 61 of this Proxy Statement.
Q:
What will the holders of outstanding Encore equity awards receive in the Merger?
Immediately prior to the Effective Time, each Company RSU Award (or portion thereof) granted prior to the date of the Merger Agreement that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of such Company RSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company RSU Award (or portion thereof).
 
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Immediately prior to the Effective Time, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of such Company PSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company PSU Award (or portion thereof). For purposes of clause (ii) of the immediately preceding sentence, the total number of shares of Encore common stock subject to a Company PSU Award will be determined in accordance with the applicable award terms; it being understood that if any portion of the Company PSU Award has been earned by its terms based on performance for completed performance periods as of the Effective Time, but has not yet become vested pursuant to any applicable time or service-based vesting requirements, the total number of shares of Encore common stock subject to such Company PSU Award will be based on the number of shares of Encore common stock actually earned based on performance for the completed performance periods.
Immediately prior to the Effective Time, each Company Option Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of such Company Option Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration over the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of Encore common stock subject to such Company Option Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
Immediately prior to the Effective Time, each Company SAR Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and will be cancelled and converted into the right of the holder of such Company SAR Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration over the applicable base or strike price of such Company SAR Award, multiplied by (ii) the number of shares of Encore common stock referenced by such Company SAR Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the base or strike price of any Company SAR Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company SAR Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
Immediately prior to the Effective Time, all shares of Encore common stock that are then unvested and subject to an outstanding Company Restricted Stock Award will become fully vested and free of any applicable repurchase or forfeiture conditions.
Immediately prior to the Effective Time, each Post-Signing Company RSU Award will no longer represent a right to acquire shares of Encore common stock, will not accelerate in connection with the Merger, and will automatically become a Cash Award with respect to an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Post-Signing Company RSU Award immediately prior to the Effective Time. Each Cash Award will otherwise be subject to substantially the same terms and conditions applicable to the related Post-Signing Company RSU Award as of immediately prior to the Effective Time.
 
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Q:
When do you expect the Merger to be consummated?
A:
Encore and Parent are working toward consummating the Merger as quickly as possible. Assuming the timely receipt of required regulatory clearances and satisfaction or waiver (in accordance with the terms of the Merger Agreement) of other closing conditions, including approval by Encore stockholders of the proposal to adopt the Merger Agreement, we anticipate that the Merger will be completed in the second half of 2024.
Q:
Are there any other risks to me from the Merger that I should consider?
A:
Yes. There are risks associated with all business combinations, including the Merger. See the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 26 of this Proxy Statement.
Q:
May I exercise appraisal rights in connection with the Merger?
A:
Yes. If the Merger is consummated, Encore stockholders who continuously hold shares of Encore common stock through the Effective Time, do not vote in favor of the adoption of the Merger Agreement and validly and properly demand appraisal of their shares and do not withdraw their demands or otherwise lose their rights to seek appraisal will be entitled to seek appraisal of their shares in connection with the Merger under Section 262 of the DGCL. This means that Encore stockholders who perfect their appraisal rights, do not thereafter withdraw their demand for appraisal and comply with all other requirements and procedures prescribed by Section 262 of the DGCL may be entitled to have their shares of Encore common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of Encore common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest to be paid on the amount determined to be fair value, if any (or in certain circumstances described in further detail in the section of this Proxy Statement entitled “Appraisal Rights,” on the difference between the amount determined to be the fair value and the amount paid by the Surviving Corporation in the Merger to each Encore stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, Encore stockholders who wish to seek appraisal of their shares are encouraged to review Section 262 of the DGCL carefully and to seek the advice of legal counsel with respect to the exercise of appraisal rights. See the section entitled “Appraisal Rights” beginning on page 103 of this Proxy Statement and the text of Section 262 of the DGCL, which may be accessed without subscription or cost at the Delaware Code Online (available at: https://delcode.delaware.gov/title8/c001/sc09/index.html#262) and is incorporated herein by reference.
Q:
What if during the check-in time or during the Special Meeting I have technical difficulties or trouble accessing the virtual meeting website?
A:
If Encore experiences technical difficulties during the Special Meeting (e.g., a temporary or prolonged power outage), it will determine whether the Special Meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Special Meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any such situation, Encore will promptly notify stockholders of the decision via the virtual meeting website.
Technical support will be ready to assist you with any individual technical difficulties you may have accessing the virtual meeting website. Contact information for technical support will appear on the virtual meeting login page prior to the start of the Special Meeting.
Q:
How can I obtain more information about Encore?
A:
You can find more information about Encore from various sources described in the section entitled “Where You Can Find More Information” beginning on page 109 of this Proxy Statement.
 
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Q:
Who can help answer my questions?
A:
If you have any questions concerning the Merger, the Special Meeting or this Proxy Statement, would like additional copies of this Proxy Statement or need help voting your shares of Encore common stock, please contact the Company’s proxy solicitor:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Stockholders May Call: (888) 887-1266 (TOLL-FREE)
Banks and Brokers May Call Collect: (212) 269-5550
Email: [email protected]
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement, and the documents to which Encore refers you in this Proxy Statement, as well as information included in oral statements or other written statements made or to be made by Encore or on its behalf, contain “forward-looking statements” within the meaning of the federal securities laws, including but not limited to, those statements related to the Merger, including financial estimates and statements as to the expected timing, completion, effects of the Merger and expectations following the closing of the Merger. You can identify forward-looking statements because they contain words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may” and variations of these terms or the negative of these terms and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Company, our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance.
Important factors, risks and uncertainties that could cause actual results to differ materially from such plans, estimates or expectations include but are not limited to: (i) the possibility that the Company may be unable to obtain the required stockholder approval, antitrust or other regulatory approvals or that other conditions to consummation of the Merger may not be satisfied, such that the Merger may not be consummated or that the consummation may be delayed; (ii) the reaction of distributors, vendors, other partners and employees to the announcement or consummation of the Merger; (iii) general macroeconomic conditions, including risks associated with unforeseeable events such as pandemics, wars and other hostilities, emergencies or other disasters; (iv) risks associated with certain covenants in the Merger Agreement that may limit or disrupt our current plans and operations; (v) the amount of the costs, fees, expenses and charges related to the Merger that may not be recovered if the Merger is not consummated for any reason; (vi) the outcome of any legal proceedings that may be brought related to the Merger; (vii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; (viii) other risks and uncertainties described in the Company’s periodic reports on Forms 10-K and 10-Q that the Company files with the SEC, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by the Company with the SEC from time to time, which are available via the SEC’s website at www.sec.gov and (ix) the risks described in this Proxy Statement. All forward-looking statements speak only as of the date hereof.
There can be no assurance that the Merger will be completed, or if it is completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. The forward-looking statements relate only to events as of the date on which the statements are made. The Company does not undertake any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements.
We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this communication that could cause actual results to differ. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect the Company.
 
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THE SPECIAL MEETING
Date, Time and Place of the Special Meeting
This Proxy Statement is being furnished to Encore stockholders as a part of the solicitation of proxies by the Board for use at the Special Meeting to be held on Wednesday, June 26, 2024, at 9:00 a.m., Central Time or at any adjournment or postponement thereof. Encore will hold the Special Meeting in a virtual format only at https://www.virtualshareholdermeeting.com/WIRE2024SM.
Purpose of the Special Meeting
At the Special Meeting, Encore stockholders will be asked to consider and vote to approve:

the Merger Agreement Proposal;

the Compensation Proposal; and

the Adjournment Proposal.
Record Date; Shares Entitled to Vote; Quorum
Only Encore stockholders of record as of the close of business on the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the Special Meeting will be available for inspection at the Company’s headquarters located at 1329 Millwood Road, McKinney, Texas 75069, during regular business hours for a period of at least ten days before the Special Meeting.
The inspector of elections appointed for the Special Meeting will tabulate votes cast by proxy or by ballot at the Special Meeting. The inspector of elections will also determine whether a quorum is present. The presence, in person or represented by proxy, of the holders of a majority of the issued and outstanding shares of Encore common stock entitled to vote at the Special Meeting constitutes a quorum. Shares that abstain from voting on any proposal will be treated as shares that are present and entitled to vote at the Special Meeting for purposes of determining whether a quorum is present.
With respect to shares held in street name, your broker, bank, trust or other nominee generally has the discretionary authority to vote uninstructed shares on “routine” matters but cannot vote such uninstructed shares on “non-routine” matters. Because the Special Meeting Proposals presented to Encore stockholders are considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
Vote Required; Abstentions and Broker Non-Votes
The affirmative vote of the holders of a majority of the outstanding shares of Encore common stock entitled to vote thereon is required to approve the Merger Agreement Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve, by means of a non-binding, advisory vote, the Compensation Proposal. The affirmative vote of the holders of a majority of the shares of Encore common stock having voting power present in person or represented by proxy at the Special Meeting and entitled to vote thereon, provided a quorum is present, is required to approve the Adjournment Proposal. This means that the Merger Agreement Proposal will be approved if the number of shares voted “FOR” such proposal is greater than fifty percent (50%) of the total number of outstanding shares of Encore common stock entitled to vote on the Merger Agreement Proposal, and each of the Compensation Proposal and the Adjournment Proposal will be approved if the number of shares voted “FOR” such proposal is greater than fifty percent (50%) of the total number of outstanding shares of Encore common stock the holders
 
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of which are present in person or represented by proxy at the Special Meeting and entitled to vote on such proposal. Abstentions will have the same effect as votes “AGAINST” the Merger Agreement Proposal, Compensation Proposal and the Adjournment Proposal. The failure of any Encore stockholder of record to either (i) grant a proxy electronically over the Internet, by telephone or by submitting a signed proxy card or (ii) attend the Special Meeting will result in such stockholder’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. Because each of the proposals presented to Encore stockholders will be considered non-discretionary, we do not anticipate any broker non-votes at the Special Meeting. The failure of any beneficial owner to instruct their broker, bank, trust or other nominee how to vote will result in such beneficial owner’s shares not being considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal. If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposal, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting.
Shares Held by the Company’s Directors and Executive Officers
As of the Record Date, the Company’s directors and executive officers beneficially owned, and were entitled to vote, in the aggregate, 707,632 shares of Encore common stock, representing approximately 4.48% of the outstanding shares of Encore common stock. The directors and executive officers have informed Encore that they currently intend to vote all of their shares of Encore common stock “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
Voting of Proxies
If your shares are registered in your name with the Company’s transfer agent, Equiniti, you may cause your shares to be voted by submitting electronically over the Internet or by telephone a proxy authorizing the voting of your shares by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy electronically over the Internet or by telephone. We encourage all stockholders to vote electronically. Alternatively, if you do not have access to a touch-tone phone or the Internet, you may sign, date and return the enclosed proxy card in the postage-paid envelope provided. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.
If you plan to attend and desire to vote at the Special Meeting in a virtual format, you will be provided with a virtual ballot at the Special Meeting. Even if you plan to attend the Special Meeting, we encourage you to submit your proxy to vote your shares in advance of the Special Meeting.
Voting instructions are included on your enclosed proxy card. All shares represented by properly executed proxies received in time for the Special Meeting will be voted at the Special Meeting in accordance with the instructions of the Encore stockholders submitting such proxies. Properly executed proxies that do not contain voting instructions will be voted “FOR” the Merger Agreement Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
If your shares of Encore common stock are held in street name and you do not instruct your broker, bank, trust or other nominee how to vote your shares, then, because each of the Special Meeting Proposals is a “non-routine matter,” your broker, bank, trust or other nominee would not have discretionary authority to vote your shares on the Special Meeting Proposals. If your shares of Encore common stock are held in street name, your broker, bank, trust or other nominee has enclosed a voting instruction form with this Proxy Statement. We encourage you to authorize your broker, bank, trust or other nominee to vote your shares “FOR” each of the Special Meeting Proposals by following the instructions provided on the voting instruction form. If you do not instruct your vote via the Internet or telephone through your broker, bank, trust or other nominee or do not return your bank’s, broker’s, trust’s or other nominee’s voting form, or do not attend the Special Meeting and vote with a proxy from your broker, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the Merger
 
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Agreement Proposal, but, provided a quorum is present, will not have any effect on the Compensation Proposal or the Adjournment Proposal.
If you hold your shares in street name and give voting instructions to your broker, bank, trust or other nominee with respect to one of the proposals, but give no instruction as to the other proposals, then those shares will be deemed present at the Special Meeting for purposes of establishing a quorum at the Special Meeting.
How You May Revoke or Change Your Vote
You may change or revoke your previously submitted proxy at any time before the Special Meeting or, if you attend the Special Meeting in a virtual format, by voting by virtual ballot at the Special Meeting. If you hold your shares as a record holder, you may change or revoke your proxy in any one of the following ways:

by re-submitting at a subsequent time by Internet or by telephone following the instructions on the enclosed proxy card;

by signing a new proxy card with a date later than your previously delivered proxy and submitting it following the instructions on the enclosed proxy card;

by delivering a signed revocation letter to Bret J. Eckert, the Company’s Corporate Secretary, at the Company’s address on the first page of this Proxy Statement before the Special Meeting, which states that you have revoked your proxy; or

by attending the Special Meeting in a virtual format and voting by virtual ballot. Attending the Special Meeting will not in and of itself revoke a previously submitted proxy. You must specifically vote by ballot at the Special Meeting for your previous proxy to be revoked. To vote during the Special Meeting, you must do so by logging into https://www.virtualshareholdermeeting.com/WIRE2024SM using the 16-digit control number included in your proxy materials.
Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by the Company’s Corporate Secretary prior to the Special Meeting.
If your shares are held in street name, you may change your voting instructions by following the instructions of your broker, bank, trust or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to Encore or by voting virtually at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank, trust or other nominee.
Any adjournment, recess or postponement of the Special Meeting for the purpose of soliciting additional proxies will allow Encore stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting that was adjourned, recessed or postponed.
Adjournments
Encore stockholders are also being asked to approve the Adjournment Proposal, which will enable the adjournment of the Special Meeting if necessary or appropriate, including if there are insufficient votes for the approval of the proposal to adopt the Merger Agreement. If a quorum is not present, the stockholders entitled to vote at the Special Meeting may adjourn the Special Meeting from time to time until a quorum shall be present.
If a new record date is or must be fixed under law, a notice of the adjourned meeting must be given to each Encore stockholder of record as of the new record date and who is otherwise entitled to notice of, and to vote at, such meeting.
If the Special Meeting is adjourned, Encore stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the Special Meeting Proposals. At any adjourned meeting, any business may be transacted that might have been transacted at the original Special Meeting, and all proxies will be voted in the same manner as the manner in which such proxies
 
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would have been voted at the original convening of the Special Meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent meeting.
Technical Difficulties or Trouble Accessing the Virtual Meeting Website
If Encore experiences technical difficulties during the Special Meeting (e.g., a temporary or prolonged power outage), it will determine whether the Special Meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the Special Meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged). In any such situation, Encore will promptly notify stockholders of the decision via the virtual meeting website.
Technical support will be ready to assist you with any individual technical difficulties you may have accessing the virtual meeting website. Contact information for technical support will appear on the virtual meeting login page prior to the start of the Special Meeting.
Tabulation of Votes
All votes will be tabulated by the inspector of elections appointed for the Special Meeting. The inspector of elections will separately tabulate affirmative and negative votes and abstentions.
Solicitation of Proxies
The cost of this proxy solicitation will be borne by Encore. Our directors, officers and employees may solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. We will pay these directors, officers and employees no additional compensation for these services. We will reimburse banks, brokers and other nominees for their reasonable, out-of-pocket expenses incurred in forwarding this Proxy Statement and related materials to, and obtaining instructions relating to such materials from, beneficial owners of Encore common stock.
Encore has retained D.F. King as its proxy solicitor. D.F. King will solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. Under our agreement with D.F. King, D.F. King will receive an estimated fee of  $30,000.00 plus reimbursement of its reasonable, out-of-pocket expenses for its services plus fees for calls (if any) to or from retail Encore stockholders. In addition, D.F. King and certain related persons will be indemnified against certain liabilities arising out of, or in connection with, the engagement.
Anticipated Date of Consummation of the Merger
Assuming timely satisfaction of necessary closing conditions, including, among other things, the approval by Encore stockholders of the Merger Agreement Proposal and receipt of required regulatory approvals, we currently anticipate that the Merger will be consummated in the second half of 2024.
Attending the Special Meeting
Encore stockholders may log into the Special Meeting using the 16-digit control number on their proxy cards. Once admitted to the Special Meeting, Encore stockholders may vote their shares by following the instructions available on the meeting website.
The virtual meeting site is supported on Internet browsers and devices (e.g., desktops, laptops, tablets and smart phones) running the most updated version of applicable software and plugins. Each participant should ensure strong WiFi or other Internet connection, allow plenty of time to log in and ensure that he or she can hear streaming audio prior to the start of the Special Meeting.
Voting at the Special Meeting Remotely as a Stockholder of Record or as a Beneficial Owner Who Holds Shares Through a Broker, Bank, Trust or Other Nominee
To vote during the Special Meeting, you must do so by logging into https://www.virtualshareholdermeeting.com/WIRE2024SM using the 16-digit control number included in your proxy materials. Instructions on how to participate in the Special Meeting are posted at
 
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https://www.virtualshareholdermeeting.com/WIRE2024SM. Confirmation that your vote has been received should appear once submitted. For as long as the polls remain open during the Special Meeting, you will be able to change your vote by selecting another voting choice. We encourage you to vote your proxy via the Internet, telephone or proxy card prior to the Special Meeting, even if you plan to attend the Special Meeting.
Encore stockholders are reminded that they can submit their proxies prior to the Special Meeting over the Internet using the website indicated on the proxy card, by telephone using the toll-free number on the proxy card or by signing, dating and returning the proxy card in the postage-paid envelope previously provided. We encourage Encore stockholders to vote electronically. If you have submitted your vote by proxy in advance of the Special Meeting, you do not need to vote by ballot, unless you wish to change your vote.
Assistance
If you need assistance in completing your proxy card or have questions regarding the Special Meeting, please contact D.F. King, our proxy solicitor, by calling (888) 887-1266 (TOLL-FREE). Brokers, banks and other nominees may call collect at (212) 269-5550.
 
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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT
THE MERGER
The discussion of the Merger in this section and elsewhere in this Proxy Statement is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this Proxy Statement and is incorporated into this Proxy Statement by reference. This summary does not purport to be complete and may not contain all of the information about the Merger that is important to you. You are encouraged to read the Merger Agreement carefully and in its entirety as it is the legal document that governs the Merger.
Additional information about Encore may be found elsewhere in this Proxy Statement and in our other public filings. See the section entitled “Where You Can Find More Information” beginning on page 109 of this Proxy Statement.
Parties Involved in the Merger
Encore Wire Corporation
Encore Wire Corporation is a Delaware corporation, incorporated in 1989. The Company manufactures a broad range of electrical wire and cables, used to distribute power from the transmission grid to the wall outlet or switch. Encore’s diversified product portfolio and low-cost of production positions it exceptionally well to play a key role in the transition to a more sustainable and reliable energy infrastructure. Our products are proudly made in America at our vertically-integrated, single-site, Texas campus.
The Company sells its products through manufacturers’ representatives to wholesale electrical distributors servicing the residential, commercial, and industrial sectors.
Encore common stock is currently listed on Nasdaq under the symbol “WIRE.”
The Company’s principal executive office and manufacturing plants are located at 1329 Millwood Road, McKinney, Texas 75069. The Company’s telephone number is (972) 562-9473.
Prysmian S.p.A.
Prysmian S.p.A., which we refer to as “Parent,” is a company organized under the laws of the Republic of Italy, operates in the business of underground and submarine cables and systems for power transmission and distribution, of specialty cables for applications in many different industries and of medium and low voltage cables for the construction and infrastructure sectors. It produces voice, video and data transmission cables and accessories for the telecommunications industry, offering a comprehensive range of optical fibers, optical and copper cables and connectivity systems.
Parent’s ordinary shares are listed on the Borsa Italiana under the symbol “PRY.”
Parent’s principal executive office is located at Via Chiese 6, 20126 Milano, Italy.
Prysmian Cables and Systems USA, LLC
Prysmian Cables and Systems USA, LLC, which we refer to as “Guarantor,” is a Delaware limited liability company and a wholly owned subsidiary of Parent.
Applause Merger Sub Inc.
Applause Merger Sub Inc., which we refer to as “Merger Sub,” is a Delaware corporation and a wholly owned subsidiary of Parent and was formed on April 12, 2024, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, including the Merger, and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement. Upon completion of the Merger, Merger Sub will merge with and into Encore and will cease to exist.
 
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Effects of the Merger
The Merger Agreement provides that, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub will be merged with and into Encore, whereupon the separate corporate existence of Merger Sub will cease, and Encore will continue as the Surviving Corporation. As a result of the Merger, the Surviving Corporation will become a wholly owned subsidiary of Parent and Encore common stock will no longer be publicly traded. In addition, Encore common stock will be delisted from Nasdaq and deregistered under the Exchange Act, in each case, in accordance with applicable laws, rules and regulations, and Encore will no longer file periodic reports with the SEC on account of Encore common stock. If the Merger is consummated, you will not own any shares of capital stock of the Surviving Corporation. The “Effective Time” will occur upon the filing of the certificate of merger with the Secretary of State of the State of Delaware (or at such later time as Encore and Parent may mutually agree in writing and specify in the certificate of merger).
Effect on Encore if the Merger is Not Consummated
If the Merger Agreement is not adopted by the Encore stockholders, or if the Merger is not consummated for any other reason:

the Encore stockholders will not be entitled to, nor will they receive, any payment for their respective shares of Encore common stock;

Encore will remain an independent public company, the Encore common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and Encore will continue to file periodic reports with the SEC on account of the Encore common stock;

we anticipate that (A) management will operate the business in a manner similar to that in which it is being operated today and (B) Encore stockholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including but not limited to, risks and uncertainties with respect to the Company’s business, prospects or results of operations, as such may be affected by, among other things, the highly competitive industry in which Encore operates and adverse economic conditions that Encore could face;

the price of Encore common stock may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of Encore common stock would return to the price at which it trades as of the date of this Proxy Statement;

the Board will continue to evaluate and review the Company’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate (irrespective of these efforts, it is possible that no other transaction acceptable to the Board will be offered or that the Company’s business, prospects or results of operations will be adversely impacted);

under certain specified circumstances, Encore will be required to pay Parent the Company Termination Fee upon the termination of the Merger Agreement. For more information, please see the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination Fee Payable by Encore” beginning on page 93 of this Proxy Statement; and

under certain specified circumstances, Parent will be required to pay the Company the Parent Termination Fee upon the termination of the Merger Agreement. For more information, please see the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Termination Fee Payable by Parent” beginning on page 94 of this Proxy Statement.
Merger Consideration
Encore common stock
Upon the consummation of the Merger, each share of Encore common stock outstanding as of immediately prior to the Effective Time (other than the Excluded Shares) will be cancelled and
 
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extinguished and automatically converted into the right to receive the Merger Consideration, subject to any required tax withholding.
Treatment of Encore Equity Awards
Company RSU Awards Granted Prior to the Date of the Merger Agreement.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company RSU Award (or portion thereof) granted prior to the date of the Merger Agreement that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company RSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company RSU Award (or portion thereof).
Company PSU Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company PSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company PSU Award (or portion thereof). For purposes of clause (ii) of the immediately preceding sentence, the total number of shares of Encore common stock subject to a Company PSU Award will be determined in accordance with the applicable award terms; it being understood that if any portion of the Company PSU Award has been earned by its terms based on performance for completed performance periods as of the Effective Time, but has not yet become vested pursuant to any applicable time or service-based vesting requirements, the total number of shares of Encore common stock subject to such Company PSU Award will be based on the number of shares of Encore common stock actually earned based on performance for the completed performance periods.
Company Option Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company Option Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of such Company Option Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration over the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of Encore common stock subject to such Company Option Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
Company SAR Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company SAR Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of such Company SAR Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable base or strike price of such Company SAR Award, multiplied by (ii) the number of shares of Encore common stock referenced by such Company SAR Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the base or strike price of any Company SAR Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company SAR Award will be cancelled without any consideration being payable in respect thereof and will have no further force or effect.
 
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Company Restricted Stock Awards. Immediately prior to the Effective Time, all shares of Encore common stock that are then unvested and subject to an outstanding Company Restricted Stock Award will become fully vested and free of any applicable repurchase or forfeiture conditions.
Company RSU Awards Granted on or After the Date of the Merger Agreement.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Post-Signing Company RSU Award will no longer represent a right to acquire shares of Encore common stock, will not accelerate in connection with the Merger, and will automatically become a Cash Award with respect to an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Post-Signing Company RSU Award immediately prior to the Effective Time. Each Cash Award will otherwise be subject to substantially the same terms and conditions applicable to the related Post-Signing Company RSU Award as of immediately prior to the Effective Time.
Background of the Merger
The following is a summary of the principal events, meetings, negotiations and actions among the parties leading to the execution and public announcement of the Merger Agreement.
The Board has regularly reviewed and evaluated, with Encore’s senior management, Encore’s business strategies, opportunities and challenges as part of its consideration and evaluation of Encore’s prospects and stockholder value. As part of this process, the Board and senior management have considered and regularly reviewed Encore’s strategic direction and business objectives, including strategic opportunities that might be available to Encore, such as possible acquisitions, divestitures and business combination transactions.
On June 7, 2023, at the request of the Chief Executive Officer of a publicly traded manufacturer of industrial products (“Party A”), Daniel L. Jones (“Mr. Jones”), the Chairman, President and Chief Executive Officer of Encore, met with Party A’s Chief Executive Officer for a lunch meeting. At this meeting, Party A’s Chief Executive Officer expressed interest in a potential business combination transaction with Encore and communicated that Party A had recently acquired almost four percent of Encore common stock in open market transactions. Party A’s Chief Executive Officer did not propose financial terms for the potential business combination transaction at that time, but requested a meeting be organized between Mr. Jones, Party A’s Chief Executive Officer and an Encore director to discuss a potential business combination transaction. Party A’s Chief Executive Officer also communicated to Mr. Jones that Party A had engaged a financial advisor that was assisting Party A with financial analyses relating to a potential business combination transaction between Party A and Encore. In a June 12, 2023 email, Mr. Jones communicated to Party A’s Chief Executive Officer that Encore was currently focused on several ongoing expansion projects and was not interested in a potential business combination transaction with Party A at that time. Encore did not enter into any confidentiality, standstill, exclusivity or other similar agreement with Party A at any point in its discussions with Party A. Encore common stock closed trading on June 12, 2023 at $185.17 per share.
On June 13, 2023, Mr. Jones received an email from Party A’s Chief Executive Officer, followed by a letter received on June 25, 2023 (the “June 25 Letter”) from Party A’s Chief Executive Officer, reiterating Party A’s interest in a potential business combination transaction with Encore and requesting that a meeting be organized to discuss a potential business combination transaction with Encore. The June 25 Letter also indicated that Party A had filed a “Notice of Proposed Acquisition of Voting Securities” pursuant to the HSR Act (as defined below), regarding its intent to acquire additional shares of Encore common stock. Copies of the June 25 Letter were shared by Mr. Jones with the other Encore directors. On June 26, 2023, Encore received a notification from the Federal Trade Commission (the “FTC”) confirming Party A’s HSR filing.
On June 28, 2023, Encore held a special meeting of the Board telephonically and in person at Encore’s offices, during which Mr. Jones reviewed for the Board the June 25 Letter and updated the Board regarding his meeting with Party A’s Chief Executive Officer on June 7, 2023 and the communications he had subsequently received from Party A’s Chief Executive Officer. Mr. Jones also reviewed for the Board a description of Party A’s operating model and business structure, including key financial metrics as
 
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compared to Encore. Following this discussion, and after taking into consideration factors and information including Party A’s publicly available information, the limited correspondence with Party A, including that Party A had not provided any terms to Encore for a potential business combination transaction, and the Board’s confidence in Encore’s current strategic direction, the Board determined that it would be premature to engage in business combination discussions with Party A at that time. On June 29, 2023, pursuant to instructions provided by the Board, Mr. Jones emailed Party A’s Chief Executive Officer and communicated the Board’s determination. Encore common stock closed trading on June 29, 2023 at $185.50 per share.
On July 24, 2023, Mr. Jones called Party A’s Chief Executive Officer in response to an unrelated request from Party A’s Chief Executive Officer to Mr. Jones and took the opportunity to inquire regarding Party A’s intentions regarding its equity interest in Encore. During this conversation, Party A’s Chief Executive Officer informed Mr. Jones that Party A was pleased with its equity investment in Encore due to the stock price appreciation since Party A made its investment, did not intend to engage in a hostile transaction with Encore and was expected to hold a board of directors meeting in the near term, which Party A’s financial advisor would be attending and during which Party A’s Chief Executive Officer anticipated that Party A’s board of directors would discuss next steps for a potential business combination transaction with Encore.
On August 3, 2023, Party A’s Chief Executive Officer telephonically informed Mr. Jones that Party A’s board of directors had approved submitting a proposal to Encore in connection with a potential business combination transaction, but that due to the potential size of such transaction, Party A would need to raise substantial debt financing and therefore would need a couple of weeks to put together its proposal. Encore common stock closed trading on August 3, 2023 at $165.06 per share.
On August 7, 2023, Encore held a regular meeting of the Board in person at Encore’s offices, with representatives of each of O’Melveny & Myers LLP, Encore’s outside M&A counsel (“O’Melveny”), Akin Gump Strauss Hauer & Feld LLP, Encore’s outside corporate and securities counsel (“Akin”), and members of Encore management present. The Board discussed the communications to date between Encore and Party A, noting that Encore had yet to receive the terms of a potential business combination proposal from Party A. The representative of O’Melveny reviewed for the Board its fiduciary duties in connection with a potential business combination transaction. The Board also discussed engaging a financial advisor in light of the developments with Party A. Mr. Jones and Bret J. Eckert (“Mr. Eckert”), the Executive Vice President and Chief Financial Officer of Encore, reviewed for the Board the qualifications and capabilities of J.P. Morgan, as well as the terms of a proposed engagement letter with J.P. Morgan. Following this discussion, the Board approved Encore’s engagement of J.P. Morgan as its financial advisor, based on, among other things, J.P. Morgan’s experience, qualifications and reputation in connection with transactions similar to the potential business combination transaction under consideration and its familiarity with the industry in which Encore operates. Encore common stock closed trading on August 7, 2023 at $170.83 per share.
On August 16, 2023, Encore formally engaged J.P. Morgan as its financial advisor on the terms previously approved by the Board.
On October 30, 2023, Mr. Jones received a written non-binding indication of interest letter from Party A for the acquisition of Encore, which, among other things, stated that based on its analysis of publicly available information, Party A would be able to offer Encore stockholders a purchase price of  $200 in cash per share of Encore common stock, Party A’s expectation that its financing would be fully committed when a definitive agreement regarding the potential business combination transaction would be signed and that Party A was prepared to immediately conduct confirmatory due diligence, including holding necessary meetings with members of Encore management. Copies of the written non-binding indication of interest letter were shared with the other Encore directors. Encore common stock closed trading on October 30, 2023 at $178.33 per share.
On November 6, 2023, Encore held a regular meeting of the Board in person at Encore’s offices, with representatives of each of O’Melveny, J.P. Morgan, Akin and members of Encore management present. Among other matters, the Board discussed Party A’s indication of interest letter with representatives of each of O’Melveny and J.P. Morgan. The representative of O’Melveny also reviewed for the Board its
 
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fiduciary duties in connection with a potential business combination transaction. Following this discussion, and taking into account the presentation received from representatives of J.P. Morgan, as well as the potential risk of leaks that could arise in the event Encore were to engage in substantive business combination discussions with Party A, the Board determined that the offer contained in the indication of interest letter substantially undervalued Encore and was not a basis on which the Board was prepared to engage further with Party A with respect to a business combination transaction. During this meeting, Mr. Jones also informed the Board that Andrea Pirondini (“Mr. Pirondini”), the North American Chief Executive Officer of Parent, had reached out to Mr. Jones requesting to meet in person in connection with a dinner on November 7, 2023 held in connection with the November 8, 2023 National Electrical Manufacturers Association (“NEMA”) annual meeting, which Mr. Jones and Mr. Pirondini were both scheduled to attend. Mr. Jones informed the Board that, if Mr. Pirondini expressed an interest in a business combination transaction with Encore, he would plan to respond by stating that if Parent wishes to submit a business combination proposal to Encore, it could do so on the basis of publicly available information about Encore. The Board agreed with that proposed approach. Later that same day, pursuant to instructions provided by the Board, Mr. Jones informed Party A’s Chief Executive Officer of the Board’s response.
On November 7, 2023, in connection with the NEMA annual meeting dinner, Mr. Jones and Mr. Pirondini met in person. During that discussion, Mr. Pirondini conveyed Parent’s interest in a potential business combination transaction with Encore. Mr. Jones informed Mr. Pirondini that if Parent wished to submit a business combination proposal to Encore, it could do so on the basis of publicly available information. Encore common stock closed trading on November 7, 2023 at $182.80 per share.
On November 13, 2023, Mr. Jones received a revised written non-binding indication of interest letter from Party A for the acquisition of Encore, which included an increased purchase price of  $207 in cash per share of Encore common stock. Copies of the revised written non-binding indication of interest letter were shared with the other Encore directors. Mr. Jones and Mr. Eckert reviewed the revised offer from Party A individually with each Encore director and all Encore directors were aligned that the revised offer continued to substantially undervalue Encore and was not a basis on which the Board was prepared to engage further with Party A. Accordingly, Mr. Jones sent Party A’s Chief Executive Officer an email to that effect on November 15, 2023. Encore common stock closed trading on November 13, 2023 at $186.76 per share and on November 15, 2023 at $200.36 per share.
After additional communications by email between Mr. Jones and Party A’s Chief Executive Officer, and at Party A’s request, on each of November 29, 2023 and December 6, 2023, representatives of J.P. Morgan telephonically discussed with representatives of Party A’s financial advisor Party A’s most recent proposed offer price of  $207 in cash per share of Encore common stock and the Board’s continuing view that this offer substantially undervalued Encore. The representatives of J.P. Morgan further communicated to the representatives of Party A’s financial advisor during these calls that if Party A were to provide the Board with a compelling proposal in connection with a potential business combination transaction with Encore, the Board would carefully consider it. Party A did not submit any additional business combination proposals to Encore, nor did Party A seek to further engage with Encore regarding a potential business combination transaction.
On November 30, 2023, Mr. Jones and Mr. Eckert met in person with Mr. Pirondini at Encore’s offices. The meeting was arranged at Mr. Pirondini’s request. At that meeting, Mr. Pirondini reviewed Parent’s strategic rationale for a potential business combination transaction with Encore. Mr. Jones informed Mr. Pirondini that the Board and Encore management remained focused on executing on Encore’s strategic plan, but that if Parent wished to submit a business combination proposal to Encore, it could do so on the basis of publicly available information.
On December 20, 2023, Mr. Jones received a written non-binding proposal for the acquisition of Encore from Parent (the “December 20 Proposal”). Among other things, the December 20 Proposal stated Parent’s belief that based on publicly available information and subject to satisfactory completion of due diligence, Parent would be able to offer Encore stockholders a purchase price of between $230 and $235 in cash per share of Encore common stock. The December 20 Proposal also proposed as next steps the negotiation and execution of a customary confidentiality agreement between Parent and
 
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Encore. Copies of the December 20 Proposal were shared with the other Encore directors. Encore common stock closed trading on December 20, 2023 at $214.95 per share.
On December 21, 2023, Encore held a special meeting of the Board telephonically and in person at Encore’s offices, with representatives of each of O’Melveny and Akin and members of Encore management present. Mr. Jones reviewed for the Board both his November 30, 2023 meeting with Mr. Pirondini as well as the December 20 Proposal. The Board engaged in a discussion regarding the December 20 Proposal, including potential responses to Parent and other considerations related to the December 20 Proposal. Following this discussion, the Board instructed Encore management to communicate to Parent that Encore was willing to hold a management presentation with Parent and, pursuant to a confidentiality agreement to be entered into between Parent and Encore, provide to Parent certain high level due diligence information, including financial projections, for the express purpose of encouraging Parent to increase the purchase price range contained in the December 20 Proposal.
On December 28, 2023, Mr. Jones and Massimo Battaini (“Mr. Battaini”), the Chief Executive Officer of Parent, telephonically discussed the December 20 Proposal. During this discussion, pursuant to instructions provided by the Board, Mr. Jones communicated to Mr. Battaini that the Board was not willing to transact at the price range included in the December 20 Proposal, but in order to help Parent increase its proposed offer price, Encore was willing to provide certain high level diligence information to Parent, subject to the parties first entering into a customary confidentiality agreement.
On January 2, 2024, Parent sent a draft confidentiality agreement regarding the potential business combination transaction, which included a customary standstill provision, to representatives of Encore. Subsequently, representatives of Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), outside legal counsel to Parent, and O’Melveny negotiated and finalized the terms of the confidentiality agreement and it was executed by Parent and Encore on January 9, 2024 (such confidentiality agreement, the “Parent Confidentiality Agreement”).
Following entry into the Parent Confidentiality Agreement, the parties coordinated for a site visit at Encore’s facilities in McKinney, Texas as well as a management presentation, both to be held on January 23, 2024.
On January 16, 2024, Encore held a special meeting of the Board in person at Encore’s offices, with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. Mr. Jones reviewed for the Board the developments since the December 21, 2023 Board meeting with respect to Party A and Parent. Mr. Jones noted for the Board that there had been no further outreach from Party A. With regard to Parent, Mr. Jones noted that an Encore management presentation and a site visit of Encore’s facilities in McKinney, Texas had been scheduled for January 23, 2024. Mr. Eckert reviewed for the Board projections of Encore’s future financial performance for fiscal years 2024 through 2026 prepared by Encore management (the “Initial Financial Projections”), including each of the key assumptions and inputs used by Encore management in preparing the Initial Financial Projections, as well as the rationale for such assumptions. Mr. Eckert also noted for the Board that Encore had not historically prepared financial projections due to the inherent uncertainty in future copper market prices and future sale levels for Encore’s copper wire. Representatives of J.P. Morgan reviewed for the Board certain financial considerations relating to the December 20 Proposal and certain publicly available market data relating to Encore and Parent. The representatives of J.P. Morgan also reviewed for the Board information regarding potential additional third parties that the Board could consider outreach to in order to determine if such other third parties were interested in making a potential business combination proposal to Encore on terms more favorable than those offered by Parent. The representatives of J.P. Morgan expressed their view to the Board that due to Encore’s size, the nature of its business, and the cost and availability of debt financing, there may be limited interest by other third parties. The representatives of J.P. Morgan further advised that based on J.P. Morgan’s preliminary leveraged finance analysis, utilizing the Initial Financial Projections and considering the cost and availability of debt financing, J.P. Morgan believe that it would be challenging for financial sponsors to make a competitive proposal to Encore. The representatives of J.P. Morgan also discussed with the Board the potential risks to Encore in performing a limited market check, noting that a leak could adversely impact Parent’s willingness to continue to engage with Encore and could also damage Encore’s relationships with its key stakeholders. The representative of O’Melveny then reviewed for the
 
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Board its fiduciary duties in connection with a potential business combination transaction. The Board adopted the Initial Financial Projections and authorized and directed (i) Encore management to share the Initial Financial Projections with Parent in connection with the management presentation and (ii) J.P. Morgan to use the Initial Financial Projections in connection with its financial analyses. The Board also approved the Encore management presentation and site visit by Parent at Encore’s facilities in McKinney, Texas and authorized and directed Encore management to continue to engage with Parent, including by sharing certain phase one due diligence information requested by Parent. Encore common stock closed trading on January 16, 2024 at $211.59 per share.
On January 23, 2024, representatives of Parent conducted a site visit of Encore’s facilities in McKinney, Texas. Later that day, members of Encore management, with representatives of J.P. Morgan present, conducted a management presentation with representatives of Parent, during which, pursuant to instructions provided by the Board, the Initial Financial Projections were provided to Parent.
On February 2, 2024, Mr. Jones received a revised written non-binding proposal for the acquisition of Encore from Parent (the “February 2 Proposal”). Among other things, the February 2 Proposal stated Parent’s belief that based on publicly available information, the phase one due diligence information it had reviewed to date and subject to satisfactory completion of due diligence, Parent would be able to offer Encore stockholders a purchase price of  $240 in cash per share of Encore common stock. The February 2 Proposal also proposed as next steps that Encore provide Parent with a five-week period of exclusivity in order to complete required due diligence and finalize a definitive agreement relating to a potential business combination. Copies of the February 2 Proposal were shared with the other Encore directors. Encore common stock closed trading on February 2, 2024 at $231.74 per share.
On February 7, 2024, Encore held a special meeting of the Board in person at Encore’s offices, with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. Mr. Jones reviewed for the Board the developments with Parent since the January 16, 2024 Board meeting, including a summary of the Encore management presentation and site visit of Encore’s facilities in McKinney, Texas conducted on January 23, 2024. Mr. Jones then reviewed for the Board the content of the February 2 Proposal. Representatives of J.P. Morgan reviewed for the Board certain preliminary financial analyses prepared by J.P. Morgan relating to the February 2 Proposal. The representatives of J.P. Morgan noted that in order to prepare their preliminary financial analyses, they had requested that Encore management extend the Initial Financial Projections for an additional seven years (to 2033) by extrapolating from the Initial Financial Projections based on certain assumptions made by Encore management with respect to the pricing of copper and aluminum, expectations for revenue growth and expectations for gross margin. We refer to the projections prepared by Encore management for years 2027 to 2033 as the “Management Extrapolations”. Mr. Jones and Mr. Eckert then reviewed for the Board the key assumptions and inputs used by Encore management in preparing the Management Extrapolations, and the rationale for such assumptions, as well as noted for the Board the inherent uncertainty in future copper and aluminum market prices. The representatives of J.P. Morgan also reviewed for the Board the further analysis undertaken by J.P. Morgan regarding the prospects for other third parties to make a business combination proposal to Encore on terms more favorable than the February 2 Proposal and expressed their view that no other potential acquiror would be able to do so. The representative of O’Melveny then reviewed for the Board its fiduciary duties in connection with a potential business combination transaction, as well as certain regulatory considerations in connection with a potential business combination transaction with Parent. At the request of Mr. Jones, the representative of O’Melveny also reviewed for the Board a letter received from J.P. Morgan describing certain past investment banking, commercial banking and other financial services it had provided to Encore, Parent and Party A. The Board, together with representatives of each of J.P. Morgan and O’Melveny, engaged in a discussion regarding the February 2 Proposal, including Parent’s request for exclusivity, including potential responses to Parent, as well as whether to conduct a limited market check and the associated risks of conducting a limited market check. The Board authorized and directed Encore management to communicate to Parent a counterproposal consisting of  (i) an increase of the proposed offer price from $240 in cash per share of Encore common stock to $245 in cash per share of Encore common stock and (ii) a $15 special dividend per share of Encore common stock to be paid by Encore to Encore stockholders out of Encore’s cash balance sheet prior to the closing of any business combination transaction with Parent. Encore common stock closed trading on February 7, 2024 at $230.21 per share.
 
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On February 9, 2024, pursuant to instructions provided by the Board, Mr. Jones telephonically informed Mr. Battaini that Encore would be prepared to move forward with the due diligence process and enter into a four-week period of exclusivity with Parent if Parent made certain improvements to the February 2 Proposal including (i) increasing the proposed offer price to a minimum of  $260 per share of Encore common stock (which Mr. Jones communicated was the minimum price per share the Board expected), with the option of bifurcating that into (a) $245 in cash per share of Encore common stock, plus (b) a $15 special dividend per share of Encore common stock and (ii) proposing a reverse termination fee payable to Encore in the event of a failure to obtain regulatory approval (a “reverse termination fee”) in a customary amount for transactions similar to the potential business combination transaction. Following this discussion, Mr. Jones emailed Mr. Battaini Encore’s written counterproposal on the terms previously communicated to Mr. Battaini. Encore common stock closed trading on February 9, 2024 at $244.31 per share.
On February 16, 2024, Mr. Battaini telephonically informed Mr. Jones that Parent’s board of directors would meet in the coming days to discuss Encore’s counterproposal and the possibility of increasing the proposed offer price to $250 in cash per share of Encore common stock. Mr. Battaini objected to the inclusion of any special regulatory provisions in the business combination transaction and reiterated to Mr. Jones Parent’s desire to enter into five weeks of exclusivity with Encore in order to complete required due diligence and finalize a definitive agreement. Encore common stock closed trading on February 16, 2024 at $227.17 per share.
On February 20, 2024, Mr. Jones received an email from Mr. Battaini confirming in writing Parent’s revised non-binding proposal of  $250 in cash per share for all of the outstanding shares of Encore common stock (the “February 20 Proposal”), which Mr. Battaini had previously communicated to Mr. Jones on February 16, 2024. At this time, Parent did not propose a reverse termination fee, but did state its expectation that there would not be any significant regulatory hurdles to obtaining regulatory clearance for the business combination transaction and that Parent would not expect to be required to agree to any potential remedial actions in order to obtain such clearances. Copies of the February 20 Proposal were shared with the other Encore directors. Encore common stock closed trading on February 20, 2024 at $219.19 per share.
On February 21, 2024, Encore held a special meeting of the Board in person at Akin’s offices with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. The Board engaged in a discussion regarding the February 20 Proposal, including potential responses to Parent, as well as the current regulatory environment for strategic transactions. The representatives of J.P. Morgan reiterated to the Board their view that no other strategic bidder or financial sponsor would likely be able to be competitive with the February 20 Proposal. Representatives of J.P. Morgan also reviewed for the Board certain preliminary financial analyses relating to the February 20 Proposal based on the Initial Financial Projections and the Management Extrapolations. Following this discussion, the Board authorized and directed Encore management to communicate to Parent a counterproposal to the February 20 Proposal consisting of  (i) an increase in the proposed offer price from $250 in cash per share of Encore common stock to $255 in cash per share of Encore common stock, (ii) a reasonable best efforts standard for the regulatory review process, with the exception that Parent would not be required to agree to any divestitures in order to obtain any required regulatory clearances for the proposed business combination transaction and (iii) a reverse termination fee of $250 million. The Board also authorized Encore management to, subject to Parent’s acceptance of Encore’s counterproposal, agree to up to five weeks of exclusivity with Parent. Encore common stock closed trading on February 21, 2024 at $218.47 per share. Supported by members of Encore management and based on the information available to it, the Board also accepted the guidance provided by J.P. Morgan that proceeding with a market check at that time could potentially be counterproductive and that the risks of doing so outweighed the benefits.
On February 23, 2024, pursuant to instructions provided by the Board, Mr. Jones telephonically informed Mr. Battaini that Encore would be prepared to move forward with the due diligence process and enter into a period of exclusivity with Parent if Parent made certain improvements to the February 20 Proposal including (i) increasing the proposed offer price from $250 in cash per share of Encore common stock to $255 in cash per share of Encore common stock and (ii) based on the discussion between Parent’s and
 
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Encore’s respective regulatory legal counsel, a “reasonable best efforts” standard in connection with regulatory efforts and agreeing to a reverse termination fee of  $250 million. Later that same day, Mr. Jones emailed Mr. Battaini Encore’s written counterproposal on the terms previously communicated to Mr. Battaini. Encore common stock closed trading on February 23, 2024 at $220.41 per share.
On February 28, 2024, at the request of Mr. Battaini, Messrs. Battaini, Jones and Eckert telephonically discussed Encore’s February 23, 2024 response, including the amount of the proposed reverse termination fee.
On March 1, 2024, Mr. Jones received an email from Mr. Battaini communicating that Parent was (i) willing to proceed on the basis of a proposed offer price of  $255 in cash per share of Encore common stock and a “reasonable best efforts” standard in connection with regulatory efforts, with the exception that Parent would not be required to agree to any divestitures in order to obtain any required regulatory clearances, but that the reverse termination fee should be $140 million. Encore common stock closed trading on March 1, 2024 at $241.57 per share.
On March 4, 2024, Mr. Jones telephonically communicated to Mr. Battaini that if Parent could agree to a reverse termination fee of  $180 million, Mr. Jones would present that proposal to the Board. Mr. Battaini subsequently confirmed Parent’s willingness to proceed on the basis of a reverse termination fee of $180 million and communicated that such amount was the highest Parent was willing to accommodate.
On March 4, 2024, Encore held a special meeting of the Board telephonically with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. The Board engaged in a discussion regarding Parent’s recent proposal of a reverse termination fee of  $180 million, including potential responses to Parent and other considerations related to the proposal. Following this discussion, based on the proposed offer price of  $255 in cash per share of Encore common stock and a reverse termination fee of  $180 million, the Board approved moving forward with the due diligence process and entering into up to five weeks of exclusivity with Parent. Encore common stock closed trading on March 4, 2024 at $234.59 per share.
On March 5, 2024, a representative of O’Melveny sent a draft exclusivity agreement regarding the potential business combination transaction to representatives of Wachtell Lipton. Representatives of each of Wachtell Lipton and O’Melveny negotiated and finalized the terms of the exclusivity agreement, which provided for a four-week period of exclusivity with the right for a one-week extension at Parent’s option, and it was executed by Parent and Encore on March 8, 2024 (such exclusivity agreement, the “Parent Exclusivity Agreement”).
Beginning on March 16, 2024, certain representatives of each of Parent, Wachtell Lipton and financial advisor to Parent, Goldman Sachs (“Goldman Sachs”), were provided access to an electronic dataroom containing certain non-public financial information regarding Encore.
On March 20, 2024, a representative of O’Melveny sent a draft merger agreement regarding the potential business combination transaction to representatives of Wachtell Lipton. The draft merger agreement, among other things, included a “go-shop” provision, proposed an overall end date construct of nine months, and required Encore to pay Parent a two-tiered termination fee in certain circumstances.
On March 28, 2024, a representative of each of J.P. Morgan and Goldman Sachs telephonically discussed the recent increase in the trading price of Encore common stock and the representative of J.P. Morgan conveyed to the representative of Goldman Sachs that in light of such increase, the proposed offer price of  $255 in cash per share of Encore common stock represented a low premium and would likely no longer be acceptable to the Board. Encore common stock closed trading on March 28, 2024 at $262.78 per share.
On March 29, 2024, a representative of Wachtell Lipton sent a revised draft of the merger agreement to representatives of O’Melveny. The revised draft of the merger agreement, among other things, (i) removed the “go-shop” provision and replaced it with a “window-shop” provision, (ii) increased the amount of the two-tiered termination fee Encore would be required to pay Parent in certain circumstances, (iii) expanded the scope of actions requiring Parent’s consent during the period between signing and closing and (iv) extended the overall end date construct, from nine months to eighteen months. Later that same day,
 
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representatives of each of O’Melveny and Wachtell Lipton telephonically discussed the revised draft of the merger agreement sent by representatives of Wachtell Lipton.
On April 4, 2024, a representative of Wachtell Lipton sent representatives of O’Melveny written confirmation of Parent’s election to extend the term of the Parent Exclusivity Agreement through April 12, 2024.
Also on April 4, 2024, a representative of O’Melveny sent a revised draft of the merger agreement and a draft of the Encore disclosure letter (as defined below in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Conduct of Business Pending the Merger” beginning on page 72) to representatives of Wachtell Lipton. The revised draft of the merger agreement, among other things, (i) reinserted the “go-shop” provision, (ii) decreased the amount of the two-tiered termination fee Encore would be required to pay Parent in certain circumstances and (iii) reverted to an overall outside date construct of nine months.
Between April 5, 2024 and April 7, 2024, Mr. Jones spoke individually with each Encore director, updated them on the status of negotiations with Parent and sought and received support from the Board for Mr. Jones to communicate to Parent that (i) Encore expected to report financial results for the first calendar quarter of 2024 that would exceed the Initial Financial Projections and (ii) given the recent increase in the trading price of Encore common stock, an offer price of  $255 in cash per share was no longer acceptable to the Board, and accordingly, Parent would have to increase its proposed offer price in order for the parties to continue to engage in discussions regarding a business combination transaction.
On April 8, 2024, representatives of Wachtell Lipton sent a revised draft of the merger agreement and a revised draft of the Encore disclosure letter to representatives of O’Melveny. The revised draft of the merger agreement, among other things, (i) accepted the “go-shop” concept, but decreased the duration of the “go-shop” period, (ii) increased the amount of the two-tiered termination fee Encore would be required to pay Parent in certain circumstances, and (iii) extended the overall end date from nine months to eighteen months.
On April 9, 2024, Messrs. Jones, Eckert, Battaini and Pier Francesco Facchini, Chief Financial Officer and Executive Director of Parent, met telephonically to discuss the potential business combination transaction as well as Encore’s expected financial results for the first calendar quarter of 2024. Mr. Jones informed Mr. Battaini that in light of the recent increase in the trading price of Encore common stock, the proposed offer price of  $255 in cash per share of Encore common stock would no longer be acceptable to the Board. Mr. Battaini communicated that he was planning to meet with the board of directors of Parent that evening and would convey that message. The parties also discussed additional diligence requests from Parent necessary for Parent to further refine its synergies analysis in order to potentially increase its offer price to Encore. Encore common stock closed trading on April 9, 2024 at $261.11 per share.
In the morning of April 10, 2024, Mr. Jones received a revised written non-binding proposal for the acquisition of Encore from Parent (the “April 10 Proposal”). Among other things, the April 10 Proposal (i) increased the proposed offer price from $255 in cash per share of Encore common stock to $285 in cash per share of Encore common stock, (ii) stated that the overall end date would need to be eighteen months after the date of the merger agreement, (iii) set forth certain outstanding due diligence requests of Parent and (iv) stated Parent’s expectation that the draft merger agreement be finalized on terms consistent with the draft provided by Wachtell Lipton on April 8, 2024 and that the parties enter into the merger agreement by April 13, 2024. Copies of the April 10 Proposal were shared with the other Encore directors. Encore common stock closed trading on April 10, 2024 at $258.30 per share.
On the morning of April 11, 2024, Messrs. Jones, Eckert and Battaini met telephonically to discuss the potential business combination transaction. Mr. Jones communicated to Mr. Battaini that the Board was meeting later that day to discuss the April 10 Proposal. He then communicated to Mr. Battaini that he believed if Parent were to increase the proposed offer price to $300 in cash per share of Encore common stock, the Board would be supportive of such proposal. Mr. Jones also communicated that he understood that signing a definitive merger agreement in the coming days was a meaningful deadline for
 
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Parent and that if Parent were to increase the proposed offer price, the parties could finalize the definitive documentation and close out any open due diligence items expeditiously in order to meet that deadline. Mr. Battaini then communicated to Mr. Jones that the proposed offer price of  $285 in cash per share of Encore common stock was as high as the board of directors of Parent was willing to offer and asked Mr. Jones to convey that message to the Board.
In the afternoon of April 11, 2024, Encore held a special meeting of the Board with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. Mr. Jones updated the Board regarding developments in the negotiations with Parent, including the discussion he had earlier that day with Mr. Battaini. At Mr. Jones’s request, representatives of J.P. Morgan reviewed for the Board certain preliminary financial analyses relating to the April 10 Proposal based on the Financial Projections (as defined below). Representatives of J.P. Morgan and Mr. Eckert then reviewed for the Board certain updates that had been made by Encore management to the Initial Financial Projections in connection with performing J.P. Morgan’s discounted cash flow analysis, including certain updates to the first quarter of 2024 projections to reflect actual first quarter results and to the second quarter of 2024 projections to reflect current expectations of Encore management (the “Q1/Q2 Updates”, and together with the Initial Financial Projections and the Management Extrapolations, the “Financial Projections”). The representative of O’Melveny then reviewed for the Board its fiduciary duties in connection with a potential business combination transaction with Parent and a presentation summarizing the material terms of the draft of the merger agreement received from Parent on April 8, 2024, including the representations and warranties, interim operating covenants and certain exceptions, certain restrictions on the ability of the Board to solicit competing proposals as well as exceptions to those restrictions, contemplated closing conditions, termination provisions and the terms of a guaranty by a credit worthy domestic subsidiary of Parent for Parent’s payment obligations under the merger agreement. The representative of O’Melveny also noted for the Board which terms remained under negotiation by the parties and recommendations from management and Encore’s advisors for how to resolve the remaining open points, including, with respect to the “End Date” concept in the merger agreement, by incorporating into the merger agreement a “ticking fee” construct pursuant to which Parent would be required to provide Encore stockholders with additional consideration if the merger was not consummated within a certain time period after the date of the merger agreement. The Board engaged in a discussion regarding the April 10 Proposal, including potential responses to Parent, the presentations made by the representatives of each of J.P. Morgan and O’Melveny and the status of negotiations with Parent, including certain process and timing considerations. Following this discussion, the Board (i) authorized and approved the Financial Projections and authorized J.P. Morgan to use the Financial Projections in connection with its financial analyses, (ii) authorized and directed Mr. Jones and Mr. Eckert to negotiate with Parent to improve the proposed offer price of  $285 in cash per share of Encore common stock and (iii) authorized and directed Mr. Jones and Mr. Eckert and Encore’s advisors to negotiate with Parent to reach a final agreement on the terms of the draft merger agreement and the Encore disclosure letter, consistent with the recommendations reviewed for the Board by O’Melveny. Encore common stock closed trading on April 11, 2024 at $260.45 per share.
Later that same day, pursuant to instructions provided by the Board, a representative of O’Melveny sent a revised draft of the merger agreement and a revised draft of the Encore disclosure letter to representatives of Wachtell Lipton. The revised draft of the merger agreement, among other things, (i) increased the duration of the “go-shop” period, (ii) decreased the amount of the two-tiered termination fee Encore would be required to pay Parent in certain circumstances, (iii) expanded Encore’s flexibility under the interim operating covenants and (iv) added the “ticking fee” construct.
In the morning of April 12, 2024, Mr. Battaini and Mr. Jones met telephonically to discuss the potential business combination transaction. Mr. Jones communicated to Mr. Battaini that the Board had met the previous evening to discuss the April 10 Proposal and Mr. Jones communicated the request that Parent increase its proposed offer price to $292.50 in cash per share of Encore common stock. This counterproposal of  $292.50 in cash per share of Encore common stock reflected the midpoint between the April 10 Proposal and Encore’s prior proposed counterproposal of  $300 in cash per share of Encore common stock. Encore common stock closed trading on April 12, 2024 at $260.98 per share.
On April 12 and 13, 2024, representatives of O’Melveny and Wachtell Lipton exchanged multiple drafts of the merger agreement and Encore disclosure letter, pursuant to which the parties narrowed the remaining open points from the drafts circulated by O’Melveny on April 11, 2024.
 
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On April 13, 2024, Mr. Battaini and Mr. Jones met telephonically to discuss the potential business combination transaction. During this discussion they agreed to a final proposed offer price of  $290.00 in cash per share of Encore common stock.
During the evening of April 13, 2024 and the morning of April 14, 2024, representatives of each of Wachtell Lipton and O’Melveny finalized the draft of the merger agreement and the Encore disclosure letter. On the morning of April 14, 2024, execution versions of the merger agreement, the Encore disclosure letter and the other ancillary documents were prepared by the parties and circulated to the Board.
In the afternoon of April 14, 2024, Encore held a special meeting of the Board with representatives of each of O’Melveny, J.P. Morgan and Akin and members of Encore management present. Mr. Jones updated the Board regarding developments in the negotiations with Parent, including that Parent had agreed to increase the proposed offer price from $285 in cash per share of Encore common stock to $290.00 in cash per share of Encore common stock. Representatives of J.P. Morgan reviewed for the Board its financial analyses relating to the Base Consideration of  $290.00 in cash per share of Encore common stock. Representatives of J.P. Morgan also reviewed for the Board J.P. Morgan’s recommendations for implementation of the go-shop process as permitted by the merger agreement and J.P. Morgan’s recommended list of third parties to approach during such go-shop process. At the request of the Board, representatives of J.P. Morgan, as financial advisor to Encore, rendered an oral opinion to the Board, subsequently confirmed by delivery of a written opinion, dated April 14, 2024, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, as of April 14, 2024, the Base Consideration of  $290.00 to be paid to Encore stockholders in the Merger is fair to such stockholders from a financial point of view. See the section entitled “— Opinion of J.P. Morgan Securities LLC” beginning on page 49 of this Proxy Statement. The representative of O’Melveny summarized the fiduciary duties of the Board in the context of the proposed transaction and then reviewed for the Board a presentation summarizing the substantive revisions to the execution versions of the merger agreement and the Encore disclosure letter against the drafts of the merger agreement and the Encore disclosure letter reviewed by the Board at its meeting on April 11, 2024. The Board engaged in a discussion and considered the various factors that impacted its evaluation and decision regarding the proposed business combination transaction with Parent, including the material factors set forth below in the section entitled “— Recommendation and Reasons for the Merger” beginning on page 45 of this Proxy Statement. Following this discussion and receipt of advice and information from members of Encore management and the Board’s financial and legal advisors, the Board unanimously (a) determined that the Merger and the transactions contemplated by the Merger Agreement, including the Merger, were fair to and in the best interests of Encore and Encore stockholders, (b) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (c) authorized and approved the execution, delivery and performance of the Merger Agreement by Encore and (d) recommended the adoption of the Merger Agreement by Encore stockholders and directed that the Merger Agreement be submitted for adoption by Encore stockholders at the Special Meeting. The Board also unanimously authorized, empowered and directed J.P. Morgan to, among other things, engage with (i) those third parties included in J.P. Morgan’s recommended outreach list, as well as any other third parties that J.P. Morgan or Encore management subsequently recommend for outreach, and (ii) any other third parties that may express interest in a potential business combination transaction with Encore following the public announcement of the Merger.
Later that evening on April 14, 2024, Encore, Parent, Merger Sub and Guarantor entered into the Merger Agreement and Encore and Parent issued separate press releases announcing the Merger.
On April 15, 2024 and April 16, 2024, pursuant to instructions provided by the Board, representatives of J.P. Morgan contacted eleven potential buyers approved by the Board, including Party A, to determine whether they might be interested in pursuing a transaction that would be superior to the Merger.
On April 19, 2024, at the request of Mr. Jones and Mr. Eckert, representatives of J.P. Morgan contacted two additional potential buyers to determine whether they might be interested in pursuing a transaction that would be superior to the Merger.
 
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As of 11:59 p.m. Central Time on May 19, 2024 (the No-Shop Period Start Date under the Merger Agreement), twelve of the thirteen potential buyers who had been contacted by representatives of J.P. Morgan had advised representatives of J.P. Morgan that they were not interested in pursuing discussions regarding a potential transaction with Encore that would be superior to the Merger. The remaining potential buyer contacted by representatives of J.P. Morgan did not respond. Aside from the thirteen potential buyers contacted by representatives of J.P. Morgan, no other bona fide potential buyers contacted J.P. Morgan or Encore during the Go-Shop Period to submit an Alternative Proposal.
Recommendation and Reasons for the Merger
Recommendation of the Board
The Board has unanimously: (a) determined that the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of Encore and its stockholders, (b) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (c) authorized and approved the execution, delivery and performance of the Merger Agreement by Encore and (d) recommended the adoption of the Merger Agreement by the Encore stockholders and directed that the Merger Agreement be submitted for adoption by the Encore stockholders at the Special Meeting.
The Board unanimously recommends that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
[MISSING IMAGE: ic_checkmark-pn.gif]
Reasons for the Merger
In evaluating the Merger and reaching its decision, the Board consulted with Encore’s senior management and its legal and financial advisors and considered a number of factors, including the following factors (not in any relative order of importance) that the Board believes support its decision to approve the Merger and adopt the Merger Agreement:

historical information regarding (i) Encore’s business, financial performance and results of operations, (ii) market prices, volatility and trading activity with respect to shares of Encore common stock and (iii) market prices with respect to other industry participants and general market indices;

current information regarding (i) Encore’s business, prospects, financial condition, operations, technology, products, management, competitive position and strategic business goals and objectives, including the three-year financial forecast provided by Encore’s management to the Board and to J.P. Morgan, (ii) market prices with respect to shares of Encore common stock, other industry participants and general market indices, (iii) the price and availability of copper and aluminum and (iv) general economic, industry and financial market conditions;

the prospects and likelihood of realizing superior benefits through remaining an independent company, and the risks associated with remaining an independent company, including (i) the likelihood that Encore’s operating plan could be achieved in the face of macroeconomic, operational and execution risks, (ii) the capital expenditures that would be required to maintain or enhance Encore’s competitive position, (iii) the price and availability of copper and aluminum and (iv) general risks related to market conditions that could negatively impact Encore’s valuation or reduce the price of Encore common stock;

the relative confidence of the Board in the ability of Encore to achieve its forecasted financial performance;

the fact that Encore’s management at the direction and under the oversight of the Board negotiated vigorously with Parent with respect to price and other terms in the Merger Agreement,
 
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including obtaining a price increase from Parent’s original non-binding proposal of  $230 — $235 per share, to the Base Consideration of  $290.00 per share plus the potential Additional Consideration;

the Board’s belief that, after negotiations with Parent, the Merger Consideration (including the potential Additional Consideration) in cash provided for in the Merger Agreement is in the best interests of Encore and Encore stockholders and represents the highest per share consideration reasonably attainable;

the fact that the Base Consideration of  $290.00 per share represents a premium of approximately 20% to the volume-weighted average price (the “VWAP”) of a share of Encore common stock over the 30-day period ending April 12, 2024 (the last trading day prior to Encore’s entry into the Merger Agreement), and a premium of approximately 29% to the VWAP of a share of Encore common stock over the 90-day period ending April 12, 2024;

the fact that the consideration payable under the Merger Agreement is an all cash amount (i) which will not be reduced if the share price of Encore common stock declines prior to the Effective Time and (ii) which provides certainty of value and liquidity immediately upon the consummation of the Merger, while eliminating the effect of long-term business and execution risk to Encore stockholders, compared to continuing to operate Encore as an independent company;

the fact that the Additional Consideration increases the Merger Consideration payable to Encore stockholders in the event that the Merger is not consummated within twelve months following the date of the Merger Agreement;

the fact that the Board considered the financial analyses presented by representatives of J.P. Morgan at the Board meeting on April 14, 2024, as well as the oral opinion delivered by J.P. Morgan to the Board on April 14, 2024, which was subsequently confirmed by delivery of J.P. Morgan’s written opinion to the Board, dated April 14, 2024, to the effect that, as of the date of such opinion, and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, it was the opinion of J.P. Morgan that the Base Consideration to be paid to Encore stockholders in the Merger was fair, from a financial point of view, to such holders, as further described in the section of this Proxy Statement entitled “— Opinion of J.P. Morgan Securities LLC” beginning on page 49. The full text of the written opinion of J.P. Morgan, dated April 14, 2024, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, is attached to this Proxy Statement as Annex B and is incorporated herein by reference;

the timing of the Merger and the risk that if Encore did not accept Parent’s offer and enter into the Merger Agreement, it may not have another opportunity to do so or to pursue an opportunity offering at least as much value to Encore stockholders;

the assessment of the Board that none of the possible alternatives to the transactions contemplated by the Merger Agreement (including pursuing a different transaction, and the desirability and perceived risks of those alternatives, as well as the potential benefits and risks to Encore stockholders of those alternatives and the timing and likelihood of effecting such alternatives) was reasonably likely to present superior opportunities for Encore to create greater value for Encore stockholders, taking into account execution risks as well as business, financial, industry, competitive and regulatory risks;

the fact that other potential strategic and financial acquirors would have to incur significant indebtedness, and would potentially have to make significant equity investments, to acquire Encore at a price that would be competitive to the price offered by Parent;

the potential negative consequences to Encore if the Board determined to conduct an auction process for a sale of Encore or a more limited pre-signing market check with respect to Encore, including (i) the potential that the negotiations with Parent would be negatively impacted by an auction process or limited pre-signing market check if an Alternative Proposal from a third party was not received by Encore and (ii) that an auction process or even a limited pre-signing market
 
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check increases the likelihood of leaks and rumors, which could damage Encore’s business and cause Parent to determine not to continue to pursue an acquisition of Encore;

Encore’s right under the Merger Agreement to conduct a post-signing market check during the Go-Shop Period, which began on the date of the Merger Agreement and continues until May 19, 2024, which allows Encore to solicit, initiate, induce, propose, facilitate or encourage any Alternative Proposal or any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal from third parties, including by furnishing third parties with non-public information and affording such third parties access to non-public information related to the business, properties, personnel, assets, books, records and other non-public information of Encore pursuant to acceptable confidentiality agreements, and cooperate with or assist with or facilitate any Alternative Proposal or any proposal, offer, inquiry or request that constitutes or would reasonably be expected to result in or lead to, an Alternative Proposal;

that, under certain circumstances, the Merger Agreement permits Encore to terminate the Merger Agreement in order to enter into a definitive agreement to effect a Superior Proposal with a third party, subject to paying to Parent a termination fee equal to (i) $146.54 million or (ii) the lower amount of  $73.27 million if the Merger Agreement is terminated, subject to certain exceptions, in order to enter into a definitive agreement with a third party from which Encore receives during the Go-Shop Period a written Alternative Proposal that the Board determines in good faith (with such determination to be made no later than the expiration of the Go-Shop Period) and after consultation with Encore’s financial advisors and outside legal counsel, constitutes or would reasonably be expected to result in, a Superior Proposal (an “Excluded Party”);

the Board’s right, under certain circumstances, to withhold, withdraw, qualify or modify or amend, in any manner adverse to Parent or Merger Sub, its recommendation that the Encore stockholders adopt the Merger Agreement;

the likelihood of consummation of the Merger in light of the current regulatory environment, the required regulatory approvals, Parent’s strong commitment to obtain the required regulatory approvals, including Parent’s obligation (subject to the terms of the Merger Agreement) to pay Encore a $180 million termination fee in the event the parties are not able to obtain the required regulatory approvals, and the absence of a requirement for approval of the Merger Agreement by Parent’s shareholders;

the fact that if Parent or Encore terminates the Merger Agreement in connection with a legal restraint issued or granted in respect of the Merger or the other transactions contemplated by the Merger Agreement by a governmental entity pursuant to the HSR Act or other applicable antitrust law or other specified laws or if antitrust clearance of the transactions contemplated by the Merger Agreement or clearance under the specified regulatory approvals are not obtained prior to the End Date, then Parent may be required to pay Encore a $180 million termination fee;

Encore’s ability to obtain specific performance, subject to and as provided in the Merger Agreement, to require Parent and Merger Sub to perform their respective obligations under the Merger Agreement;

the fact that (i) Parent provided to Encore executed debt commitment letters from certain debt financing sources pursuant to which such debt financing sources have committed to lend an aggregate amount of debt financing to Parent and Merger Sub for the purpose of funding the transactions contemplated by the Merger Agreement and (ii) Parent is representing that the aggregate proceeds from such debt financing, together with cash on hand of Parent, will be sufficient to (a) fund all of the amounts required to be provided by Parent and Merger Sub for the consummation of the transactions contemplated by the Merger Agreement, (b) perform all of Parent’s and Merger Sub’s payment obligations under the Merger Agreement, including the payment of the aggregate Merger Consideration and (c) fund the payment of all associated costs and expenses of the Merger;

the fact that Guarantor, a creditworthy subsidiary of Parent located in the United States, has agreed to guarantee the payment obligations of Parent and Merger Sub under the Merger Agreement; and
 
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the availability of appraisal rights to Encore stockholders in connection with the Merger.
In the course of its deliberations, the Board also considered certain risks and other potentially adverse factors concerning the Merger Agreement and the Merger, including (not in any relative order of importance):

that, after the Go-Shop Period (and subject to certain exceptions for any Excluded Party), the Merger Agreement precludes Encore from (i) soliciting, initiating, inducing, proposing, knowingly facilitating or knowingly encouraging the making or submission of, any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, any Alternative Proposal and (ii) engaging in, continuing or otherwise participating in any negotiations or discussions regarding any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal, or furnishing any non-public information regarding Encore or providing access to its properties to any third person relating to any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in, an Alternative Proposal;

that, if the Board effects a Change of Recommendation (as defined in the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — The Board’s Recommendation; Change of Recommendation” beginning on page 79) in connection with an Alternative Proposal, the Merger Agreement permits Parent to terminate the Merger Agreement and obligates Encore to pay Parent a termination fee equal to (i) $146.54 million or (ii) the lower amount of  $73.27 million if such Change of Recommendation is effected in connection with an Alternative Proposal made by an Excluded Party, subject to certain exceptions;

the fact that Encore will no longer exist as an independent public company and Encore stockholders will forego any interest in future increases in its value as an independent public company that might result from its possible growth;

the possible negative effects of the Merger and public announcement of the Merger on Encore’s financial performance, operating results and stock price and Encore’s relationships with its distributors, suppliers, other business partners, management and employees;

the fact that the Merger Agreement imposes restrictions on the conduct of Encore’s business in the pre-closing period, which may adversely affect Encore’s business in the event the Merger is not consummated (including by delaying or preventing Encore from pursuing business opportunities that may arise or precluding actions that would be advisable if Encore were to remain an independent company);

the risks involved with the Merger, the possibility that the Merger might not be consummated (including because of failure to obtain the required regulatory approvals) and Encore’s prospects going forward in the event the Merger Agreement is terminated;

the fact that the consideration to be received by Encore stockholders in the Merger will be taxable for U.S. federal income tax purposes;

the substantial transaction expenses incurred and to be incurred in connection with the Merger and the negative impact of such expenses on Encore’s cash reserves and operating results should the Merger not be consummated;

all known interests of directors and executive officers of Encore in the Merger that may be different from, or in addition to, their interests as Encore stockholders or the interests of the other Encore stockholders generally; and

other risks described in and incorporated by reference in this Proxy Statement, see “Risk Factors” in Encore’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 incorporated by reference herein and the section of this Proxy Statement entitled “Cautionary Statement Regarding Forward-Looking Statements.
The Board concluded that the uncertainties, risks and other potentially adverse factors relevant to 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 Board is not intended to be exhaustive but includes the material factors considered by the Board. In view of the wide variety of factors considered in connection with its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and the complexity of these matters, the 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 Board did not undertake to make any specific determination as to whether, or to what extent, any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its unanimous recommendation on the totality of the information presented, including the factors described above. The explanation of the factors and reasoning set forth above is forward-looking in nature and should be read in light of the risk factors set forth in the section of this Proxy Statement entitled “Cautionary Statement Regarding Forward-Looking Statements.
Opinion of J.P. Morgan Securities LLC
Pursuant to an engagement letter, Encore retained J.P. Morgan as its financial advisor in connection with the proposed Merger.
At the meeting of the Board on April 14, 2024, J.P. Morgan rendered its oral opinion to the Board that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the Base Consideration to be paid to Encore stockholders in the proposed Merger was fair, from a financial point of view, to such holders. J.P. Morgan has confirmed its April 14, 2024 oral opinion by delivering its written opinion to the Board, dated April 14, 2024, that, as of such date, the Base Consideration to be paid to Encore stockholders in the proposed Merger was fair, from a financial point of view, to such holders.
The full text of the written opinion of J.P. Morgan, dated April 14, 2024, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, is attached as Annex B to this Proxy Statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this Proxy Statement is qualified in its entirety by reference to the full text of such opinion. Encore stockholders are urged to read the opinion in its entirety. J.P. Morgan’s opinion was addressed to the Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Merger, was directed only to the Base Consideration to be paid to Encore stockholders in the proposed Merger and did not address any other aspect of the Merger. J.P. Morgan expressed no opinion on the Additional Consideration. J.P. Morgan expressed no opinion as to the fairness of the consideration to be paid in connection with the Merger to the holders of any other class of securities, creditors or other constituencies of Encore or as to the underlying decision by Encore to engage in the proposed Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any Encore stockholder as to how such Encore stockholder should vote with respect to the proposed Merger or any other matter.
In arriving at its opinion, J.P. Morgan, among other things:

reviewed the Merger Agreement;

reviewed certain publicly available business and financial information concerning Encore and the industries in which it operates;

compared the financial and operating performance of Encore with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Encore common stock and certain publicly traded securities of such other companies;

reviewed certain internal financial analyses and forecasts prepared by Encore management relating to its business; and
 
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performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.
In addition, J.P. Morgan held discussions with certain members of Encore management with respect to certain aspects of the Merger, and the past and current business operations of Encore, the financial condition and future prospects and operations of Encore, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.
In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by Encore or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to its engagement letter with Encore, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Encore or Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by Encore management as to the expected future results of operations and financial condition of Encore to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the Merger and the other transactions contemplated by the Merger Agreement will be consummated as described in the Merger Agreement. J.P. Morgan assumed that the representations and warranties made by Encore, Parent and Merger Sub in the Merger Agreement and the related agreements are and will be true and correct in all respects material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to Encore with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on Encore or on the contemplated benefits of the Merger.
The Financial Projections furnished to J.P. Morgan were prepared by Encore management, as discussed more fully under the section of this Proxy Statement entitled “— Certain Financial Projections” beginning on page 53. Encore does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed Merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Encore management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections and other forward-looking statements, please refer to the section of this Proxy Statement entitled “— Certain Financial Projections” beginning on page 53.
J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect such opinion and that J.P. Morgan does not have any obligation to update, revise or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the Base Consideration to be paid to Encore stockholders in the proposed Merger, J.P. Morgan expressed no opinion on the Additional Consideration, and J.P. Morgan expressed no opinion as to the fairness of any consideration paid in connection with the Merger to the holders of any other class of securities, creditors or other constituencies of Encore or the underlying decision by Encore to engage in the Merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed Merger, or any class of such persons relative to the Base Consideration to be paid to Encore stockholders in the proposed Merger or with respect to the fairness of any such compensation.
The terms of the Merger Agreement, including the Base Consideration, were determined through arm’s length negotiations between Encore and Parent, and the decision to enter into the Merger Agreement
 
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was solely that of the Board. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Board in its evaluation of the proposed Merger and should not be viewed as determinative of the views of the Board or Encore management with respect to the proposed Merger or the consideration, including the Base Consideration to be paid to Encore stockholders.
In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the Board on April 14, 2024 and in the financial analyses presented to the Board on such date in connection with the rendering of such opinion. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with rendering its opinion to the Board and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.
Trading Multiples Analysis.   Using publicly available information, J.P. Morgan compared selected financial data of Encore with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be sufficiently analogous to those engaged in by Encore. The companies selected by J.P. Morgan were as follows:

Prysmian S.p.A.

Mueller Industries, Inc.

Nexans S.A.
These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, were considered in its judgment sufficiently similar in certain respects to those of Encore based on business sector participation, operational characteristics and financial metrics. However, none of the selected companies reviewed are identical or directly comparable to Encore and certain of these companies may have characteristics that are materially different from those of Encore. The analysis necessarily involves complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Encore.
Using publicly available information, J.P. Morgan calculated, for each selected company, the ratios of the company’s firm value (“FV”) to the consensus equity research analyst estimates for the company’s adjusted earnings before interest, taxes, depreciation and amortization and after the deduction of stock based compensation (“Adj. EBITDA”) for the year ended December 31, 2024 (“FV / 2024E Adj. EBITDA”).
Based on the results of this analysis and other factors J.P. Morgan considered appropriate based on its experience and professional judgment, J.P. Morgan selected a multiple reference range for FV / 2024E Adj. EBITDA of 6.5x to 9.5x. After applying such range to Encore’s Adj. EBITDA for the year ending December 31, 2024, as provided by Encore management and reflected in the Financial Projections, the analysis indicated the following range of implied per share firm value (rounded to the nearest $0.25) for Encore common stock:
Implied Per Share Firm Value
Low
High
FV / 2024E Adj. EBITDA $ 192.00 $ 263.25
The range of implied per share firm value for Encore common stock was compared to (i) the closing price of Encore common stock of  $260.98 as of April 12, 2024, the last trading day prior to the delivery of J.P. Morgan’s opinion, and (ii) the Base Consideration of  $290.00 per share of Encore common stock.
Discounted Cash Flow Analysis.   J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining an implied fully diluted equity value per share for Encore common stock.
 
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J.P. Morgan calculated the unlevered free cash flows that Encore is expected to generate during the period ranging from April 1, 2024 through December 31, 2033, based upon the Financial Projections prepared by Encore management (as set forth in the section of this Proxy Statement entitled “— Certain Financial Projections” beginning on page 53, which were discussed with, and approved by, the Board for use by J.P. Morgan in connection with its financial analyses). J.P. Morgan also calculated a range of terminal values for Encore at the end of this period by applying terminal growth rates ranging from 1.50% to 2.50%, based on guidance provided by Encore management, to estimates of the unlevered terminal free cash flows for Encore at the end of fiscal year 2033, as provided in the Financial Projections. J.P. Morgan then discounted the unlevered free cash flow estimates and the range of terminal values to present value as of March 31, 2024 using discount rates ranging from 9.00% to 10.00% for Encore, which range was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Encore. The present value of the unlevered free cash flow estimates and the range of terminal values were then adjusted by subtracting Encore’s estimated net debt as of March 31, 2024, as provided by Encore management. Based on the foregoing, this analysis indicated a range of implied per share equity value (rounded to the nearest $0.25) for Encore common stock of  $214.50 to $255.25, which was compared to (i) the closing price of Encore common stock of  $260.98 as of April 12, 2024, the last trading day prior to the delivery of J.P. Morgan’s opinion, and (ii) the Base Consideration of  $290.00 per share of Encore common stock.
Miscellaneous.   The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of Encore. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.
Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary are identical to Encore. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of Encore. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Encore.
As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise Encore with respect to the Merger and deliver an opinion to the Board with respect to the Merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with Encore and the industries in which it operates.
For financial advisory services rendered in connection with the Merger, Encore has agreed to pay J.P. Morgan an estimated fee of  $53 million, $5 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion and the remainder of which is contingent and payable upon the
 
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consummation of the Merger. Encore also previously paid a retainer fee of  $450,000 to J.P. Morgan, which will be credited toward payment of the fee payable upon the consummation of the Merger. In addition, subject to certain limitations, Encore has agreed to reimburse J.P. Morgan for its reasonable and documented out-of-pocket costs and expenses incurred in connection with its services, including the reasonable fees and expenses of outside counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement. During the two years preceding the date of J.P. Morgan’s opinion, neither J.P. Morgan nor its affiliates have had any other material financial advisory or other material commercial or investment banking relationships with Encore. During the two years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with Parent, for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included acting as joint lead arranger on Parent’s credit facilities in June 2022 and June 2023. During the two years preceding the date of J.P. Morgan’s opinion, the aggregate fees recognized by J.P. Morgan from Parent were approximately $1 million. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of Encore and less than 2% of the outstanding common stock of Parent. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of Encore or Parent for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.
Certain Financial Projections
The Company does not as a matter of course make public projections as to future performance, earnings or other results due to the inherent unpredictability of projections and their underlying assumptions and estimates. Despite this general practice, the Company provided to Parent (in connection with its due diligence review) and to J.P. Morgan (in connection with the preparation of its valuation analyses and fairness opinion as described in the section entitled “— Opinion of J.P. Morgan Securities LLC,” beginning on page 49 of this Proxy Statement) certain prospective financial information concerning the Company’s future financial condition and performance. As further described above in the section entitled “— Background of the Merger,” beginning on page 35 of this Proxy Statement, in connection with the Board’s evaluation of a potential business combination transaction with Parent and its evaluation of the Company’s strategic alternatives, Encore management prepared the Initial Financial Projections in early January 2024, which reflected forecasts of the Company’s future financial performance for the fiscal years (“FY”) 2024-2026. Drafts of the Initial Financial Projections were reviewed with the Board during this period, were approved by the Board for presentation to Parent in connection with its due diligence and to J.P. Morgan for use in its preliminary valuation analyses, and were provided by the Company to J.P. Morgan on January 16, 2024 and Parent on January 23, 2024. Subsequently, in early February 2024, upon request by J.P. Morgan in connection with its preliminary financial analyses, Encore management prepared the Management Extrapolations, which extended the Initial Financial Projections for an additional seven fiscal years (FY2027-FY2033) by extrapolating from the Initial Management Projections. Additionally, as described above, the Initial Financial Projections, updated for the Q1/Q2 Updates from April of 2024, and supplemented with the Management Extrapolations are described as the “Financial Projections.” The Financial Projections were not prepared with a view toward public disclosure and the summary thereof is included in this Proxy Statement only because the Financial Projections (i) were made available to the Board in connection with its review of the potential business combination transaction with Parent and its evaluation of strategic alternatives of the Company, (ii) in the case of the Initial Financial Projections, were made available to Parent in connection with its due diligence review and (iii) were used by J.P. Morgan for purposes of preparing its valuation analyses and fairness opinion provided to the Board, as described in the section entitled “— Opinion of J.P. Morgan Securities LLC” beginning on page 49 of this Proxy Statement. The summary of the Financial Projections is not being included in this Proxy Statement to influence any Encore stockholder’s decision whether to vote in favor of the proposal to adopt the Merger Agreement or the other Special Meeting Proposals. The Financial Projections may differ from published analyst estimates and forecasts.
The Financial Projections do not necessarily comply with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts, or generally accepted accounting principles (“GAAP”) (and do not include footnote
 
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disclosures as may be required by GAAP). Neither Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm, nor any other audit firm has audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the Financial Projections and, accordingly, neither EY nor any other audit firm has expressed an opinion or any other form of assurance with respect thereto. The EY report included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which is incorporated by reference in this Proxy Statement, relates to the Company’s historical financial information and does not extend to the Financial Projections and should not be read to do so.
The Financial Projections, while presented with numerical specificity, necessarily were based on numerous variables and assumptions that are inherently uncertain and many of which are beyond the control of Encore management. Because the Financial Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. The assumptions upon which the Financial Projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control, including general economic conditions, competition and the risks discussed in this Proxy Statement under the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 26 of this Proxy Statement. The Financial Projections also reflect the assumptions as to certain business decisions that are subject to change and are susceptible to multiple interpretations and periodic revisions based on actual results, revised prospects for the Company’s business, competitive environment, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated when the Financial Projections were prepared. In addition, the Financial Projections might be affected by the Company’s ability to achieve proposed initiatives, objectives and targets over the applicable periods.
The Financial Projections treat the Company on a stand-alone basis and without giving effect to, and as if the Company never contemplated, the Merger, including the impact of negotiating or executing the Merger Agreement, the expenses that may be incurred in connection with consummating the Merger, the effect of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed or the effect of any business or strategic decisions or actions which would likely have been taken if the Merger Agreement had not been executed but which were instead altered, accelerated, postponed or not taken in anticipation of the Merger.
There can be no assurance that the Financial Projections will be realized, and actual results may vary materially from those shown. The inclusion of the Financial Projections in this Proxy Statement should not be regarded as an indication that the Company or any of its affiliates, advisors, officers, directors or representatives considered or consider the Financial Projections to be predictive of actual future events or events that have occurred since the date of such forecasts, and the Financial Projections should not be relied upon as such. The Company has not updated the Financial Projections to reflect Encore management’s current views of the Company or the Company’s future financial performance and the Financial Projections should not be treated as guidance with respect to the projected results for any period. Neither the Company, Parent nor any of their respective affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ materially from the Financial Projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the Financial Projections to reflect circumstances existing after the date the Financial Projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Financial Projections are shown to be in error. The Company does not intend to make publicly available any update or other revision to the Financial Projections, except as otherwise required by law, and neither the Company, Parent or, after the consummation of the Merger, the Surviving Corporation, undertakes any obligation or otherwise to revise the Financial Projections after the date hereof, except to the extent required by law. Neither the Company, Parent, nor any of their respective affiliates, advisors, officers, directors or representatives has made or makes any representation to any stockholder of the Company or other person regarding the ultimate performance of the Company compared to the information contained in the Financial Projections or that the Financial Projections will be achieved. The Company has made no representation to Parent or its affiliates, in the Merger Agreement or otherwise, concerning the Financial Projections. The Financial Projections are forward-looking statements, and are expressly qualified in their entirety by the risks and uncertainties identified
 
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above and the cautionary statements contained in the Company’s Annual Report on Form 10-K, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by the Company with the SEC from time to time, which are available on the SEC’s website at www.sec.gov.
Certain of the Financial Projections (including Adjusted EBITDA and Unlevered Free Cash Flow) are or may be considered non-GAAP financial measures. There are limitations inherent in non-GAAP financial measures, because they exclude charges and credits that are required to be included in a GAAP presentation. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. Financial measures provided to a financial advisor in connection with a business combination transaction such as the Merger are excluded from the definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Therefore, no reconciliation of non-GAAP financial measures in the Financial Projections to GAAP measures was created or used in connection with preparing the Financial Projections and no such reconciliation of non-GAAP financial measures in the Financial Projections to GAAP measures was relied upon by the Board or J.P. Morgan in connection with their respective evaluations of the Merger.
In light of the foregoing factors and the uncertainties inherent in the Financial Projections, Encore stockholders are cautioned not to place undue, if any, reliance on the Financial Projections. Neither the Company, Parent nor any of their respective affiliates or representatives has made or makes any representation to any person regarding the ultimate performance of the Company compared to the information contained in the Financial Projections.
Certain key material assumptions underlying the Initial Financial Projections included that projected growth of net sales was driven by the following:

a projected volume of net sales for (a) the remainder of FY2024 based on Encore management estimates and (b) FY2025 and FY2026 based on projected year-over-year growth from prior years,

projected commodity pricing based on Encore management estimates of  (a) copper prices based on Commodity Exchange Inc. copper pricing reaching $4.25 by the end of FY2024, increasing to $4.50 by the end of FY2025 and remaining constant through the remaining projection period, and (b) aluminum prices based on the London Metal Exchange projected average aluminum pricing for FY2024 growing at a modest rate through the projected period; and

a projected share of net sales between commercial sales and residential sales holding constant at approximately 70% and 30%, respectively.
Certain key material assumptions underlying the Management Extrapolations were as follows:

projected net sales, based on Encore management estimates, forecasted to decrease from 6% in FY2027 to 2% in the terminal period;

projected gross margins forecasted to normalize to 17% in the terminal period reflecting recent margin abatement and long term through-the-cycle estimates of Encore management; and

projected annual capital expenditures forecasted to decrease from $150 million in FY2026 to $130 million in FY2029 and then to decrease to $110 million in the terminal period.
The following is a summary of the Financial Projections (which summary is not included in this Proxy Statement to induce any Encore stockholder to vote in favor of approving the Merger Agreement Proposal or approving any other proposals to be voted on at the Special Meeting):
($ in millions)
Q2-Q4
FY2024E
FY2025E
FY2026E
FY2027E
FY2028E
FY2029E
FY2030E
FY2031E
FY2032E
FY2033E
Net Sales
$ 2,030 $ 2,979 $ 3,265 $ 3,461 $ 3,645 $ 3,815 $ 3,968 $ 4,100 $ 4,209 $ 4,294
Gross Profit
$ 430 $ 617 $ 670 $ 693 $ 712 $ 726 $ 735 $ 738 $ 737 $ 730
Adj. EBITDA(1)
$ 310 $ 445 $ 485 $ 504 $ 519 $ 527 $ 529 $ 528 $ 522 $ 512
Unlevered Free
Cash Flow(2)
$ 86 $ 134 $ 186 $ 224 $ 245 $ 264 $ 280 $ 291 $ 298 $ 302
 
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(1)
A non-GAAP financial measure, Adjusted EBITDA is defined as adjusted earnings before interest, taxes, depreciation and amortization, post-stock based compensation and excluding interest income and other significant items of a non-recurring and/or non-operational nature.
(2)
A non-GAAP financial measure, Unlevered Free Cash Flow is defined as Adjusted EBITDA less cash taxes, capital expenditures and changes in working capital.
The Financial Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company incorporated by reference into this Proxy Statement.
Interests of the Directors and Executive Officers of Encore in the Merger
In considering the recommendation of the Board that Encore stockholders approve the transaction and vote in favor of the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal, Encore stockholders should be aware that the directors and executive officers of Encore have certain interests in the transactions that are or may be different from, or in addition to, the interests of Encore stockholders generally. The Board was aware of these interests and considered them, among other matters, in approving the Merger Agreement and the transactions contemplated thereby, including the Merger, and in making their recommendation that Encore stockholders adopt the Merger Agreement.
These interests are described in more detail below, and certain of these interests are quantified in the narrative below, including compensation that may become payable in connection with the Merger to Encore’s named executive officers, as described under the section entitled “— Quantification of Payments and Benefits to Encore’s Named Executive Officers — 402(t) Table” ​(which is the subject of the advisory (non-binding) vote of Encore stockholders described in “Proposal 2: Compensation Proposal”). The dates used below to quantify these interests have been selected for illustrative purposes only in accordance with SEC rules and do not necessarily reflect the dates on which certain events will occur.
For purposes of this disclosure, Encore’s executive officers are:

Daniel L. Jones, Chairman, President and Chief Executive Officer, and

Bret J. Eckert, Executive Vice President and Chief Financial Officer.
For purposes of this disclosure, Encore’s non-employee directors are:

Gina A. Norris,

William R. Thomas,

W. Kelvin Walker,

Scott D. Weaver, and

John H. Wilson.
Treatment of Encore Equity Awards
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company RSU Award (or portion thereof) granted prior to the date of the Merger Agreement that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company RSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company RSU Award (or portion thereof).
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the
 
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Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of such Company PSU Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company PSU Award (or portion thereof). For purposes of clause (ii) of the immediately preceding sentence, the total number of shares of Encore common stock subject to a Company PSU Award will be determined in accordance with the applicable award terms; it being understood that if any portion of the Company PSU Award has been earned by its terms based on performance for completed performance periods as of the Effective Time, but has not yet become vested pursuant to any applicable time or service-based vesting requirements, the total number of shares of Encore common stock subject to such Company PSU Award will be based on the number of shares of Encore common stock actually earned based on performance for the completed performance periods.
Immediately prior to the Effective Time, all shares of Encore common stock that are then unvested and subject to an outstanding Company Restricted Stock Award will become fully vested and free of any applicable repurchase or forfeiture conditions.
Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Post-Signing Company RSU Award will no longer represent a right to acquire shares of Encore common stock, will not accelerate in connection with the Merger, and will automatically become a Cash Award with respect to an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Post-Signing Company RSU Award immediately prior to the Effective Time. Each Cash Award will otherwise be subject to substantially the same terms and conditions applicable to the related Post-Signing Company RSU Award as of immediately prior to the Effective Time.
We estimate that the aggregate value of unvested equity awards held by our named executive officers as of September 1, 2024 that would vest, assuming the Closing occurs on such date, is $110,804,360, calculated based on the Base Consideration of  $290.00 per share (without taking into account the Additional Consideration). For additional information, see the section of this Proxy Statement entitled “— Quantification of Payments and Benefits to Encore’s Named Executive Officers — 402(t) Table” beginning on page 58.
None of the non-employee directors of Encore hold any unvested equity awards and neither of the named executive officers holds any unvested Company Option Awards or Company SAR Awards.
Section 280G and 4999 of the Code
Encore may enter into “best net” agreements with respect to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), with one or both of our named executive officers, which agreements would generally provide that, if the executive officer would otherwise be subject to the excise tax under Section 4999 of the Code but the individual would be better off  (on an after-tax basis) if his payments subject to such excise tax were reduced to the extent necessary to avoid such excise tax, then such payments will be reduced to such extent.
Annual Bonuses
Encore may pay annual bonuses for 2024 to the named executive officers in amounts not to exceed their respective 2023 annual bonus amounts and, if the Closing occurs before December 15, 2024, Encore may pay such bonuses (without proration) immediately prior to the Closing. If the Closing occurs after January 1, 2025, Encore may pay annual bonuses for 2025 to its Chief Executive Officer and to its Chief Financial Officer in amounts not to exceed their respective 2023 annual bonus amounts and, if the Closing occurs before December 15, 2025, Encore may pay such bonuses on a pro-rated basis immediately prior to the Closing based on the number of days the individual was employed during 2025, relative to 365 days.
 
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Retention Arrangements
Encore may award transaction and retention bonuses to certain employees, including to the named executive officers, in an aggregate amount not to exceed $15,000,000 (the “Transaction and Retention Bonus Pool”). As of the date of this Proxy Statement, the Board currently expects to award fifty percent (50%) of the Transaction and Retention Bonus Pool as a transaction bonus, to be paid prior to the Closing, to each of Daniel L. Jones, Encore’s Chairman, President and Chief Executive Officer, and Bret J. Eckert, Encore’s Executive Vice President and Chief Financial Officer. However, as of the date of this Proxy Statement, Encore has not made any final decisions on the allocation of the Transaction and Retention Bonus Pool.
Indemnification Insurance
Encore’s directors and executive officers will be entitled to certain ongoing indemnification and coverage for a period of six years following the Effective Time under the directors’ and officers’ liability insurance policies from the Surviving Corporation. This indemnification and insurance coverage is further described in the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Indemnification and Insurance.”
New Compensation Arrangements
As of the date of this Proxy Statement, neither of Encore’s executive officers has (1) reached an understanding on potential employment or other retention terms with the Surviving Corporation or with Parent or Merger Sub; or (2) entered into any definitive agreements or arrangements regarding employment or other retention with the Surviving Corporation or with Parent or Merger Sub to be effective following the consummation of the Merger. However, prior to the Effective Time, Parent or Merger Sub may initiate discussions regarding employment or other retention terms and may enter into definitive agreements regarding employment or retention for Encore’s named executive officers following the consummation of the Merger.
Quantification of Payments and Benefits to Encore’s Named Executive Officers — 402(t) Table
This section and the table below sets forth the information required by Item 402(t) of Regulation S-K regarding the amount of payments and benefits that each of Encore’s named executive officers would receive in connection with the Merger, assuming (i) that the Merger were consummated and each such named executive officer experienced a termination of employment without cause on September 1, 2024 (which is the date we assume the Closing will occur on solely for purposes of this section of this Proxy Statement); (ii) Encore equity awards outstanding as of September 1, 2024; and (iii) a per share price of Encore common stock of  $290.00, which is the per share Base Consideration (without taking into consideration the Additional Consideration). Except as expressly stated otherwise, the calculations in the table below do not attempt to forecast any adjustments in compensation that may occur following the date of this Proxy Statement, including any equity award forfeitures that may occur prior to the Effective Time or any equity awards that, by their terms, vest irrespective of the Merger prior to the Effective Time. As a result of the foregoing assumptions, which may or may not actually occur or be accurate on the relevant date, including the assumptions described in the footnotes to the table, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below. This Merger-related compensation is the subject of the non-binding, advisory vote set forth in “Proposal 2: Compensation Proposal.” For purposes of this disclosure, “single trigger” refers to payments and benefits that arise solely as a result of the completion of the Merger and “double trigger” refers to payments and benefits that require two conditions, which are the completion of the Merger and a qualifying termination of employment.
 
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Name
Cash
($)(1)
Equity
($)(2)
Perquisites /
Benefits
($)(3)
Total
($)
Named Executive Officers (“NEOs”)
Daniel L. Jones
Chairman, President and Chief Executive Officer
15,000,000
62,833,430
77,833,430
Bret J. Eckert
Executive Vice President and Chief Financial Officer
11,250,000
47,970,930
59,220,930
(1)
Encore has not entered into agreements with the named executive officers that would entitle them to any cash severance in connection with a termination of their employment with Encore. Encore may pay each named executive officer an annual bonus for the year in which the Closing occurs, as discussed under “— Annual Bonuses” above. Encore may also pay each named executive officer a transaction or retention bonus from the Transaction and Retention Bonus Pool, as discussed under “— Retention Arrangements” above. As of the date of this Proxy Statement, the Board currently expects to award fifty percent (50%) of the Transaction and Retention Bonus Pool as a transaction bonus, to be paid prior to the Closing, to each of Messrs. Jones and Eckert. For each of the named executive officers, this column reflects (i) one times the named executive officer’s annual bonus amount for 2023 ($7,500,000 for Mr. Jones and $3,750,000 for Mr. Eckert, with no pro-ration of such amounts assuming a Closing date before January 1, 2025), and (ii) fifty percent (50%) of the Transaction and Retention Bonus Pool ($7,500,000 for each named executive officer). All such amounts are “single-trigger.”
(2)
For a description of the treatment of equity awards (including the awards held by the named executive officers) in connection with the Merger, see “— Treatment of Encore Equity Awards” above. Set forth below are the values of each type of unvested Encore equity award held by the named executive officers that would be payable immediately upon the consummation of the Merger (i.e., each of these payments are “single-trigger”). For purposes of this calculation, we have assumed that Company PSU Awards vest based on maximum performance. If the named executive officers’ Company PSU Awards vested based on the target performance levels provided in the award rather than at the maximum levels, the number of shares subject to the Company PSU Awards that would vest would be, for Mr. Jones, 50,000 shares (with a value of  $14,500,000), and for Mr. Eckert, 37,500 shares (with a value of  $10,875,000). Mr. Jones is eligible for “retirement” as such term is defined in the agreements that govern his Encore equity awards, and accordingly, his Encore equity awards are generally considered vested as the awards would not be forfeited if he were to voluntarily terminate employment with Encore. Although his awards are generally considered to be vested by virtue of such retirement provisions, we have included the value of these awards in the table above, and in the equity award detail below in this footnote, as they will become payable to Mr. Jones in connection with the Closing. The named executive officers do not hold any unvested Company Option Awards or Company SAR Awards.
Name
Company
RSU Awards
($)
Company
PSU Awards
($)
Company
Restricted
Stock Awards
($)
Daniel L. Jones
41,083,430 21,750,000
Bret J. Eckert
30,208,430 16,312,500 1,450,000
Total
71,291,860 38,062,500 1,450,000
(3)
The named executive officers would not be entitled to any perquisites or other benefits in connection with the Merger or a termination of their employment with Encore.
Section 16 of the Exchange Act
Prior to the Effective Time, the Board, or an appropriate committee of non-employee directors of the Board, may adopt a resolution consistent with the interpretive guidance of the SEC, so that the
 
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disposition of any of Encore’s equity securities (including derivative securities) pursuant to the Merger Agreement by any officer or director of Encore who is a covered person of Encore for purposes of Section 16 of the Exchange Act will be an exempt transaction for purposes of Section 16 of the Exchange Act.
Financing of the Merger
The obligation of Parent to consummate the Merger is not subject to any financing condition.
We anticipate that the total amount of funds necessary to pay the aggregate Merger Consideration payable to the Encore stockholders in the Merger is approximately $4.8 billion in cash.
In connection with the financing of the Merger, Parent entered into debt commitment letters with the Debt Financing Sources (as such term is defined in the Merger Agreement) party thereto, pursuant to which the Debt Financing Sources party thereto have committed to provide Parent and indirectly, Merger Sub, with the Debt Financing consisting of  (i) an up to EUR 1,000,000,000 equivalent unsecured term loan facility, which can be drawn in U.S. dollars or Euros, and (ii) an up to EUR 2,400,000,000 equivalent unsecured bridge loan facility, which can be drawn in U.S. dollars or Euros (the “Debt Commitment Letters”).
The obligations of the Debt Financing Sources to provide the Debt Financing are subject to certain customary conditions, including (i) the execution and delivery of definitive documentation with respect to the Debt Financing in accordance with the terms and conditions of the Debt Commitment Letters, (ii) the consummation of the Merger in all material respects in accordance with the terms and conditions of the Merger Agreement without giving effect to any modifications, amendments, consents or waivers thereto that are material and adverse to the Debt Financing Sources unless the Debt Financing Sources have given their consent (such consent not to be unreasonably withheld, delayed or conditioned), (iii) the absence of certain breaches of the representations and warranties made by Encore in the Merger Agreement, which are material to the interests of the Debt Financing Sources, and (iv) the absence of a Company Material Adverse Effect.
Each of Parent and Merger Sub has agreed to use their respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to consummate on a timely basis the Debt Financing as contemplated by the Debt Commitment Letters. For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Debt Financing.”
Encore has agreed to use reasonable best efforts to, at Parent’s sole cost and expense, provide customary cooperation that is reasonably requested by Parent or Merger Sub to assist Parent and Merger Sub in connection with their efforts to obtain the Debt Financing or any Alternative Financing. For more information, please see the section of this Proxy Statement entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Cooperation as to Debt Financing.”
Guaranty
Guarantor has agreed to absolutely, unconditionally and irrevocably guarantee, as primary obligor and not as surety, to Encore the due and punctual payment and performance of each of the payment obligations of Parent and Merger Sub, as applicable, under the Merger Agreement. The guaranty is one of payment and performance and not of collection. Guarantor’s obligations under the Merger Agreement are expressly limited to the Guaranteed Obligations and upon the full discharge and performance of all Guaranteed Obligations, Guarantor will no longer have any duties or obligations under the Merger Agreement.
Closing and Effective Time
The Closing will take place on the fourth business day following the satisfaction or waiver of all conditions to the Closing (described below under the section entitled “Proposal 1: Adoption of the Merger Agreement — Terms of the Merger Agreement — Conditions to the Closing of the Merger” beginning on page 90 of this Proxy Statement) (other than those conditions to be satisfied at the Closing) or such other
 
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time agreed to in writing by Parent and Encore. The Merger will become effective at such time as the certificate of merger is duly filed with the Secretary of the State of Delaware or at such later date or time as may be agreed by Encore and Parent and specified in the certificate of merger in accordance with the DGCL.
Accounting Treatment
The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.
Material U.S. Federal Income Tax Consequences of the Merger
The following is a general discussion of certain material U.S. federal income tax consequences of the Merger that may be relevant to U.S. Holders and Non-U.S. Holders (each as defined below) whose shares of Encore common stock are converted into the right to receive cash pursuant to the Merger. This discussion is based upon the Code, Treasury Regulations promulgated under the Code, court decisions and published positions of the Internal Revenue Service (the “IRS”), all as in effect on the date of this Proxy Statement and all of which are subject to change or to differing interpretations at any time, possibly with retroactive effect. Any such change or differing interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax considerations described in this discussion.
This discussion is limited to U.S. Holders and Non-U.S. Holders who hold their shares of Encore common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes). This summary does not describe any tax consequences arising under the laws of any state, local or foreign jurisdiction and does not consider any U.S. federal tax laws other than those pertaining to income taxation (e.g., estate or gift taxation), nor does it address any considerations under any applicable minimum tax or the Medicare net investment income tax. In addition, this discussion does not address any considerations in respect of the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations and administrative guidance promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith and any laws, regulations or practices adopted in connection with any such agreement).
This discussion is for general information purposes only and does not purport to be a complete analysis of all the U.S. federal income tax considerations relating to the Merger. In particular, it does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances nor does it address any consequences to holders subject to special rules under U.S. federal income tax laws, including, for example:

banks and other financial institutions;

mutual funds;

insurance companies;

tax-exempt organizations (including private foundations), governmental agencies, instrumentalities or other governmental organizations and pension funds;

retirement plans, individual retirement accounts and other tax-deferred accounts;

S corporations, partnerships or any other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes (or investors in such entities or arrangements);

controlled foreign corporations, passive foreign investment companies or corporations that accumulate earnings to avoid U.S. federal income tax;

dealers or brokers in securities, currencies or commodities;

traders in securities that elect to use the mark-to-market method of accounting for their securities;

regulated investment companies or real estate investment trusts;
 
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entities subject to the U.S. anti-inversion rules;

U.S. expatriates or certain former citizens or long-term residents of the United States;

holders that own or have owned (directly, indirectly or constructively) five percent or more of the shares of Encore common stock (by vote or value);

holders holding their shares of Encore common stock as part of a hedging, constructive sale or conversion, straddle or other risk reduction or integrated transaction;

holders subject to any applicable minimum tax;

holders subject to special tax accounting rules as a result of any item of gross income with respect to their shares of Encore common stock being taken into account in an “applicable financial statement” ​(as defined in the Code);

holders that received their shares of Encore common stock in a compensatory transaction, through a tax-qualified retirement plan or pursuant to the exercise of options or warrants;

holders that hold their shares of Encore common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;

holders that own an equity interest, actually or constructively, in Parent or the Surviving Corporation following the Merger;

holders exercising appraisal rights with respect to their shares of Encore common stock under Section 262 of the Delaware General Corporation Law; and

U.S. Holders whose “functional currency” is not the U.S. dollar.
If a partnership (including an entity or arrangement, domestic or non-U.S., treated as a partnership for U.S. federal income tax purposes) holds shares of Encore common stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of Encore common stock and partners therein should consult their tax advisors regarding the tax consequences of the Merger.
No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, regarding the U.S. federal income tax consequences of the Merger. No assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS.
THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE TO ANY HOLDER. IT IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER. THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO ANY PARTICULAR HOLDER WILL DEPEND ON THE HOLDER’S PARTICULAR TAX CIRCUMSTANCES. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO THEM IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES UNDER ANY STATE, LOCAL, NON-U.S. OR OTHER TAX LAWS.
U.S. Holders
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of Encore common stock that is, for U.S. federal income tax purposes:

an individual who is a citizen or resident of the United States;

a corporation, or other entity taxable as a corporation, created or organized in, or under the laws of, the United States, any state thereof or the District of Columbia;

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in Section 7701(a)(30) of the Code or
 
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(2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person as defined in section 7701(a)(30) of the Code.
The receipt of cash by a U.S. Holder in exchange for shares of Encore common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. Holder that receives cash in exchange for shares of Encore common stock pursuant to the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the Merger. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the Merger. Long-term capital gains of non-corporate U.S. Holders (including individuals) are generally subject to taxation at reduced rates. The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of Encore common stock at different times or at different prices, such U.S. Holder must determine its tax basis, holding period, and gain or loss separately with respect to each block of Encore common stock.
Non-U.S. Holders
For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of Encore common stock that is neither a U.S. Holder nor a partnership or entity or arrangement treated as a partnership for U.S. federal income tax purposes.
Subject to the discussion under “— Information Reporting and Backup Withholding” below, any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:

the gain is effectively connected with the conduct of a trade or business of such Non-U.S. Holder in the United States (or, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax on a net income basis at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to an additional “branch profits tax” at a rate of 30% (or a lower rate under an applicable income tax treaty);

such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year in which the Merger occurs and certain other specified conditions are met, in which case such gain generally will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty), which gain may be offset by certain U.S. source capital losses of such Non-U.S. Holder provided such Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses and all other requirements are met; or

Encore is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code (“USRPHC”), at any time during the shorter of the five-year period ending on the Closing Date or such Non-U.S. Holder’s holding period with respect to the applicable shares of Encore common stock (the “Relevant Period”) and, if shares of Encore common stock are treated as regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns or has owned, directly or constructively, more than five percent (5%) of Encore common stock at any time during the Relevant Period.
With respect to the third bullet point above (if applicable to a particular Non-U.S. Holder), any gain realized by such Non-U.S. Holder pursuant to the Merger will be subject to U.S. federal income tax on a net basis at rates generally applicable to U.S. persons. Although there can be no assurances in this regard, we believe that we are not, and have not been, a USRPHC at any time during the five-year period preceding the Merger. Non-U.S. Holders are encouraged to consult their tax advisors regarding the possible consequences to them if we are or were a USRPHC.
 
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Information Reporting and Backup Withholding
Information reporting and backup withholding (currently, at a rate of 24%) may apply to the payment of cash consideration pursuant to the Merger. Backup withholding generally will not apply to a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on IRS Form W-9 or a Non-U.S. Holder that provides a certification of such Non-U.S. Holder’s foreign status on IRS Form W-8BEN or IRS Form W-8BEN-E as applicable, or any holder that otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the holder’s U.S. federal income tax liability, provided that the holder timely furnishes the required information to the IRS.
THE FOREGOING DISCUSSION DOES NOT ADDRESS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS. IT IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE, FOREIGN, LOCAL OR OTHER TAX LAWS, OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Regulatory Approvals Required for the Merger
Under the HSR Act, certain transactions, including the Merger, may not be completed until notifications have been submitted to the Antitrust Division of the U.S. Department of Justice (the “DOJ”) and the FTC and all statutory waiting period requirements have been satisfied. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filings of their respective HSR Act notification forms or the early termination of that waiting period. The parties may also choose to voluntarily re-start the initial 30-calendar-day waiting period by following certain prescribed procedures. After the expiration of the initial waiting period (or the re-started initial waiting period), the DOJ or the FTC may issue a Request for Additional Information and Documentary Material (a “Second Request”). If a Second Request is issued, the parties may not complete the Merger until they substantially comply with the Second Request and observe a second 30-calendar-day waiting period, unless the waiting period is terminated earlier or extended by the parties.
Pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the waiting period applicable to the Merger under the HSR Act, has expired or been terminated and any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties have agreed not to consummate the Merger and the transactions contemplated by the Merger Agreement under the HSR Act have expired or have been terminated.
Additionally, pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the clearances and approvals requested by any governmental entity under certain specified laws have been obtained, or any waiting periods relating thereto have expired, in the event that an applicable governmental entity has requested such clearances or approvals be obtained or determined that such waiting periods apply to the Merger and the transactions contemplated by the Merger Agreement.
Each of Parent and Encore filed its respective notification and report form required to be filed pursuant to the HSR Act on April 26, 2024.
At any time before or after the Effective Time, the Antitrust Division or the FTC could take action under the U.S. antitrust laws, including seeking to prevent the Merger, to rescind the Merger or to condition the Merger upon the divestiture of assets of Parent or Encore or subject to other remedies. In addition, U.S. state attorneys general could take action under the antitrust 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 concessions or conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. There can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.
 
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TERMS OF THE MERGER AGREEMENT
The following summarizes the terms of the Merger Agreement. The descriptions of the Merger Agreement in this summary and elsewhere in this Proxy Statement are not complete and are qualified in their entirety by reference to the Merger Agreement, a copy of which is attached to this Proxy Statement as Annex A and incorporated into this Proxy Statement by reference. You should carefully read and consider the entire Merger Agreement, which is the legal document that governs the Merger, because this summary may not contain all of the information about the Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this Proxy Statement.
The representations, warranties, covenants and agreements described below and included in the Merger Agreement (a) were made only for purposes of the Merger Agreement and as of specific dates; (b) were made solely for the benefit of the parties to the Merger Agreement; and (c) may be subject to important qualifications, limitations and supplemental information agreed to by Encore, Parent, Merger Sub and Guarantor in connection with negotiating the terms of the Merger Agreement. In addition, the representations and warranties have been included in the Merger Agreement for the purpose of allocating contractual risk among Encore, Parent, Merger Sub and Guarantor rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Encore stockholders should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of Encore, Parent, Merger Sub and Guarantor 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. In addition, you should not rely on the covenants in the Merger Agreement as actual limitations on the respective businesses of Encore, Parent, Merger Sub and Guarantor, because the parties may take certain actions that are either expressly permitted in the confidential disclosure letters to the Merger Agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The Merger Agreement is described below, and attached as Annex A to this Proxy Statement, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding Encore, Parent, Merger Sub or Guarantor or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding Encore and our business.
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws
The Merger Agreement provides that, in accordance with the DGCL and on the terms and subject to the conditions of the Merger Agreement, at the Effective Time, Merger Sub will merge with and into Encore, the separate existence of Merger Sub will cease and Encore will be the Surviving Corporation and a wholly owned subsidiary of Parent.
Subject to applicable law, prior to the Effective Time, the parties will take all necessary actions so that the directors of Merger Sub as of immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and will hold office until their respective successors are duly elected and qualified, or their earlier death, incapacitation, retirement, resignation or removal, in each case, in accordance with the certificate of incorporation and bylaws of the Surviving Corporation. Prior to the Effective Time, the parties will take all necessary actions so that the officers of Merger Sub as of immediately prior to the Effective Time or such other individuals as designated by Parent prior to the Effective Time will be the initial officers of the Surviving Corporation and will hold office until their respective successors are duly elected and qualified, or their earlier death, incapacitation, retirement, resignation or removal, in each case, in accordance with the certificate of incorporation and bylaws of the Surviving Corporation. At the Effective Time, the certificate of incorporation of Encore as in effect immediately prior to the Effective Time will be amended and restated to read as set forth on Exhibit A to the Merger Agreement and, as so amended and restated, will be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the terms thereof or as provided by applicable law, and the bylaws of Encore as in effect immediately prior to the Effective Time will be amended and restated to read as set
 
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forth on Exhibit B to the Merger Agreement and, as so amended and restated, will be the bylaws of the Surviving Corporation until thereafter amended in accordance with the terms thereof, the certificate of incorporation of the Surviving Corporation or as provided by applicable law.
Closing and Effective Time
The Closing will take place at 8:00 a.m., Central European Time, at the offices of O’Melveny & Myers LLP, 610 Newport Center Drive, 17th Floor, Newport Beach, CA, USA 92660, or remotely by exchange of documents and signatures (or their electronic counterparts) on the fourth business day after the satisfaction or waiver (to the extent permitted by applicable law) of the conditions to the Closing, which are described below in the section of this Proxy Statement entitled “— Conditions to the Closing of the Merger,” ​(other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or at such other place, time and date as Encore and Parent may agree to in writing.
At the Closing, Encore, Parent and Merger Sub will cause a certificate of merger with respect to the Merger to be executed and filed with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL and will make all other filings or recordings required by the DGCL in connection with the Merger. The Merger will become effective at such time as the certificate of merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed to by Encore and Parent and specified in the certificate of merger in accordance with the DGCL.
Merger Consideration
Encore Common Stock
At the Effective Time, by virtue of the Merger and without any action on the party of Encore or the holders of any securities of Encore, each share of Encore common stock outstanding immediately prior to the Effective Time (excluding the Excluded Shares) will be converted automatically into the right to receive, without interest, $290.00 in cash, plus, if applicable, the Additional Consideration, subject to any required tax withholding.
Treatment of Encore Equity Awards
Company RSU Awards Granted Prior to the Date of the Merger Agreement.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company RSU Award (or portion thereof) granted prior to the date of the Merger Agreement that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company RSU Award (or portion thereof) to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company RSU Award (or portion thereof).
Company PSU Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company PSU Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company PSU Award (or portion thereof) to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, together with any accrued and unpaid cash dividends corresponding to such vested Company PSU Award (or portion thereof). For purposes of clause (ii) of the immediately preceding sentence, the total number of shares of Encore common stock subject to a Company PSU Award will be determined in accordance with the applicable award terms; it being understood that if any portion of the Company PSU Award has been earned by its terms based on performance for completed performance
 
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periods as of the Effective Time, but has not yet become vested pursuant to any applicable time or service-based vesting requirements, the total number of shares of Encore common stock subject to such Company PSU Award will be based on the number of shares of Encore common stock actually earned based on performance for the completed performance periods.
Company Option Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company Option Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right of the holder of each such Company Option Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration over the applicable exercise price of such Company Option Award, multiplied by (ii) the number of shares of Encore common stock subject to such Company Option Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the exercise price of any Company Option Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company Option Award will be cancelled without payment and will have no further force or effect.
Company SAR Awards.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Company SAR Award (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right of the holder of each such Company SAR Award to receive (without interest and subject to any applicable withholdings) an amount in cash equal to the product of  (i) the excess, if any, of the Merger Consideration minus the applicable base or strike price of such Company SAR Award, multiplied by (ii) the number of shares of Encore common stock referenced by such Company SAR Award immediately prior to the Effective Time. For the avoidance of doubt, in the event that the base or strike price of any Company SAR Award (whether vested or unvested) is equal to or greater than the Merger Consideration, such Company SAR Award will be cancelled without payment and will have no further force or effect.
Company Restricted Stock Awards.   Immediately prior to the Effective Time, all shares of Encore common stock then unvested and subject to an outstanding Company Restricted Stock Award will become fully vested and free of any applicable repurchase or forfeiture conditions. Such shares of Encore common stock then unvested and subject to an outstanding Company Restricted Stock Award will be treated the same as the outstanding shares of Encore common stock as described in the sections of this Proxy Statement entitled “— Encore Common Stock” and “— Exchange and Payment Procedures.”
Company RSU Awards Granted on or After the Date of the Merger Agreement.   Immediately prior to the Effective Time, and without any action on the part of Parent, Encore or any other person, each Post-Signing Company RSU Award will no longer represent a right to acquire shares of Encore common stock, will not accelerate in connection with the Merger, and will automatically become a Cash Award with respect to an amount in cash equal to the product of  (i) the Merger Consideration, multiplied by (ii) the total number of shares of Encore common stock subject to such Post-Signing Company RSU Award immediately prior to the Effective Time. Each Cash Award will otherwise be subject to substantially the same terms and conditions applicable to the related Post-Signing Company RSU Award as of immediately prior to the Effective Time.
Exchange and Payment Procedures
Before or on the Closing Date, Parent will deposit, or will cause to be deposited, with a U.S. bank or trust company, that will be appointed by Parent to act as a paying agent under the Merger Agreement and reasonably acceptable to Encore (the “Paying Agent”), in trust for the benefit of holders of shares of Encore common stock, cash in U.S. dollars sufficient to pay the aggregate Merger Consideration in exchange for all of the shares of Encore common stock outstanding immediately prior to the Effective Time (other than the Excluded Shares), payable upon due surrender of the certificates that, immediately prior to the Effective Time, represented shares of Encore common stock (or effective affidavits of loss in lieu thereof) or noncertificated shares of Encore common stock represented by book-entry (such cash, the “Exchange Fund”). In the event that the Exchange Fund is insufficient to pay the aggregate Merger
 
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Consideration, Parent will as promptly as reasonably practicable deposit, or cause to be deposited, additional funds with the Paying Agent in an amount that is equal to the shortfall that is required to make such payment.
As soon as reasonably practicable after the Effective Time and in any event not later than the fifth business day following the Closing Date, Parent will cause the Paying Agent to mail to each holder of record of shares of Encore common stock represented by certificates whose shares were converted into the right to receive the Merger Consideration, (A) a letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to certificates will pass, only upon delivery of certificates (or effective affidavits of loss in lieu thereof) to the Paying Agent and will be in such form and have such other provisions as Parent and Encore may mutually reasonably agree), and (B) instructions for use in effecting the surrender of certificates (or effective affidavits of loss in lieu thereof) or book-entry shares in exchange for the Merger Consideration. Upon surrender of certificates (or effective affidavits of loss in lieu thereof) 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 customarily be required by the Paying Agent, the holder of such certificates (or effective affidavits of loss in lieu thereof) will be entitled to receive in exchange therefor an amount in cash equal to the product of  (x) the number of shares of Encore common stock represented by such holder’s properly surrendered certificates (or effective affidavits of loss in lieu thereof) and (y) the Merger Consideration. As soon as reasonably practicable after the later to occur of  (i) the Effective Time, and (ii) to the extent required by the Paying Agent, receipt of an “agent’s message” by the Paying Agent (or such other evidence, if any, of transfer as the Paying Agent may reasonably request), Parent will cause the Paying Agent to issue and deliver to each holder of book-entry shares a check or wire transfer for an amount in cash equal to the product of (x) the number of shares that are represented by such holder’s book-entry shares and (y) the Merger Consideration, in each case, without such holder being required to deliver a certificate or an executed letter of transmittal to the Paying Agent, and such book-entry shares will then be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of certificates (or effective affidavits of loss in lieu thereof) or cancellation of book-entry shares. In the event of a transfer of ownership of shares of Encore common stock that is not registered in the transfer records of Encore, payment of the Merger Consideration upon due surrender of a certificate may be paid to such a transferee if the certificate formerly representing such shares is presented to the Paying Agent in proper form for transfer, accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stamp, stock transfer or similar taxes have been paid or are not applicable. In the case of any certificate that has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, compliance with the procedures set forth in the Merger Agreement, and, if required by Parent, the Surviving Corporation or the Paying Agent, the posting by such person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed certificate a check in the amount of the number of shares of Encore common stock represented by such lost, stolen or destroyed certificate multiplied by the Merger Consideration.
Any portion of the Exchange Fund (including the proceeds of any investments thereof) that, as of the first anniversary of the Effective Time, remains undistributed to the former holders of shares of Encore common stock will thereafter be delivered to the Surviving Corporation upon demand, and any former holders of shares of Encore common stock who have not surrendered their shares of Encore common stock in accordance with the terms of the Merger Agreement must thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, without any interest thereon, upon due surrender of their shares of Encore common stock. Any portion of the aggregate Merger Consideration remaining unclaimed by the former holders of shares of Encore common stock immediately prior to such time as such amounts would otherwise escheat to or become property of any governmental entity will, to the fullest extent permitted by applicable law, become the property of the Surviving Corporation free and clear of any claims or interest of any person previously entitled thereto.
Withholding
The Paying Agent, Encore, the Surviving Corporation, Parent and Merger Sub (and their respective affiliates or agents), as applicable, and any other applicable withholding agent (without duplication) will
 
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be entitled to deduct and withhold (or cause to be deducted and withheld) from any amounts otherwise payable under the Merger Agreement such amounts as are required to be withheld or deducted under the Code, or under any provision of applicable U.S. state or local or non-U.S. tax law with respect to the making of such payment. To the extent that such amounts are so deducted or withheld and paid over to the relevant governmental entity, such deducted or withheld amounts will be treated for all purposes of the Merger Agreement as having been paid to the person in respect of which such deduction or withholding was made. Notwithstanding anything in the Merger Agreement to the contrary, any compensatory amounts payable to any current or former employee of Encore pursuant to or as contemplated by the Merger Agreement will be remitted to the applicable payor for payment to the applicable person through regular payroll procedures, as applicable, or, at the election of Encore, through a payroll agent, in either case subject to any required deductions or withholdings.
Representations and Warranties
The Merger Agreement contains representations and warranties of Encore, Parent and Merger Sub. Some of the representations and warranties in the Merger Agreement made by Encore are qualified as to materiality or “Company Material Adverse Effect.” For purposes of the Merger Agreement, “Company Material Adverse Effect” means an event, change, occurrence, effect, condition or development that, individually or in the aggregate with all other events, changes, occurrences, effects, conditions or developments, has had, or would reasonably be expected to have, a material adverse effect on the business, assets, liabilities, properties, results of operations or condition (financial or otherwise) of Encore, taken as a whole, but does not include events, changes, occurrences, effects, conditions or developments (by themselves or when aggregated or taken together with any and all other events, changes, occurrences, effects, conditions or developments) to the extent relating to or resulting from the following matters:

the market price or trading volume of Encore common stock (or changes thereto) or any change in the credit rating of Encore or any of its securities (provided, that the underlying causes thereof, to the extent not otherwise excluded by this definition, may be considered in determining whether a Company Material Adverse Effect has occurred);

the execution, announcement, consummation, existence, delivery or performance of the Merger Agreement (including the identity of Parent, Merger Sub or their affiliates), or the announcement or consummation of the transactions contemplated by the Merger Agreement, including the impact thereof on the relationships, contractual or otherwise, of Encore with employees, customers, suppliers, distributors, manufacturers’ representatives, partners, governmental entities or other business relationships, except with respect to certain representations or warranties and a closing condition to the extent it relates to such representations and warranties;

the general conditions or trends in the industries in which Encore operates or in the domestic, foreign or global economy generally or other general business, financial or market conditions;

domestic, foreign or global political conditions, economic, regulatory, financial or capital markets conditions (including interest rates, foreign exchange rates, inflation rates, exchange rates, tariffs, trade wars and credit markets);

geopolitical conditions, any act of civil unrest, civil disobedience, protests, public demonstrations, insurrection, terrorism, war, sanctions, cyberterrorism, ransomware or malware, military activity, sabotage, or cybercrime, data breach, national or international calamity or any other similar event, including an outbreak or escalation of hostilities involving the United States or any other governmental entity or the declaration by the United States or any other governmental entity of a national emergency or war, or any worsening of any such conditions threatened or existing on the date of the Merger Agreement;

any natural or manmade disasters or weather developments, including earthquakes, hurricanes, volcanos, tsunamis, typhoons, lightning, hail storms, blizzards, tornadoes, droughts, floods, cyclones, arctic frosts, mudslides and wildfires, any acts of God, epidemics, pandemics or disease outbreaks (including COVID-19) or similar force majeure events, including any worsening of such conditions threatened or existing on the date of the Merger Agreement;
 
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any changes in the pricing or availability of copper or aluminum;

the failure, in and of itself, of Encore to meet internal or analysts’ expectations or projections, forecasts, guidance, estimates or budgets or revenue or earning predictions (provided, that the underlying causes thereof, to the extent not otherwise excluded by this definition, may be deemed to contribute to a Company Material Adverse Effect);

any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, relating to or resulting from the Merger Agreement or the transactions contemplated by the Merger Agreement that is brought by current or former Encore stockholders against Encore or its directors and officers;

any action taken by Encore at the express written direction of Parent or any action required to be taken by Parent, Merger Sub or Encore pursuant to the terms of the Merger Agreement; or

any change in any applicable law or GAAP or any other applicable accounting principles or standards (or interpretations of any applicable law or GAAP or any other applicable accounting principles or standards) after the date of the Merger Agreement.
However, in the case of the matters in the third through sixth or the eleventh bullets, to the extent such event, change, occurrence, effect, condition or development referred to therein is not otherwise excluded from the definition of Company Material Adverse Effect and has a disproportionate adverse impact on the business, assets, liabilities, properties, results of operations or condition (financial or otherwise) of Encore relative to other similarly situated persons engaged in the same industry or industries or geographic markets in which Encore operates, the incremental disproportionate impact of such event, change, occurrence, effect, condition or development may be taken into account for the purpose of determining whether a Company Material Adverse Effect has occurred.
In the Merger Agreement, Encore has made representations and warranties to Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

due organization, valid existence, good standing and authority and qualification to conduct business with respect to Encore;

the absence of subsidiaries of Encore;

the capital structure of Encore;

Encore’s corporate power and authority to enter into the Merger Agreement and perform its obligations thereunder;

the absence of, as a result of the performance of the Merger Agreement and consummation of the Merger and other transactions contemplated by the Merger Agreement, (i) any contravention of, conflict with or violation of Encore’s organizational or governing documents; (ii) any contravention of, conflict with or violation of any applicable law; (iii) any contravention of, conflict with, violation of, default under or resulting ability to cause termination, cancellation or acceleration under, any contract; (iv) a resulting creation of a lien on any asset or property owned or used by Encore; or (v) except as may be required by (w) the Exchange Act, (x) the DGCL, (y) the HSR Act and other applicable antitrust laws and (z) certain other specified laws, any requirement of Encore to make any filing with, give any notice to, or obtain any consent from, any governmental entity; in each case, subject to certain exceptions set forth in the Merger Agreement;

Encore’s SEC filings;

Encore’s financial statements;

the absence of any commitment or obligation with respect to any securitization transaction, off-balance sheet partnership or any similar contract, in each case, where the purpose or intended effect of such contract is to avoid disclosure of any material transaction or material liability of Encore in Encore’s financial statements or SEC filings;

Encore’s internal controls over financial reporting;
 
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Encore’s disclosure controls and procedures;

Encore’s compliance with listing requirements of Nasdaq;

since January 1, 2024 through the date of the Merger Agreement, there has not been any Company Material Adverse Effect;

since January 1, 2024 through the date of the Merger Agreement, Encore has not taken any action, or agreed to take any action, that if taken during the period starting on the date of the Merger Agreement and until the Closing would require Parent’s consent under certain provisions of the Merger Agreement;

legal proceedings and orders;

Encore’s ownership and possession of good and valid title to material assets free and clear of any liens (other than permitted liens);

certain material real property and equipment owned or leased by Encore;

matters relating to patents, trademarks, copyrights, domain names, trade secrets, rights of publicity and moral rights and other intellectual property, as well as data security and privacy;

the existence and enforceability of specified categories of Encore’s material contracts, and the absence of any violation, breach or default under the terms thereof or occurrence of an event that would constitute a violation or breach thereof or default thereunder;

the absence of specified types of undisclosed liabilities;

Encore’s compliance with laws, including compliance with applicable information privacy and security laws and anti-corruption, anti-bribery and economic sanctions and trade laws;

governmental authorizations and permits;

tax matters;

employee and labor matters;

employee benefit plans;

legal proceedings involving employees and employee benefits matters;

Encore’s equity awards;

environmental matters;

insurance policies and programs;

Encore’s products;

Encore’s significant customers and suppliers;

the inapplicability of anti-takeover statutes or similar provisions contained in Encore’s governing documents to the Merger Agreement, the Merger or any of the transactions contemplated by the Merger Agreement;

the Encore stockholder vote required to adopt the Merger Agreement;

broker, finder and investment banker fees;

the rendering of an opinion from J.P. Morgan to the Board; and

information included or incorporated by reference into this Proxy Statement.
In the Merger Agreement, Parent and Merger Sub have made representations and warranties to Encore that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

due organization, valid existence, good standing and authority and qualification to conduct business with respect to Parent, Guarantor and Merger Sub;
 
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Parent’s, Guarantor’s and Merger Sub’s corporate power and authority to enter into the Merger Agreement and perform their obligations thereunder;

required consents, approvals and regulatory filings in connection with the Merger Agreement and the Merger and the other transactions contemplated by the Merger Agreement and the performance thereof;

the corporate approvals necessary for the Merger to be consummated;

the absence of, as a result of the performance of the Merger Agreement and consummation of the Merger and other transactions contemplated by the Merger Agreement, (i) any contravention of or conflict with Parent’s, Guarantor’s or Merger Sub’s organizational or governing documents; (ii) any contravention of, conflict with or violation of any applicable law; (iii) any violation of, or default or resulting ability to cause termination, cancellation or acceleration of any material obligation or the loss of a material benefit under, any contract binding upon Parent, Guarantor or Merger Sub; or (iv) a resulting creation of a lien on any properties or assets of Parent, Guarantor or Merger Sub; in each case, subject to certain exceptions set forth in the Merger Agreement;

the absence of certain investigations, legal proceedings or orders;

information supplied by or on behalf of Parent, Merger Sub or Guarantor for inclusion in this Proxy Statement;

the capital structure of Merger Sub;

no required vote of Parent’s stockholders in order for Parent to consummate the Merger and the other transactions contemplated by the Merger Agreement;

broker, finder and investment banker fees;

the absence of contracts between Parent or Merger Sub or any of their affiliates, on the one hand, and any beneficial owner of five percent or more of the outstanding shares of Encore common stock or any member of Encore management or the Board, on the other hand, relating to Encore, the Merger or the other transactions contemplated by the Merger Agreement or the operations of the Surviving Corporation after the Effective Time;

the absence of ownership of Encore common stock by Parent, Merger Sub or any of their respective subsidiaries;

delivery and enforceability of the Debt Commitment Letters in connection with the Merger Agreement, and sufficiency of funds to pay the amounts required to be paid by Parent and Merger Sub under the Merger Agreement; and

the solvency of Parent and its subsidiaries, on a consolidated basis, following the Closing.
The representations and warranties contained in the Merger Agreement will not survive the consummation of the Merger.
Conduct of Business Pending the Merger
From the date of the Merger Agreement and until the earlier of the Effective Time and the Termination Date (as defined below in this section of this Proxy Statement), if any (the “Pre-Closing Period”), except (i) as may be required by applicable law, any governmental entity of competent jurisdiction or the rules or regulations of Nasdaq, (ii) as may be agreed to in writing in advance by Parent, which consent may not be unreasonably withheld, delayed or conditioned, (iii) as may be required or expressly permitted by the Merger Agreement, (iv) as set forth in the Encore disclosure letter that was delivered by Encore to Parent concurrently with the entry by the parties into the Merger Agreement (the “Encore disclosure letter”) or (v) for any action reasonably taken, or reasonably omitted to be taken, pursuant to any COVID-19 Measures (as such term is defined in the Merger Agreement), as otherwise necessary or appropriate to protect the health and safety of employees or others having business dealings with Encore, or in response to any Emergency (as such term is defined in the Merger Agreement) (in each case of clause (v), subject to good faith consultation with Parent to the extent reasonably practical under the circumstances), Encore has agreed that it will use its reasonable best efforts to:
 
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conduct its business in all material respects in the ordinary course of business;

maintain material business relationships;

preserve intact its business organization, material assets, properties and governmental authorizations;

keep available the services of its key employees; and

maintain its insurance coverage with regard to any material assets or properties.
During the Pre-Closing Period, and except (i) as may be required by applicable law, any governmental entity of competent jurisdiction or the rules or regulations of Nasdaq, (ii) as may be agreed to in writing in advance by Parent, which consent may not be unreasonably withheld, delayed or conditioned, (iii) as may be required or expressly permitted by the Merger Agreement, (iv) as set forth in the Encore disclosure letter or (v) for any action reasonably taken, or reasonably omitted to be taken, pursuant to any COVID-19 Measures, as otherwise necessary or appropriate to protect the health and safety of employees or others having business dealings with Encore, or in response to any Emergency (in each case of clause (v), subject to good faith consultation with Parent to the extent reasonably practical under the circumstances), Encore has agreed that it will not:

declare, set aside, authorize or pay any dividend or other distribution, except for regular quarterly cash dividends by Encore not to exceed $0.02 per share of Encore common stock per quarter, consistent with past practice, and with record dates and payment dates consistent with past practice of Encore in the prior twelve months;

split, combine, subdivide, exchange, reverse split or reclassify any of Encore’s capital stock, or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of Encore’s capital stock, or form or acquire any subsidiary;

except as required by Encore employee benefit plans that were in existence as of the date of the Merger Agreement and were listed in the Encore disclosure letter, (A) increase the compensation, severance, termination pay or other benefits payable or provided to any current or former employee, officer, director or individual independent contractor of Encore, (B) enter into or expand the coverage of any change of control, severance, deferred compensation, retention agreement or plan, (C) materially amend, adopt, establish, agree to establish, enter into, terminate or modify any funding arrangement with respect to, any Encore employee benefit plan or any plan, practice, program, agreement, contract, policy or arrangement that would have been an Encore employee benefit plan if it had been in existence on the date of the Merger Agreement, (D) take any action to waive or amend any performance or vesting criteria or accelerate vesting, exercisability or funding under any Encore employee benefit plan, (E) make any contributions or payments to any trust or other funding vehicle with respect to any Encore employee benefit plan, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Encore employee benefit plan or change the manner in which such contributions are determined, except as may be required by GAAP, (G) terminate the employment (other than for cause) or hire or promote any employee, officer or director whose annual base compensation is in excess of  $200,000 per year, (H) effectuate a “plant closing,” “mass layoff,” or similar action under the Worker Adjustment and Retraining Notification Act (and any similar applicable state or local statute or regulation), (I) issue, grant or authorize the issuance or grant of, or accelerate or amend, any Encore equity award or other equity or equity-based award or other incentive compensation to any current or former employee, officer, director, or individual independent contractor of Encore or (J) enter into any collective bargaining agreement;

enter into or make any loans or advances to any director, employee, officer or other individual service provider of Encore (other than loans or advances in the ordinary course of business or indemnification of attorneys’ fees and expenses or business expenses paid or advanced to or on behalf of directors, officers, employees or independent contractors) or make any change in its existing borrowing or lending arrangements for or on behalf of any such persons, except as required by the terms of any Encore employee benefit plan;
 
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change its fiscal year or materially change any financial, actuarial, reserving or accounting methods, accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes or revalue any of its material assets, except as required by GAAP or SEC rule or regulations;

adopt any amendments to Encore’s certificate of incorporation or bylaws;

grant, issue, sell, pledge, dispose of or encumber, or authorize the grant, issuance, sale, pledge or disposition of, or the creation of any lien on, any shares of capital stock or other securities or ownership interests in Encore or any securities convertible into, exercisable for or exchangeable for any such shares, securities or ownership interests, or take any action to cause to be vested any otherwise unvested equity award (except as otherwise required by the terms of the Merger Agreement or the express terms of any such equity award outstanding as of the date of the Merger Agreement), other than (A) issuances of shares of Encore common stock in respect of any exercise of or settlement of Encore equity awards outstanding on the date of the Merger Agreement or granted in accordance with the terms of the Merger Agreement or the Encore disclosure letter or (B) any permitted lien;

directly or indirectly purchase, redeem or otherwise acquire any shares of capital stock, securities or ownership interests in Encore or any rights, warrants or options to acquire any such shares, securities or ownership interests, other than the acquisition of shares of Encore common stock from a holder of an Encore equity award in satisfaction of withholding obligations or the payment of the exercise price with respect to such Encore equity award;

(A) incur, assume or guarantee any Indebtedness (as such term is defined in the Merger Agreement), except for (1) Indebtedness incurred pursuant to that certain Credit Agreement, dated as of February 9, 2021, among Encore, the lenders and other parties from time to time party thereto and Bank of America, N.A., as administrative agent, swingline lender and L/C issuer, as amended by the First Amendment to Credit Agreement, dated as of October 20, 2022, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time (the “Company Credit Facility”) (or any Subject Refinancing Indebtedness (as defined below) in respect thereof) provided that the aggregate principal amount outstanding at any time does not exceed $50 million, (2) leases of equipment in the ordinary course of business not to exceed payments by Encore in excess of  $1 million over the life of such lease and (3) Indebtedness for borrowed money incurred on or after February 9, 2025 in order to refinance the Company Credit Facility in an aggregate principal amount not to exceed the principal amount of the Company Credit Facility so refinanced (any such Indebtedness, the “Subject Refinancing Indebtedness”); provided, that (i) such Subject Refinancing Indebtedness (w) has a stated maturity date that is later than that of the Company Credit Facility, (x) will be on customary, market terms, in consultation with Parent, (y) will consist only of bank revolving credit facilities and will not consist of debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise) and (z) will be prepayable at any time (subject to customary notice requirements) without premium or penalty (other than customary reference rate breakage), (ii) none of the execution, delivery or performance of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement or to be consummated in connection with the Merger Agreement will conflict with, or result in any violation of or default under, or give rise to a right of termination, cancellation or acceleration of any obligation under or any other material right of the lenders (or their agents or trustees) under or any loss of a material benefit of Encore under, or result in the creation of any lien, mortgage, security interest or encumbrance securing such Subject Refinancing Indebtedness, or could require the preparation or delivery of separate financial statements of Encore following the Closing and (iii) immediately upon the incurrence by Encore of any Subject Refinancing Indebtedness, Encore will notify Parent thereof and will provide Parent copies of all definitive documentation related thereto, or (B) amend, modify or supplement the Company Credit Facility, except for a refinancing thereof as permitted by clause (3) above;

acquire (by purchase, merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business
 
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combination or similar transaction), or make any investment in, any entity, business, business line or material amount of assets other than (A) acquisitions pursuant to contracts in effect on the date of the Merger Agreement and set forth in the Encore disclosure letter, (B) acquisitions of supplies, equipment or inventory in the ordinary course of business or (C) capital expenditures permitted by the terms of the Merger Agreement;

sell, lease, license, transfer, exchange or swap, or subject to any lien (other than permitted liens) or otherwise dispose of any material portion of any of its material properties or assets, including material Encore intellectual property, other than (1) non-exclusive licenses of Encore intellectual property, and dispositions of inventory or obsolete assets in each case, in the ordinary course of business, (2) pursuant to contracts in effect on the date of the Merger Agreement and set forth in the Encore disclosure letter or (3) subject to certain covenants set forth in the Merger Agreement, as may be required by any governmental entity in order to permit or facilitate the consummation of the transactions contemplated by the Merger Agreement;

enter into, modify, amend, cancel or terminate (other than expiration in accordance with its terms), waive any material rights under or release or assign any material rights or claims under certain material contracts or certain contracts that would be considered material if in existence as of the date of the Merger Agreement or after giving effect to such amendment, other than in the ordinary course of business (except for (A) certain contracts that would be considered material pursuant to certain sections of the Merger Agreement and (B) entering into material contracts with a term of greater than one year or amending or modifying certain existing material contracts to extend the applicable term by more than one year);

make or authorize any payment of, accrual or commitment for, any capital expenditures, except (A) as contemplated by and in accordance with Encore’s capital expenditure budget set forth in the Encore disclosure letter, (B) for capital expenditures not to exceed $5 million individually or $10 million in the aggregate and (C) for reasonable expenditures made in response to an Emergency (provided, in the case of clause (C), Encore has provided prior notice to and reasonably consulted with Parent to the extent practicable under the circumstances);

settle, pay, discharge or satisfy any pending or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative or other legal proceeding, other than (x) any such action or legal proceeding relating to taxes or (y) any such action the settlement, payment, discharge or satisfaction of which does not result in the imposition of equitable or other non-monetary relief on, or the admission of wrongdoing by, Encore, or relate to any actual or potential violation of any criminal law and results solely in an obligation involving the payment of moneys by Encore (net of monetary obligations funded by an indemnity obligation to, or an insurance policy of, Encore) of not more than $1 million individually or $5 million in the aggregate; provided, that the settlement, release, waiver or compromise of any action, legal proceeding or claim brought by Encore stockholders against Encore and/or its directors relating to the transactions contemplated by the Merger Agreement will be subject to the covenant in the Merger Agreement regarding such actions and claims rather than this paragraph;

adopt or enter into a plan of complete or partial liquidation, dissolution, merger (other than the Merger), consolidation, restructuring, recapitalization or other reorganization of Encore;

(A) adopt, change or revoke any material method of tax accounting; (B) change any annual tax accounting period; (C) make (other than in the ordinary course of business and consistent with past practice of Encore), change or revoke any material tax election; (D) file any material tax return reflecting any position, election or method, in each case, in a manner that is inconsistent with the corresponding position taken, election made or method used, if any, in preparing or filing tax returns with respect to prior periods; (E) settle or otherwise compromise any tax proceeding for an amount materially in excess of amounts reserved therefor (if any) in accordance with GAAP in the financial statements contained in Encore’s SEC filings; (F) enter into, cancel or modify any closing agreement with a governmental entity with respect to taxes or tax returns; (G) request any ruling from a governmental entity with respect to taxes or tax returns; (H) extend or waive the period of assessment or collection for any material taxes (in each case other than (i) extensions or waivers in connection with routine tax return filings which extensions or waivers have been
 
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consistently applied for and granted with respect to periods ending prior to the Closing, and (ii) extensions or waivers automatically granted under applicable law); (I) enter into any tax sharing agreement relating to any material taxes; (J) surrender any right to claim any material tax refund; or (K) file any materially amended tax return or otherwise amend any material tax return; and

agree, in writing or otherwise, to take any of the foregoing actions.
In accordance with the terms of the Merger Agreement, during the Pre-Closing Period, with respect to any consent of Parent sought for any action that would be prohibited by the foregoing, Parent has agreed to promptly review any request for such consent received from Encore and respond to such request within ten business days.
Go-Shop Period
Commencing on April 14, 2024 and continuing until 11:59 p.m. Central Time on May 19, 2024 (such period of time, the “Go-Shop Period,” and such latter date, the “No-Shop Period Start Date”), Encore and the directors, officers, employees, accountants, consultants, legal counsel, financial advisors, agents or other representatives (each, a “Representative”) of Encore had the right to (subject to the conditions set forth in the Merger Agreement), directly or indirectly:

solicit, initiate, induce, propose, facilitate, or encourage any Alternative Proposals (as defined in this section of this Proxy Statement) or any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal;

subject to the prior entry into an Acceptable Confidentiality Agreement (as defined in this section of this Proxy Statement), furnish to any third party or its Representatives any non-public information relating to Encore and afford to such third party or its Representatives access to non-public information related to the business, properties, personnel, assets, books, records and other non-public information of Encore, in each such case with the intent to solicit, initiate, induce, propose, facilitate or encourage any Alternative Proposal or any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal (provided that Encore must promptly (and in any event within twenty-four hours) provide to Parent and its Representatives, or provide Parent and its Representatives access to, any such non-public information concerning Encore that is provided to any such third party or its Representatives that was not previously provided or made available to Parent); and

otherwise cooperate with or assist with or facilitate any Alternative Proposal or any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal, including that Encore may grant a waiver under any “standstill provision” or similar obligation of any third party with respect to Encore to allow such third party to submit or amend an Alternative Proposal on a confidential basis to the Board or any committee thereof.
“Acceptable Confidentiality Agreement” means a confidentiality agreement to which Encore is a party having provisions that are not materially less favorable in any substantive respect to Encore than the provisions of the Parent Confidentiality Agreement; provided, that such confidentiality agreement will not restrict compliance by Encore with the terms of the Merger Agreement; provided, further, that such confidentiality agreement need not contain any “standstill” or similar provisions. In accordance with the terms of the Merger Agreement, (a) a joinder to an Acceptable Confidentiality Agreement pursuant to which a third party agrees to be bound by the confidentiality and use provisions of an Acceptable Confidentiality Agreement and (b) a clean team agreement entered into with respect to the treatment of competitively sensitive information of Encore will each be an Acceptable Confidentiality Agreement, so long as the provisions therein are not materially less favorable in any substantive respect to Encore than the provisions of the Parent Confidentiality Agreement.
“Alternative Proposal” means any inquiry, proposal or offer made by any person (other than Parent, Merger Sub or any of their respective affiliates) relating to or concerning (i) the direct or indirect acquisition by any person of  (A) twenty percent or more of the assets of Encore, or (B) assets of Encore to which twenty percent or more of the revenues or earnings of Encore are attributable for the most recent fiscal year for which the audited financial statements are then available (other than, in each case, sales of
 
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inventory, leases and nonexclusive licenses in the ordinary course of business) or (ii) the direct or indirect acquisition by any person (including by way of merger, reorganization, division, consolidation, share exchange, business combination, recapitalization or other similar transaction), or a tender offer or exchange offer that if consummated would result in any person beneficially owning, twenty percent or more of the total voting power of the equity securities of Encore (or any direct or indirect parent company thereof), immediately following such transaction, in each of the foregoing clauses (i) and (ii), whether in a single or series of related transactions. Encore received no Alternative Proposals during the Go-Shop Period.
Non-Solicitation Covenant
Except as permitted by the Merger Agreement as discussed in the section above entitled “— Go-Shop Period,” during the period commencing on (i)(x) with respect to any third party who is an Excluded Party (as such term is defined in the Merger Agreement) as of the No-Shop Period Start Date, the earlier of the date on which such third party is no longer an Excluded Party and fifteen days after the No-Shop Period Start Date or (y) with respect to any other third party, the No-Shop Period Start Date, and (ii) continuing until the earlier of the Effective Time and the date on which the Merger Agreement is terminated (the “Termination Date”), Encore has agreed that it will, and will use its reasonable best efforts to cause its Representatives to, (x) immediately cease and cause to be terminated any solicitation, discussions or negotiations with any person (other than Parent, Merger Sub and their Representatives) in connection with any Alternative Proposal or any other proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in, an Alternative Proposal, (y) terminate access to the virtual data room administered in connection with the transactions contemplated by the Merger Agreement by any person (other than (A) Parent, Merger Sub and their Representatives and (B) Encore and its Representatives) and (z) promptly request that each person that has executed a confidentiality agreement within the twelve-month period immediately preceding the No-Shop Period Start Date in connection with such person’s consideration of any Alternative Proposal (other than Parent, Merger Sub and their Representatives) return or destroy all confidential information regarding Encore. Encore received no Alternative Proposals prior to the No-Shop Period Start Date, and accordingly, there are no Excluded Parties.
Other than with respect to a third party who is an Excluded Party on the No-Shop Period Start Date (and only until the earlier of such time as such Excluded Party is no longer an Excluded Party and fifteen days after the No-Shop Period Start Date, at which time the following provisions will become applicable), during the period commencing on the No-Shop Period Start Date and continuing until the earlier of the Effective Time and the Termination Date, Encore has agreed that it will not, and will use its reasonable best efforts to cause its Representatives not to, directly or indirectly, take any of the following actions:

solicit, initiate, induce, propose, knowingly facilitate or knowingly encourage the making or submission of, any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, any Alternative Proposal;

engage in, continue or otherwise participate in any negotiations or discussions regarding any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal or furnish any non-public information regarding Encore or provide access to its properties to any person (other than Parent, Merger Sub and their Representatives) relating to any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal (except, in each case, to notify such person that the non-solicitation provisions of the Merger Agreement prohibit any such discussions or negotiations);

take any action to exempt any person from the restrictions on “business combinations” contained in Section 203 of the DGCL or any other applicable state antitakeover statute or otherwise cause such restrictions not to apply to such person;

enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other similar contract (excluding any Acceptable Confidentiality Agreement), in each case constituting or related to any Alternative Proposal (an “Alternative Acquisition Agreement”); or
 
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publicly announce any intention to do any of the foregoing.
During the period commencing on the No-Shop Period Start Date until the earlier of the Effective Time and the Termination Date, Encore has agreed that it (i) will not modify, amend or terminate, or waive, release or assign any standstill provisions or similar agreements with any person and (ii) will enforce, to the fullest extent permitted under applicable law, the provisions of any such agreements; provided, that if the Board determines in good faith after consultation with Encore’s outside legal counsel that the failure to waive a particular standstill provision or similar agreement would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law, Encore may waive such standstill or similar agreement solely to the extent necessary to allow for an Alternative Proposal that has not been solicited in breach of the non-solicitation provisions of the Merger Agreement to be made to the Board in a confidential manner so long as Encore promptly notifies Parent thereof concurrently with granting any such waiver and Encore complies with the related notice requirements under the terms of the Merger Agreement.
Including during the period prior to the No-Shop Period Start Date, Encore has also agreed that it will (i) promptly (and in any event within twenty-four hours of receipt) notify Parent of the receipt by Encore or its Representatives of any proposal, offer, inquiry or request that constitutes, or would reasonably be expected to result in or lead to, an Alternative Proposal, which notice will include a summary of the material terms and conditions of  (and the identity of the person making) such proposal, offer, inquiry or request and will include with such notice copies of such proposal, offer, inquiry or request and copies of any other documents, in each case, evidencing or specifying the material terms and conditions of such proposal, offer, inquiry or request, in each case, to the extent provided in writing and (ii) thereafter keep Parent reasonably informed on a prompt (and, in any event within twenty-four hours) basis of any material developments with respect to, or any material change to the terms of, any such Alternative Proposal, including by providing copies of any additional draft agreements relating to, or written proposals containing any material term of, any such Alternative Proposal received by Encore or any of its Representatives.
Notwithstanding the foregoing and without limiting the provisions discussed in the section of this Proxy Statement entitled “— Go-Shop Period,” if, at any time following the date of the Merger Agreement and prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock, Encore receives a bona fide written Alternative Proposal, which Alternative Proposal did not result from a material breach of the non-solicitation provisions of the Merger Agreement, and the Board determines in good faith after consultation with Encore’s financial advisors and outside legal counsel that (i) such Alternative Proposal constitutes, or would reasonably be expected to result in, a Superior Proposal (as defined below), and (ii) the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law, Encore may take the following actions:

furnish information, including material non-public information, to any person making such Alternative Proposal, as well as its Representatives and potential financing sources, if, and only if, prior to so furnishing such information, such third party has executed an Acceptable Confidentiality Agreement (provided, that Encore will, prior to or concurrently with such disclosure, make available to Parent any non-public information that is made available to such person to the extent not previously provided to Parent or its Representatives); and

engage in discussions or negotiations with any person (as well as its Representatives) with respect to the Alternative Proposal.
“Superior Proposal” means a bona fide written Alternative Proposal substituting in the definition thereof “fifty percent” for “twenty percent” in each place it appears, made after the date of the Merger Agreement that the Board determines in good faith, after consultation with Encore’s outside financial and legal advisors, and considering such factors as the Board considers to be relevant (including the conditionality, timing and likelihood of consummation of such proposal, as well as, to the extent third party financing is contemplated, the nature of such financing and any commitments with respect thereto, and whether such proposal is reasonably capable of being satisfied in accordance with its terms (if accepted)) to be more favorable from a financial point of view to Encore stockholders than the transactions contemplated
 
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by the Merger Agreement (including any binding commitments made by Parent to Encore in writing to amend the terms of the Merger Agreement during the periods contemplated in the Merger Agreement).
The Board’s Recommendation; Change of Recommendation
As described in this Proxy Statement, and subject to the provisions described below, the Board has made the recommendation that Encore stockholders vote to adopt the Merger Agreement (the “Recommendation”).
Encore has agreed that the Board, including any committee thereof, will not:

withhold, withdraw or qualify (or modify or amend in any manner adverse to Parent or Merger Sub), or propose publicly to withhold, withdraw or qualify (or modify or amend in any manner adverse to Parent or Merger Sub), the Recommendation;

approve, recommend, adopt, authorize or declare advisable, or publicly propose to approve, recommend, adopt, authorize or declare advisable, any Alternative Proposal;

fail to include the Recommendation in this Proxy Statement;

fail to publish, send or provide to the holders of shares of Encore common stock, pursuant to Rule 14e-2(a) under the Exchange Act a statement recommending against any Alternative Proposal that is a tender or exchange offer and publicly reaffirm the Recommendation within ten business days after the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of such tender offer or exchange offer or fail to maintain such Recommendation against such offer at any time before such offer has expired or been withdrawn;

if an Alternative Proposal (other than an Alternative Proposal that is a tender or exchange offer) or any material modification thereof will have been publicly announced or disclosed, fail to recommend against such Alternative Proposal or material modification thereof or fail to reaffirm the Recommendation within ten business days after Parent so requests in writing (or, if earlier, at least two business days prior to the Special Meeting) (it being understood that Encore will have no obligation to make such reaffirmation more than once per Alternative Proposal and each material modification thereof); or

resolve to effect or publicly announce an intention to effect any of the foregoing (any of the foregoing, a “Change of Recommendation”).
At any time prior to obtaining the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement, the Board may, in response to an Alternative Proposal received by Encore after the date of the Merger Agreement that has not been subsequently withdrawn, which Alternative Proposal did not result from a material breach of the non-solicitation provisions of the Merger Agreement, and with respect to which the Board determines in good faith, after consultation with Encore’s financial advisors and outside legal counsel, (1) such Alternative Proposal constitutes a Superior Proposal and (2) the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law, make a Change of Recommendation with respect to such Superior Proposal, and/or, in certain specified circumstances, cause Encore to terminate the Merger Agreement; provided, that the Board will not be entitled to make a Change of Recommendation or cause such termination of the Merger Agreement unless, in each case:

Encore has given Parent at least four business days’ prior written notice (a “Superior Proposal Notice”) advising Parent of its intention to make such a Change of Recommendation or terminate the Merger Agreement, which Superior Proposal Notice must include a description of the material terms and conditions of the Superior Proposal, the identity of the person making such proposal and copies of the proposal and any other documents evidencing or specifying the material terms and conditions of such proposal;

during such four business day period, if requested by Parent, Encore and its Representatives will engage in good faith negotiations with Parent and its Representatives (to the extent Parent so
 
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desires to negotiate) to consider amendments to the terms and conditions of the Merger Agreement in such a manner so that such Alternative Proposal would cease to constitute a Superior Proposal; and

at the end of such four business day period, after taking into account any irrevocable commitments or binding proposals made by Parent to Encore in writing to amend the terms of the Merger Agreement during such period, the Board determines in good faith after consultation with Encore’s financial advisors and outside legal counsel, that the Alternative Proposal giving rise to the Superior Proposal Notice continues to constitute a Superior Proposal and the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law; provided, that in the event of any material modification of the financial terms or any other material modifications to the terms of such Superior Proposal, Encore will be required to deliver a new written notice to Parent and to again comply with the requirements set forth in the Merger Agreement (and described above) with respect to such new written notice, except that the new notice period will be three business days.
At any time prior to obtaining the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement, the Board may, in response to an Intervening Event (as defined in this section of this Proxy Statement) that is continuing, make a Change of Recommendation if the Board determines in good faith, after consultation with Encore’s financial advisors and outside legal counsel, that the failure to make a Change of Recommendation in response to such Intervening Event would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law; provided, that the Board will not be entitled to make such a Change of Recommendation unless:

Encore has given Parent at least four business days’ prior written notice (an “Intervening Event Notice”) advising Parent of its intention to make such a Change of Recommendation, which Intervening Event Notice must include a description of the applicable Intervening Event;

to the extent requested by Parent during such four business day period, Encore and its Representatives will have engaged in good faith negotiations with Parent and its Representatives (to the extent Parent so desires to negotiate) to consider amendments to the terms and conditions of the Merger Agreement in such a manner that would permit the Board, consistent with the directors’ fiduciary duties, not to make such Change of Recommendation; and

at the end of such four business day period, after taking into account any irrevocable commitments or binding proposals made by Parent to Encore in writing to amend the terms of the Merger Agreement during such four business day period, the Board determines in good faith, after consultation with Encore’s financial advisors and outside legal counsel, that the failure of the Board to make such Change of Recommendation would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law (it being understood that any such determination in and of itself will not be deemed a Change of Recommendation); provided, that in the event of any material change to such Intervening Event, Encore will be required to deliver a new written notice to Parent and to again comply with the requirements set forth in the Merger Agreement (and described above) with respect to such new written notice, except that the notice period will be three business days.
“Intervening Event” means any event, change, occurrence, development, condition, effect or state of facts or circumstances that (i) is material to Encore, (ii) was unknown to, and not reasonably foreseeable by, the Board as of the date of the Merger Agreement, or if known and reasonably foreseeable to the Board as of the date of the Merger Agreement, the material consequences of which were not known or reasonably foreseeable to the Board as of the date of the Merger Agreement and (iii) does not involve or relate to (A) an Alternative Proposal, (B) any changes in the pricing or availability of copper or aluminum or (C) the fact that Encore exceeds any published analyst estimates or expectations of Encore’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or exceed any internal or published projections, budgets, plans or forecasts of revenues, earnings or other financial performance or results of operations, in and of itself, or any change in the price or trading volume of the shares of Encore common stock or the credit rating of Encore (provided, that for purposes of clause (C),
 
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the matters giving rise to or contributing to such events may be deemed to constitute, or be taken into account in determining whether there has been, an Intervening Event).
Nothing in the Merger Agreement will prohibit the Board from (i) complying with its disclosure obligations under applicable law or Nasdaq rules and regulations, including taking or disclosing to Encore stockholders a position contemplated by Rules 14d-9, 14e-2(a) or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or from issuing a “stop, look and listen” statement pending disclosure of its position thereunder (and no communication that consists solely of a “stop, look and listen” statement, in and of itself, will be considered a Change of Recommendation) or (ii) making any disclosure to Encore stockholders if the Board determines in good faith, after consultation with Encore’s outside legal counsel, that such disclosure is required by applicable law; provided, that no disclosure or communication will be permitted pursuant to the foregoing sentence that constitutes a Change of Recommendation or will require the giving of a Superior Proposal Notice or an Intervening Event Notice except in accordance with the applicable provisions of the Merger Agreement (described above in this section of this Proxy Statement). For the purposes of the Merger Agreement, a public statement by Encore or the Board that describes the receipt of an Alternative Proposal, the identity of the person making such Alternative Proposal, the material terms of such Alternative Proposal and the operation of the Merger Agreement with respect thereto (that does not otherwise indicate or suggest that such Alternative Proposal constitutes a Superior Proposal) will not be deemed to be (A) a withholding, withdrawal, modification or proposal by the Board to withhold, withdraw, or modify, the Recommendation, (B) an approval, recommendation or declaration of advisability with respect to such Alternative Proposal or (C) a Change of Recommendation.
In accordance with the terms of the Merger Agreement, Encore has agreed not to enter into any Alternative Acquisition Agreement (other than an Acceptable Confidentiality Agreement) unless the Merger Agreement has been terminated in accordance with its terms (including the payment of the Company Termination Fee (as defined in the section of this Proxy Statement entitled “— Termination Fee Payable by Encore”), if and as applicable, pursuant to the terms of the Merger Agreement). Encore has also agreed not to enter into any confidentiality agreement with any person subsequent to the date of the Merger Agreement that would restrict Encore’s ability to comply with any of the terms of the Merger Agreement.
Additionally, if Encore provides a Superior Proposal Notice or Intervening Event Notice to Parent on a date that is less than five business days before the Special Meeting, Encore will, if requested by Parent acting reasonably, postpone the Special Meeting to a date determined by Parent that is not more than ten business days after the scheduled date of the Special Meeting, but in no event will the Special Meeting be postponed to a date which would prevent the Effective Time from occurring on or prior to the End Date.
Employee Matters
For a period of twelve months following the Effective Time (or, if shorter, the applicable employee’s period of employment following the Closing Date), Parent will provide or cause to be provided to each employee of Encore who is employed immediately prior to the Effective Time and who remains employed following the Effective Time (each, a “Company Employee”):

a base salary or wage rate (as applicable) and an annual target cash incentive opportunity (excluding severance, any change in control, retention or transaction bonus payments, and any equity or equity-based incentive opportunity or arrangement, but including Encore’s deferred bonus program) that, in each case, is no less favorable than were provided to such Company Employee immediately prior to the Effective Time; and

broad-based employee health, welfare, and retirement benefits (excluding any defined benefit retirement and retiree medical plans) that are substantially similar, in the aggregate, to those provided to similarly situated employees of Parent (provided, that participation in the Encore employee benefit plans as provided to the Company Employees immediately before the Effective Time will be deemed to satisfy this requirement, and it being understood that the Company
 
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Employees may commence participating in the employee benefit plans of Parent on different dates following the Effective Time with respect to different plans).
Parent has also agreed to use its reasonable best efforts to (a) cause each Company Employee’s service with Encore and its predecessors prior to the Effective Time to be credited for all purposes (including for purposes of vesting, eligibility to participate and level of benefits (other than defined benefit pension, non-qualified deferred compensation, and retiree or other post-employment health and welfare benefits)) under any applicable Parent employee benefit plan to the same extent such service was recognized under a corresponding Encore employee benefit plan, and provided that such recognition of service would not result in a duplication of benefits, or for purposes of any pension plan or for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits, (b) cause each Company Employee to be immediately eligible to participate, without any waiting time, in any and all Parent employee benefit plans to the extent coverage under such Parent employee benefit plan is comparable to an Encore employee benefit plan in which such Company Employee participated immediately before the Effective Time and (c) for purposes of each Parent employee benefit plan providing medical, dental, pharmaceutical or vision benefits to any Company Employee, (i) waive all pre-existing condition exclusions and actively-at-work requirements of such Parent employee benefit plan for such Company Employee and his or her covered dependents, and (ii) give each Company Employee credit for the plan year in which such Company Employee is first eligible to participate in such Parent employee benefit plan towards applicable deductibles, coinsurance and maximum out-of-pocket requirements for the applicable plan year as if such amounts had been paid in accordance with such Parent employee benefit plan.
In addition, following the date of the Merger Agreement, Parent and Encore will cooperate and use good faith efforts as reasonably necessary for employee and compensation and benefits integration planning, including exchanging information and data relating to employees, organizational structure, compensation and employee benefits. Encore will also provide Parent with the opportunity and a reasonable period of time to review and comment on any broad-based or otherwise material employee notices or communication materials (including website postings) regarding the transactions contemplated by the Merger Agreement from Encore to Encore employees.
Debt Financing
Each of Parent and Merger Sub has agreed to use their respective reasonable best efforts to take, or cause to be taken, and Parent will use its respective reasonable best efforts to cause its subsidiaries and each of their respective Representatives and affiliates to, use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to consummate on a timely basis the Debt Financing as contemplated by the Debt Commitment Letters, (or in the event any portion or all of such Debt Financing becomes unavailable or otherwise undesirable, alternative financing (the “Alternative Financing”) (in an amount sufficient, together with the remaining Debt Financing contemplated by the Debt Commitment Letters, if any, cash on hand, and any other sources available to Parent and Merger Sub, to fund the payment of the Funding Obligations (as such term is defined in the Merger Agreement)) from the same or other sources) as and to the extent (but only to the extent) required to fund the Funding Obligations. To the extent that (i) Parent and Merger Sub require Debt Financing contemplated by the Debt Commitment Letters in order to fund the Funding Obligations and (ii) the Debt Financing under the Debt Commitment Letters has not become unavailable, Parent and Merger Sub have agreed not to amend the Debt Commitment Letters to impose additional conditions or contingencies to the funding of the Debt Financing that would adversely impact the ability of Parent and Merger Sub to consummate the Merger; provided, that if the Debt Financing under the Debt Commitment Letters has become unavailable, Parent and Merger Sub have agreed that the terms of any Alternative Financing they may enter into will not adversely impact the ability of Parent and Merger Sub to consummate the Merger.
Each of Parent and Merger Sub has agreed that none of the availability, the terms or the obtaining of the Debt Financing or any Alternative Financing, nor the completion of any issuance of securities contemplated by the Debt Financing or any Alternative Financing, is in any manner a condition to the Merger, the Closing or the obligations of Parent and Merger Sub to consummate the transactions contemplated by the Merger Agreement.
 
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Upon the written request of Encore, Parent and Merger Sub have agreed to keep Encore reasonably informed of the status of the efforts of Parent or Merger Sub to arrange the Debt Financing. Parent and Merger Sub have agreed to (i) give Encore prompt written notice of any (A) material breach or material default by any party to the Debt Commitment Letters of which Parent or Merger Sub becomes aware, including the receipt of any written notice from any Debt Financing Source with respect to any material breach or material default by any party to the Debt Commitment Letters, (B) written withdrawal, repudiation or termination of the Debt Commitment Letters by the financing sources party thereto of which Parent or Merger Sub becomes aware or (C) incurable event or circumstance that makes a condition precedent relating to the Debt Financing unable to be satisfied (in the good faith determination of Parent) by any party of which Parent or Merger Sub becomes aware and (ii) notify Encore promptly if for any reason Parent or Merger Sub no longer believes in good faith that it will be able to obtain all or any portion of the Debt Financing contemplated by the Debt Commitment Letters from the sources described therein.
Cooperation as to Debt Financing
Subject to the terms of the Merger Agreement, Encore has agreed to use reasonable best efforts, and to use reasonable best efforts to cause its Representatives to use their reasonable best efforts, to, in each case at Parent’s sole cost and expense, provide customary cooperation that is reasonably requested by Parent or Merger Sub to assist Parent and Merger Sub in connection with their efforts to obtain the Debt Financing or any Alternative Financing, which cooperation will include reasonable best efforts to do the following:

participating (which will be limited to teleconference or virtual meeting platforms) in a reasonable number of lender meetings, lender presentations, due diligence sessions and rating agency meetings, in each case, upon reasonable advance notice, during normal business hours and at mutually agreed times;

providing reasonable assistance to Parent and Merger Sub in their preparation of customary rating agency presentations, customary bank information memoranda and similar documents reasonably and customarily required in connection with the Debt Financing or any Alternative Financing, in each case, solely with respect to information relating to Encore and its business, and promptly furnishing, to the extent practicable, to Parent and Merger Sub such information regarding Encore (and updates thereto as reasonably requested by such persons), including historical financial information, in each case, that is readily available from the books and records of Encore in the ordinary course of business, and other customary financial information as is reasonably requested by Parent and Merger Sub in connection with the Debt Financing or any Alternative Financing, or that is customarily required in connection with the execution of financings of a type similar to the Debt Financing or any Alternative Financing;

ensuring that an officer of Encore executes prior to the Closing customary “authorization” letters in connection with bank information memoranda authorizing the distribution of information to prospective lenders; and

delivering at least four business days prior to the Closing Date information and documentation related to Encore required and reasonably requested in writing by Parent or Merger Sub at least eight business days prior to the Closing Date with respect to compliance under applicable “know your customer” and anti-money laundering rules and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.
The cooperation and other obligations set forth above do not:

require any action that would, or would reasonably be expected to, cause the failures of any condition of Encore to the Closing or any condition related to the availability of the Debt Financing at the Closing to be satisfied;

require Encore or its Representatives to:
 
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other than the “authorization” letter contemplated above, execute, deliver, enter into, approve or perform any agreement, commitment, document, certificate or instrument, or modification of any agreement, commitment, document, certificate or instrument or incur any other actual or potential liability or obligation relating to the Debt Financing, in each case, that becomes effective prior to the Closing;

deliver or cause the delivery of any legal opinions or reliance letters or any certificate as to solvency or any other certificate in connection with the Debt Financing, other than the “authorization” letter contemplated above;

adopt any resolutions, execute any consents or otherwise take any corporate or similar action or deliver any certificate, in connection to the Debt Financing or the incurrence of indebtedness thereby, in each case, that becomes effective prior to the Closing; or

pay any commitment or other similar fee, incur or reimburse any costs or expenses or incur any liability or obligation of any kind or give any indemnities prior to the Closing in connection with the Debt Financing, other than any payment or reimbursement of incidental out-of-pocket costs and expenses that are subject to reimbursement by Parent or Merger Sub;

require the change of any fiscal period;

require Encore to provide, or cause to be provided, any information the disclosure of which is prohibited or restricted under applicable law or any binding agreement with a third party that is not entered into for the purpose of evading this covenant or is legally privileged or consists of attorney work product or could reasonably be expected to result in the loss of any attorney-client privilege, attorney work product protections or similar protections;

require Encore to take any action that will conflict with or violate any applicable laws or result in a violation or breach of, or default under, any material contract to which Encore is a party (other than any agreement entered into for purposes of evading this covenant);

unreasonably interfere with the ongoing operations of Encore;

require the preparation or delivery of any financial statements or other financial data that are not prepared in the ordinary course of its financial reporting practice;

cause any representation or warranty in the Merger Agreement to be breached;

cause Encore, or any director, officer, employee or stockholder of Encore, to incur any personal liability;

conflict with Encore’s certificate of incorporation or bylaws; or

under any circumstance, require Encore to provide projections, estimates or pro forma financial information relating to the transactions contemplated by the Merger Agreement, including any pro forma cost savings, synergies, capitalization or other pro forma adjustments relating to the transactions contemplated by the Merger Agreement to be incorporated into any pro forma financial information.
Parent has agreed to reimburse Encore, following request by Encore for such reimbursement, for any reasonable and documented out-of-pocket expenses and costs (including reasonable and documented out-of-pocket outside attorneys’ fees and disbursements) incurred by Encore or its affiliates or Representatives in connection with the cooperation obligations described in this section of this Proxy Statement and Parent will indemnify and hold harmless Encore and its Representatives from and against any and all losses, damages, claims, costs (including cost of investigation), settlement payments, injuries, liabilities, judgments, awards, penalties, fines or expenses (including reasonable and documented out-of-pocket attorneys’ fees and disbursements) suffered or incurred by any of them as a result of, or in connection with (i) such cooperation, (ii) the Debt Financing and (iii) any information used in connection with the Debt Financing, subject to certain exceptions, except, in each case, to the extent such losses, damages, claims, costs (including cost of investigation), settlement payments, injuries, liabilities, judgments, awards, penalties, fines, or expenses (including outside attorneys’ fees and disbursements)
 
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arose from the fraud, willful misconduct or gross negligence by, or breach of its material obligations under the Merger Agreement by, Encore, its affiliates or any of their respective Representatives, as determined in a final, non-appealable judgment of a court of competent jurisdiction.
Treatment of Encore’s Credit Facility
Encore has agreed to use reasonable best efforts to deliver all notices and take other actions required to facilitate the termination of commitments in respect of the Company Credit Facility and all Subject Refinancing Indebtedness, repayment in full of all obligations in respect of such Company Credit Facility and all Subject Refinancing Indebtedness upon the Closing, and release of any liens and guarantees in connection therewith upon the Closing; provided that the foregoing will not obligate Encore to terminate any commitments in respect of the Company Credit Facility or any Subject Refinancing Indebtedness prior to the Closing or make any optional prepayment in respect of such obligations prior to the Closing. Encore has agreed to use reasonable best efforts to furnish to Parent, by a date not later than two business days prior to the Closing Date, customary payoff letters with respect to each of the Company Credit Facility and the Subject Refinancing Indebtedness in form and substance reasonably satisfactory to Parent to (x) indicate the total amount required to be paid to fully satisfy all principal, interest, prepayment premiums, penalties, breakage costs or other outstanding and unpaid obligations related to such obligations as of the Closing Date (the “Payoff Amount”) and (y) state that all obligations (including guarantees) in respect of such facilities (other than obligations that expressly survive termination thereof pursuant to the terms of the Company Credit Facility and Subject Refinancing Indebtedness, as applicable) and liens, if any, on the assets of Encore, substantially concurrently with the receipt of the Payoff Amount on the Closing Date by the third parties holding such obligations, will be released or arrangements reasonably satisfactory to Parent for such release will have been made by such time, subject, as applicable, to the replacement (or cash collateralization or backstopping) of any then outstanding letters of credit or similar obligations.
Guaranty
Guarantor has agreed to absolutely, unconditionally and irrevocably guarantee, as primary obligor and not as surety, to Encore the due and punctual payment and performance of each of the payment obligations of Parent and Merger Sub, as applicable under the Merger Agreement. The guaranty is one of payment and performance and not of collection. For so long as the guaranty remains in effect, Guarantor will not exercise any right or remedy arising by reason of its performance of its guaranty, whether by subrogation, reimbursement, indemnification, contribution or otherwise, against Encore or any other guarantor of the Guaranteed Obligations or any security therefor. In accordance with the terms of the Merger Agreement, Encore has agreed and acknowledged that Guarantor may assert, as a defense to, or release or discharge of, any payment or performance by Guarantor under the Merger Agreement, any claim, set-off, deduction, defense or release that Parent or Merger Sub could assert against Encore under the terms of, or with respect to, the Merger Agreement, or otherwise with respect to the Guaranteed Obligations.
Subject to the provisions of the guaranty, including the limitations contained therein, the guaranty is a continuing one and remains in force until the Guaranteed Obligations have been performed or satisfied. The Guaranteed Obligations will be discharged as a result of  (i) indefeasible payment in full of the Guaranteed Obligations in accordance with the terms of the Merger Agreement or (ii) those defenses to the payment of the Guaranteed Obligations that Parent or Merger Sub has (A) arising from fraud or willful breach by Encore or (B) under the specific terms of the Merger Agreement.
As a separate and independent stipulation, any of the Guaranteed Obligations that is or becomes unenforceable against, or not capable of recovery from, Parent or Merger Sub by reason of any legal limitation, disability or incapacity on or of Parent or Merger Sub (other than any limitation imposed by the Merger Agreement) will nevertheless be enforceable against and recoverable from Guarantor as though the same had been incurred by Guarantor and Guarantor were the sole or principal obligor in respect of that Guaranteed Obligation.
 
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Indemnification and Insurance
Parent and Merger Sub agree that all rights to exculpation, indemnification and advancement of expenses now existing in favor of the current or former directors, officers or employees, as the case may be, of Encore (or employees of Encore to the extent serving as fiduciaries with respect to any Encore employee benefit plan) as provided in its certificate of incorporation or bylaws or in any indemnification agreements set forth in the Encore disclosure letter of Encore with any of its directors, officers or employees as in effect as of the date of the Merger Agreement will survive the Merger and will continue at and after the Effective Time in full force and effect for a period of at least six years after the Effective Time. Additionally, for a period of six years after the Effective Time, the Surviving Corporation will maintain in effect the exculpation, indemnification and advancement of expenses provisions of Encore’s certificate of incorporation and bylaws as in effect as of the date of the Merger Agreement or in any indemnification agreements set forth in the Encore disclosure letter of Encore with any of its current or former directors, officers or employees as in effect on the date of the Merger Agreement, and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees of Encore.
For a period of six years after the Effective Time, the Surviving Corporation will, to the fullest extent permitted under applicable law, indemnify and hold harmless (and advance funds in respect of each of the foregoing or any related expenses) each current and former director, officer or employee of Encore and each person who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of or for the benefit of Encore (or employees of Encore to the extent serving as fiduciaries with respect to any Encore employee benefit plan), in each case, at or prior to the Effective Time against any costs or expenses (including advancing attorneys’ fees and expenses in advance of the final disposition of any action to the fullest extent permitted by law following receipt of a written undertaking by or on behalf of the applicable indemnified party to repay such advanced amounts if it is ultimately determined that such party was not entitled to such indemnification), liabilities and losses, reasonably incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred at or prior to the Effective Time in connection with the fact that such person is or was a director, officer or employee of Encore or was serving as an officer, director, employee or other fiduciary in any entity if such service was at the request or for the benefit of Encore.
For a period of six years from and after the Effective Time, the Surviving Corporation will either cause to be maintained in effect the current policies of directors’ and officers’ and fiduciary liability insurance maintained by or for the benefit of Encore and its current and former directors and officers or provide substitute policies for Encore and its current and former directors and officers who are currently covered by the directors’ and officers’ and fiduciary liability insurance coverage currently maintained by or for the benefit of Encore, in either case, of not less than the existing coverage and having other terms not less favorable to the insured persons in the aggregate than the directors’ and officers’ and fiduciary liability insurance coverage currently maintained by or for the benefit of Encore and its current and former directors and officers with respect to claims arising from facts or events that occurred at or before the Effective Time (regardless of when such claims are brought) with insurance carriers having the same or better A.M. Best financial rating as Encore’s current directors’ and officers’ and fiduciary liability insurance carriers, except that in no event will Parent or the Surviving Corporation be required to pay with respect to such insurance policies more than 300% of the aggregate annual premium most recently paid by Encore. If the Surviving Corporation is unable to obtain such insurance because its cost exceeds such maximum amount, it will obtain as much comparable insurance as possible for the years within such six-year period for a premium equal to such maximum amount. In lieu of such insurance, prior to the Closing Date Encore may, at its option, purchase, or Parent may, at its option request that Encore purchase, a six-year prepaid “tail” directors’ and officers’ and fiduciary liability insurance policy for Encore and its current and former directors and officers who are currently covered by the directors’ and officers’ and fiduciary liability insurance coverage currently maintained by or for the benefit of Encore, such tail policy to provide coverage in an amount not less than the existing coverage and to have other terms not less favorable in the aggregate to the insured persons than the directors’ and officers’ and
 
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fiduciary liability insurance coverage currently maintained by or for the benefit of Encore with respect to claims arising from facts or events that occurred at or before the Effective Time; provided, that Encore will not pay an aggregate amount for such policy in excess of the maximum amount set forth above. If Encore is unable to obtain such tail policy because its cost exceeds the maximum amount, it will obtain as much comparable insurance as possible for the years within such six-year period for a premium equal to the maximum amount. Following the Closing, Parent will cause the Surviving Corporation to maintain such policies in full force and effect and to continue to honor the obligations thereunder for a period of at least six years.
Special Meeting
Encore has agreed, as promptly as reasonably practicable after the date of the Merger Agreement (and no later than thirty days after the date of the Merger Agreement), that Encore will:

prepare and file with the SEC the preliminary proxy statement, which, subject to the right of the Board to make a Change of Recommendation, will include the Recommendation;

use reasonable best efforts to respond to any comments by the staff of the SEC in respect of the preliminary proxy statement as promptly as reasonably practicable after the receipt thereof; and

cause the commencement of the mailing of the definitive proxy statement to Encore stockholders as promptly as practicable following the time the preliminary proxy statement is cleared by the SEC (and in any event within three business days after such time); provided, that in no event will the definitive proxy statement be required to be filed with the SEC or mailed to Encore stockholders prior to the No-Shop Period Start Date.
Encore has also agreed that it will:

subject to the other provisions of the Merger Agreement, take all action required by Nasdaq and the SEC rules and as required by the DGCL and Encore’s certificate of incorporation and bylaws to duly call, give notice of, convene and hold the Special Meeting promptly (but in no event later than thirty-five days following the commencement of the mailing of this Proxy Statement) for the purpose of obtaining (A) the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement and (B) if so desired and mutually agreed between Encore and Parent, a vote upon other matters of the type customarily brought before a meeting of stockholders in connection with the approval of a merger agreement or the transactions contemplated by the Merger Agreement; provided, that the foregoing obligations will not be affected by a Change of Recommendation (it being understood and agreed that in the event of a Change of Recommendation, Encore will have no obligation to solicit proxies to obtain the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock under the following bullet); and

subject to the right of the Board to make a Change of Recommendation, use reasonable best efforts to obtain the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement and solicit from Encore stockholders proxies in favor of the adoption of the Merger Agreement.
Encore may adjourn, recess, or postpone, and at the request of Parent it will adjourn, recess or postpone, the Special Meeting for a reasonable period to solicit additional proxies, if Encore or Parent, respectively, reasonably believes there will be insufficient shares of Encore common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Special Meeting or to obtain the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement (provided, that unless agreed to in writing by Encore and Parent, all such adjournments, recesses or postponements will be for periods of no more than ten business days each (not to exceed twenty business days in the aggregate)) and (y) Encore may adjourn, recess, or postpone the Special Meeting to the extent necessary to ensure that any required supplement or amendment to this Proxy Statement is provided to Encore stockholders within a reasonable amount of time in advance of the Special Meeting. Except in the event of a Change of Recommendation that has been effected in accordance with the terms of the Merger Agreement, Encore
 
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will use its reasonable best efforts to provide Parent with periodic updates (including voting reports) concerning proxy solicitation results, as reasonably requested by Parent.
See the section of this Proxy Statement entitled “— The Board’s Recommendation; Change of Recommendation” for related information regarding the Board’s responsibilities with regard to recommending the adoption of the Merger Agreement to Encore stockholders.
Transaction Litigation
During the Pre-Closing Period, and subject to the limitations set forth in the Merger Agreement, Encore will control the defense of any pending or threatened legal proceeding against Encore and/or its directors or officers relating to the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement (whether directly or on behalf of Encore or otherwise); provided, that Encore will promptly notify Parent of any such legal proceeding and keep Parent reasonably and promptly informed with respect to the status thereof, give Parent the right to participate in, and the right to review and comment on all material filings or responses to be made by Encore in connection with, any such legal proceeding (and will give due consideration to Parent’s comments and other advice with respect to such legal proceeding, including with respect to strategy and any significant decisions related thereto), and give Parent the opportunity to consult on the settlement, release, waiver or compromise of any such legal proceeding; provided, that Encore will not be required to provide, or cause to be provided, any information the disclosure of which would reasonably be expected to result in the loss of any attorney-client privilege or work-product protection; provided, further, that Encore will use reasonable best efforts to make appropriate substitute arrangements to allow access in a manner that does not result in waiver of such privilege. Encore will in good faith take any comments provided by Parent into account, and no such settlement, release, waiver or compromise of such litigation will be agreed to without Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
Regulatory Approvals and Related Matters
Pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the waiting period applicable to the Merger under the HSR Act has expired or been terminated and any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties have agreed not to consummate the Merger and the transactions contemplated by the Merger Agreement under the HSR Act have expired or have been terminated.
Additionally, pursuant to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement cannot be consummated until the clearances and approvals requested by any governmental entity under certain specified laws have been obtained, or any waiting periods relating thereto have expired, in the event that an applicable governmental entity has requested such clearances or approvals be obtained or determined that such waiting periods apply to the Merger and the transactions contemplated by the Merger Agreement.
Each of Parent and Encore filed its respective notification and report form required to be filed pursuant to the HSR Act on April 26, 2024.
Subject to the terms and conditions of the Merger Agreement, each of Parent and Encore has agreed to cooperate with each other and use reasonable best efforts to take promptly, or cause to be taken, all actions and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable laws to consummate and make effective the Merger and the other transactions contemplated by the Merger Agreement as promptly as practicable following the date of the Merger Agreement, including:

obtaining all necessary actions or nonactions, waivers, consents, clearances, approvals and expirations or terminations of waiting periods from governmental entities and making all necessary registrations and filings and taking all steps as may be necessary to obtain an approval, clearance or waiver from, or to avoid an action or legal proceeding by, any governmental entity;
 
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obtaining all necessary consents, approvals or waivers from third parties (other than governmental entities);

defending any actions, lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or challenging, hindering, impeding, interfering with or delaying the consummation of the Merger and the other transactions contemplated by the Merger Agreement, including seeking to have any stay, temporary restraining order or injunction entered by any court or other governmental entity in connection with the foregoing vacated or reversed; and

executing and delivering any additional instruments necessary to consummate the transactions contemplated by the Merger Agreement.
In connection with the undertakings above, in no event will Encore be required to pay any fee, penalty or other consideration to any third party for any consent or approval required for or triggered by the consummation of the Merger or the other transactions contemplated by the Merger Agreement under any contract or otherwise, unless requested by Parent in writing, in which case it will pay such amount so long as such payment is conditioned on the occurrence of the Closing.
Specifically, without limiting the generality of the above, Parent and Encore have agreed to:

prepare and file the notification and report forms required under the HSR Act promptly but in no event later than April 26, 2024, which notification and report form was filed by each of Encore and Parent on April 26, 2024; and

prepare and file the notifications as may be requested by any governmental entity under certain other specified laws promptly but in no event later than twenty business days after receiving such request from the applicable governmental entity.
In addition, Parent and Encore have agreed to supply or cause to be supplied to any governmental entity as promptly as practicable any and all additional information or documentary material that may be requested, and certify compliance with such request (as applicable), under any law or by such governmental entity and take the following actions as necessary to resolve any objections or avoid or remove any impediments to the consummation of the Merger and the other transactions contemplated by the Merger Agreement under any applicable antitrust laws or other specified laws to enable the consummation of the Merger to occur as promptly as practicable (each, a “Remedial Action”):

terminating, transferring or creating relationships, contractual rights or other obligations of Parent (including its subsidiaries) and Encore; and

otherwise taking or committing to take any actions or agree to any undertakings that would limit Parent’s (including its subsidiaries’ and the Surviving Corporation’s) freedom of action with respect to, Parent’s (including its subsidiaries’ and the Surviving Corporation’s) future operations with respect to, assets (whether tangible or intangible), businesses, divisions, personnel, operations, products or product lines or contractual or supply relationships of Parent (and its subsidiaries, including the Surviving Corporation) or Encore, in each case so as to satisfy the conditions to the Closing or to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order in any legal proceeding that would otherwise have the effect of preventing the Closing or delaying the Closing beyond the End Date.
Notwithstanding anything in the Merger Agreement to the contrary, (i) Encore will not be (x) required to or become subject to, or consent or agree to or otherwise take any Remedial Action or Divestiture Action (as defined below in this section of this Proxy Statement) unless such action is applicable to Encore only from and after the Effective Time or (y) permitted to offer or agree to or effectuate any Remedial Action or Divestiture Action without the prior written consent of Parent; (ii) Parent (or any of its subsidiaries) will not be required to: (x) become subject to any Remedial Action if such Remedial Action would or would reasonably be expected to result in a material adverse effect on Parent and its subsidiaries (including Encore) taken as a whole (provided that for this purpose, Parent and its subsidiaries (including Encore) taken as a whole will be deemed a consolidated group of entities of the size and scale of a hypothetical company that is 100% of the size of Encore as of the date of the Merger Agreement), after giving effect
 
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to the Merger and the other transactions contemplated by the Merger Agreement, (y) become subject to, or consent or agree to or otherwise take any action with respect to any Remedial Action, unless such Remedial Action is binding on or otherwise applicable to Parent or its subsidiaries only from and after the Effective Time or (z) propose, commit to, effect, or execute, by consent decree, settlement, undertaking, stipulations, hold separate order, binding agreement with a third part(ies) or otherwise, the sale, divestiture, hold separate or disposition of any or all of the share capital or other equity voting interests, assets (whether tangible or intangible), businesses, divisions, operations, products or product lines of Parent (including its subsidiaries) or of Encore (each, a “Divestiture Action”); and (iii) if requested by Parent in writing, Encore will agree to any Remedial Action or Divestiture Action so long as such action is conditioned on the occurrence of the Closing.
Parent has agreed to pay all filing fees payable in connection with the HSR Act, certain specified regulatory approvals and other regulatory filings.
Parent and Encore have agreed to work cooperatively in connection with obtaining all necessary actions or nonactions, waivers, consents, clearances, approvals and expirations or terminations of waiting periods with respect to the Merger and the other transactions contemplated by the Merger Agreement, and (to the extent permitted under applicable law) specifically have agreed to:

cooperate and consult with each other in connection with any filing or submission with a governmental entity or any other person relating to the Merger and the other transactions contemplated by the Merger Agreement;

subject to any legal restrictions or instructions of governmental entities, keep the other party promptly informed of any communication received from a governmental entity or other person, in each case regarding the Merger and the other transactions contemplated by the Merger Agreement (and in the case of written communications, furnish the other party with a copy of such communication);

permit counsel for the other party a reasonable opportunity to review in advance, and consider in good faith the views of the other party in connection with, any proposed notifications or filings, and any written communications or submissions to any governmental entity, including any documents submitted therewith; and

to the extent not prohibited by such governmental entity, give the other party the opportunity to attend and participate in any meetings or discussions (whether in-person, by videoconference, or by telephone) with such governmental entity.
Parent and Encore further agree that they will not, and Parent will cause its subsidiaries to not, acquire or agree to acquire any other person or business or any material assets or properties of any other person if such acquisition would reasonably be expected to materially impede, prevent or materially delay the parties from obtaining the expiration or termination of the waiting period under the HSR Act or obtaining certain specified regulatory approvals, or to prevent or materially delay or materially impede the consummation of the transactions contemplated by the Merger Agreement.
Other Covenants
The Merger Agreement contains other covenants, including but not limited to those relating to access to information, notification with respect to certain matters, takeover statutes, public announcements, stock exchange delisting and deregistration, matters related to Section 16 of the Exchange Act, director resignations and further assurances.
Conditions to the Closing of the Merger
The respective obligations of each party to effect the Merger and the other transactions contemplated by the Merger Agreement are subject to the satisfaction (or waiver by Parent and Encore to the extent permitted by applicable law) of the following conditions:

the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock;
 
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the absence of any injunction or similar charge, order, writ, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative by any governmental entity in the U.S. and the absence of any U.S. federal, state or local or non-U.S. law (including common law), statute, code, treaty, convention, ordinance, rule, regulation, charge, order, writ, injunction, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative or similar requirement of any governmental entity, in each case that remains in effect and, in any case, prohibits or makes illegal the consummation of the Merger (such condition, the “No Legal Restraints Condition”); and

(a) the expiration or earlier termination of the waiting period (and any extension thereof) applicable to the consummation of the Merger and the other transactions contemplated by the Merger Agreement under the HSR Act and the expiration or termination of any and all agreements with governmental entities with competent jurisdiction over Encore or Parent pursuant to which such parties have agreed not to consummate the Merger and the other transactions contemplated by the Merger Agreement under the HSR Act and (b) if applicable, the receipt of all required clearances, approvals and terminations of any waiting periods (as applicable) with respect to certain other specified laws (such condition, the “Regulatory Approvals Condition”).
In addition, the obligation of Encore to effect the Merger and the other transactions contemplated by the Merger Agreement is subject to the satisfaction (or waiver by Encore to the extent permitted by applicable law) of the following conditions:

the representations and warranties of Parent and Merger Sub (without regard to any qualifications as to materiality contained in such representations and warranties) being true and correct at and as of the Closing Date, as if made at and as of such time (except to the extent made as of an earlier date, in which case at and as of such date), except where the failure of such representations and warranties to be so true and correct does not, individually or in the aggregate, prevent or materially delay the Closing or materially impair the ability of Parent or Merger Sub to consummate the Merger and the other transactions contemplated by the Merger Agreement;

Parent and Merger Sub having performed, in all material respects, all obligations and complied, in all material respects, with all covenants required by the Merger Agreement to be performed or complied with by them prior to the Effective Time (this bullet together with the prior bullet, the “Parent and Merger Sub Representations, Warranties and Covenants Conditions”); and

the receipt by Encore of a certificate of Parent, dated as of the Closing Date and signed by its Chief Executive Officer or another senior officer, certifying to the effect that the conditions described in the preceding two bullets have been satisfied.
In addition, the obligations of Parent and Merger Sub to effect the Merger and the other transactions contemplated by the Merger Agreement are subject to the satisfaction (or waiver by Parent and Merger Sub to the extent permitted by applicable law) of the following conditions:

the representations and warranties of Encore (i) related to due organization, valid existence and good standing of Encore, (ii) related to certain aspects of Encore’s capital structure, (iii) related to the absence of a conflict with or violation of the certificate of incorporation or bylaws of Encore caused by the performance of the Merger Agreement or the consummation of the Merger or the other transactions contemplated by the Merger Agreement and (iv) related to the absence of a Company Material Adverse Effect since January 1, 2024 through the date of the Merger Agreement, being true and correct in all respects at and as of the date of the Merger Agreement and the Closing Date, except, in the case of clause (ii), for inaccuracies in such representations and warranties that do not exceed $5 million in the aggregate;

the representations and warranties of Encore related to certain aspects of Encore’s capital structure, the corporate authority of Encore to enter into the Merger Agreement and the valid and binding nature of the Merger Agreement, takeover statutes, the affirmative vote of the holders of a majority of the shares of Encore common stock outstanding on the Record Date being the only vote of holders of any class or series of Encore’s capital stock necessary to adopt the Merger Agreement and approve the Merger, financial advisor fees owed by Encore and the financial
 
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advisor opinion, being true and correct in all material respects at and as of the date of the Merger Agreement and the Closing Date, as if made at and as of such time (except to the extent made as of an earlier date, in which case at and as of such date);

the other representations and warranties of Encore (disregarding all materiality and Company Material Adverse Effect qualifications contained therein) being true and correct in all respects at and as of the date of the Merger Agreement and the Closing Date, as if made at and as of such time (except to the extent made as of an earlier date, in which case at and as of such date), except where the failure of such representations and warranties to be so true and correct does not, individually or in the aggregate, constitute a Company Material Adverse Effect;

Encore having performed, in all material respects, all obligations and complied, in all material respects, with all covenants required by the Merger Agreement to be performed or complied with by it prior to the Effective Time (this bullet together with the prior three bullets, the “Encore Representations, Warranties and Covenants Conditions”);

since the date of the Merger Agreement, the absence of a Company Material Adverse Effect; and

the receipt by Parent of a certificate of Encore, dated as of the Closing Date and signed by its Chief Executive Officer or another senior officer, certifying to the effect that the conditions described in the preceding five bullets have been satisfied.
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time in the following ways (whether before or after any approval by Encore stockholders of the matters presented in connection with the Merger):

by mutual written consent of Encore and Parent;

by either Encore or Parent, if:

the Effective Time has not occurred on or before 11:59 p.m. Central Time on April 14, 2025 (the “End Date”) (provided, that if, as of such time and date all conditions to the Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied by action taken at the Closing), except for (i) the Regulatory Approvals Condition or (ii) the No Legal Restraints Condition (only to the extent the applicable legal restraint relates to the HSR Act or any other applicable antitrust law, certain other specified laws, or in connection with certain specified regulatory approvals), each as described in the section of this Proxy Statement entitled “— Conditions to the Closing of the Merger,” then such date will be automatically extended to 11:59 p.m. Central Time on July 14, 2025 (and references to the “End Date” will instead refer to such extended date)) (provided, further that if, as of such extended End Date, all conditions to Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied by action taken at the Closing) other than the conditions related to (i) the Regulatory Approvals Condition or (ii) the No Legal Restraints Condition (only to the extent the applicable legal restraint relates to the HSR Act or any other applicable antitrust law, certain other specified laws, or in connection with certain specified regulatory approvals), then such date will automatically be further extended to 11:59 p.m. Central Time on October 14, 2025 (and references to the “End Date” will instead refer to such extended date)). This right to terminate the Merger Agreement will not be available to any party whose breach in any material respect of its obligations under the Merger Agreement in any manner has caused the failure to consummate the Merger on or before such date (such termination right, the “End Date Termination Right”);

any governmental entity with competent jurisdiction over any party in the U.S. has issued or enacted a final and nonappealable legal restraint. To utilize this termination right, the party seeking to terminate the Merger Agreement must have used the efforts required by the Merger Agreement to remove such legal restraint. This right to terminate the Merger Agreement will not be available to any party whose breach in any material respect of its obligations under the
 
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Merger Agreement in any manner has caused the issuance or entry of such legal restraint (such termination right, the “Legal Restraint Termination Right”); or

the Special Meeting (which includes any adjournment or postponement thereof) has been held and concluded and the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock in favor of the adoption of the Merger Agreement has not been obtained (such termination right, the “Required Company Stockholder Vote Termination Right”).

by Encore, if:

Parent or Merger Sub has breached or failed to perform in any material respect any of their representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform (i) would result in a failure of one of the Parent and Merger Sub Representations, Warranties and Covenants Conditions and (ii) cannot be cured by the End Date or, if curable, is not cured within thirty business days following Encore’s delivery of written notice to Parent stating Encore’s intention to terminate the Merger Agreement pursuant to this termination right and the basis for such termination; provided, that Encore will not be permitted to terminate the Merger Agreement pursuant to this termination right if any representation, warranty, agreement or covenant of Encore contained in the Merger Agreement has been breached such that one of the Encore Representations, Warranties and Covenants Conditions is not satisfied as of the time of such termination; or

it is terminating the Merger Agreement in order to enter into a definitive agreement with respect to a Superior Proposal prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock, as described in the section of this Proxy Statement entitled “— The Board’s Recommendation; Change of Recommendation”; provided, that (A) Encore has complied in all material respects with the Change of Recommendation provisions of the Merger Agreement, (B) Encore has paid the termination fee owed to Parent prior to or at the time of such termination and (C) promptly after such termination, Encore enters into such definitive agreement with respect to such Superior Proposal (such termination right, the “Superior Proposal Termination Right”).

by Parent, if:

Encore has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform (i) would result in a failure of one of the Encore Representations, Warranties and Covenants Conditions and (ii) cannot be cured by the End Date or, if curable, is not cured within thirty business days following Parent’s delivery of written notice to Encore stating Parent’s intention to terminate the Merger Agreement pursuant to this termination right and the basis for such termination; provided, that Parent will not be permitted to terminate the Merger Agreement pursuant to this termination right if any representation, warranty, agreement or covenant of Parent of Merger Sub contained in the Merger Agreement has been breached such that either of the Parent and Merger Sub Representations, Warranties and Covenants Conditions is not satisfied as of the time of such termination (such termination right, the “Encore Breach Termination Right”); or

prior to the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Encore common stock, a Change of Recommendation as described in the section of this Proxy Statement entitled “— The Board’s Recommendation; Change of Recommendation” has occurred (such termination right, the “Change of Recommendation Termination Right”).
Termination Fee Payable by Encore
Encore has agreed to pay to Parent a termination fee of  $146.54 million in cash (the “Company Termination Fee”) if the Merger Agreement is validly terminated:
 
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by Encore in accordance with the Superior Proposal Termination Right;

by Parent in accordance with the Change of Recommendation Termination Right; or

(A) after the date of the Merger Agreement and prior to the Special Meeting, an Alternative Proposal has been publicly proposed or publicly disclosed, and not withdrawn (x) in the case of a termination pursuant to the Required Company Stockholder Vote Termination Right, at least three days prior to the Special Meeting, and (y) in the case of a termination pursuant to the End Date Termination Right or the Encore Breach Termination Right, prior to such termination, (B) the Merger Agreement is subsequently terminated by Parent or Encore pursuant to the End Date Termination Right or the Required Stockholder Vote Termination Right or by Parent pursuant to the Encore Breach Termination Right and (C) concurrently with or within twelve months after such termination, (x) Encore has entered into a definitive agreement providing for a transaction that constitutes an Alternative Proposal (which transaction is subsequently consummated, whether during or following such twelve-month period) or (y) Encore has consummated a transaction that constitutes an Alternative Proposal (for purposes of clause (A) and this clause (C), references to “twenty percent” in the definition of  “Alternative Proposal” will be deemed to reference “fifty percent” for any fee to be payable under the section of the Merger Agreement described in this section of this Proxy Statement).
In accordance with the terms of the Merger Agreement, the “Company Termination Fee” would have been $73.27 million if  (i) Encore terminated the Merger Agreement pursuant to the Superior Proposal Termination Right and such termination occurred prior to the sixteenth day after the No-Shop Period Start Date because of a Superior Proposal made by an Excluded Party or (ii) Parent terminated the Merger Agreement pursuant to the Change of Recommendation Termination Right and the Change of Recommendation giving rise to such termination occurred in response to an Alternative Proposal made by an Excluded Party and such termination occurred prior to the sixteenth day after the No-Shop Period Start Date. As there are no Excluded Parties, this lower termination fee will not apply.
Parent’s right (or the rights of Parent’s designee(s)) to receive payment from Encore of the Company Termination Fee pursuant to the Merger Agreement, together with the Enforcement Expenses (as such term is defined in the Merger Agreement), will be the sole and exclusive remedy of the Parent Related Parties (as such term is defined in the Merger Agreement) in circumstances where the Company Termination Fee is payable pursuant to the Merger Agreement against the Company Related Parties (as such term is defined in the Merger Agreement) for any loss suffered as a result of the failure of the transactions contemplated by the Merger Agreement to be consummated or for a breach or failure to perform under the Merger Agreement or otherwise, and upon payment of the Company Termination Fee, none of the Company Related Parties will have any further liability or obligation relating to or arising out of the Merger Agreement or the transactions contemplated by the Merger Agreement, except for the payment of certain expenses and costs if required under the Merger Agreement or for any liabilities or damages arising from willful breach of any covenant or agreement of the Merger Agreement or fraud.
In no event will Encore be obligated to pay the Company Termination Fee on more than one occasion.
If Encore fails to promptly pay the Company Termination Fee when due, Encore must pay to Parent (or its designee(s)) all fees, costs and expenses of enforcement (including attorneys’ fees as well as expenses incurred in connection with any action initiated by such party), together with interest on the amount of the Company Termination Fee at the prime lending rate as published in the Wall Street Journal, in effect on the date such payment is required to be made plus two percent per annum.
Termination Fee Payable by Parent
Parent has agreed to pay to Encore a termination fee of  $180 million in cash (the “Parent Termination Fee”) if:

the Merger Agreement is terminated by Parent or Encore pursuant to the End Date Termination Right and, at the time of such termination (A)