DEFM14A 1 tm2025258-5_defm14a.htm DEFM14A tm2025258-5_defm14a - none - 83.898927s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
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   ☐
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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material Pursuant to §240.14a-12
Churchill Capital Corp III
(Name of Registrant as Specified In Its Charter)
N/A
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CHURCHILL CAPITAL CORP III
640 Fifth Avenue, 12th Floor
New York, NY 10019
Dear Churchill Capital Corp III Stockholders,
On behalf of the Churchill board of directors (the “Churchill Board”), we cordially invite you to a special meeting (the “special meeting”) of stockholders of Churchill Capital Corp III, a Delaware corporation (“Churchill,” “we” or “our”), to be held via live webcast at 10:00 a.m. Eastern Time, on October 7, 2020. The special meeting can be accessed by visiting https://www.cstproxy.com/churchillcapitaliii/2020, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.
On July 12, 2020, Churchill entered into an Agreement and Plan of Merger (as the same has been or may be amended, modified, supplemented or waived from time to time, the “Merger Agreement”), by and among Churchill, Polaris Parent Corp., a Delaware corporation (“MultiPlan Parent”), Polaris Investment Holdings, L.P., a Delaware limited partnership (“Holdings”), Music Merger Sub I, Inc., a newly formed Delaware corporation and subsidiary of Churchill (“First Merger Sub”), and Music Merger Sub II LLC, a newly formed Delaware limited liability company and subsidiary of Churchill (“Second Merger Sub”), a copy of which is attached to the accompanying proxy statement as Annex A, which, among other things, provides for (i) First Merger Sub to be merged with and into MultiPlan Parent with MultiPlan Parent being the surviving company in the merger (the “First Merger”) and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, MultiPlan Parent to be merged with and into Second Merger Sub, with Second Merger Sub surviving the merger as a wholly owned subsidiary of Churchill (the “Second Merger,” and together with the First Merger, the “Mergers” and the Mergers, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). As a result of the First Merger, Churchill will own 100% of the outstanding common stock of MultiPlan Parent as the surviving corporation in the First Merger and each outstanding share of class A common stock and class B common stock of MultiPlan Parent (other than treasury shares or shares owned by Churchill, First Merger Sub, Second Merger Sub or MultiPlan Parent) will be cancelled and converted into the right to receive the merger consideration in accordance with the Merger Agreement. As a result of the Second Merger, Churchill will own 100% of the outstanding interests in Second Merger Sub. Following the consummation of the Mergers, Churchill will own, directly or indirectly, all of the outstanding equity interests of the surviving company and the equityholders of Holdings will own a portion of Churchill’s Class A common stock (as defined in the accompanying proxy statement).
Subject to the terms of the Merger Agreement, the aggregate consideration to be paid to Holdings, as agent on behalf of Holdings’ equityholders, will be equal to $5,678,000,000 (the “Closing Merger Consideration”) and will be paid in a combination of stock and cash consideration. The cash consideration will be an amount equal to (i) (x) all amounts in the trust account (after reduction for the aggregate amount of payments required to be made in connection with any valid stockholder redemptions), plus (y) the aggregate amount of cash that has been funded to and remains with Churchill pursuant to the Subscription Agreements (as defined in the accompanying proxy statement) as of immediately prior to the closing, minus (ii) the aggregate principal amount of MultiPlan Parent’s outstanding 8.500% / 9.250% Senior PIK Toggle Notes due 2022 (excluding any accrued and unpaid interest or applicable premium thereunder) (such amount, the “Closing Cash Consideration”); provided, that in no event will the Closing Cash Consideration be greater than $1,521,000,000. The remainder of the Closing Merger Consideration will be paid in shares of Churchill’s Class A common stock in an amount equal to $10.00 per share.
At the special meeting, Churchill stockholders will be asked to consider and vote upon:
(1)
Proposal No. 1 — To consider and vote upon a proposal to approve the business combination described in the accompanying proxy statement, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in the accompanying proxy statement  —  we refer to this proposal as the “business combination proposal”;
(2)
Proposal No. 2 — To consider and vote upon a proposal to approve and adopt the second amended and restated certificate of incorporation of Churchill in the form attached hereto as Annex B (the “second amended and restated certificate of incorporation”) — we refer to this proposal as the “charter proposal”;
(3)
Proposal No. 3 — To consider and vote upon, on a non-binding advisory basis, certain governance provisions in the second amended and restated certificate of incorporation, presented separately
 

in accordance with the United States Securities and Exchange Commission (“SEC”) requirements — we refer to this proposal as the “governance proposal”;
(4)
Proposal No. 4 — To consider and vote on a proposal to approve and adopt the Churchill Capital Corp III 2020 Omnibus Incentive Plan (the “Incentive Plan”) and the material terms thereunder, including the authorization of the initial share reserve thereunder — we refer to this proposal as the “incentive plan proposal.” A copy of the Incentive Plan is attached to the accompanying proxy statement as Annex H;
(5)
Proposal No. 5 — To consider and vote upon a proposal to elect nine directors to serve staggered terms on the Churchill Board until immediately following the 2021, 2022 and 2023 annual meetings of Churchill stockholders, as applicable, and until their respective successors are duly elected and qualified — we refer to this proposal as the “director election proposal”;
(6)
Proposal No. 6 — To consider and vote upon a proposal to approve, for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s (as defined below) Listed Company Manual, (a) the issuance of more than 20% of Churchill’s issued and outstanding shares of common stock in connection with the Transactions, including, without limitation, the PIPE Investment (as described below) and the issuance of more than 20% of Churchill’s issued and outstanding shares to a single holder (which may constitute a change of control under the NYSE’s Listed Company Manual) and (b) the issuance of shares of Churchill Class A common stock to a Related Party (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Transactions — we refer to this proposal as the “NYSE proposal”; and
(7)
Proposal No. 7 — To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal or the NYSE proposal — we refer to this proposal as the “adjournment proposal.”
Each of these proposals is more fully described in the accompanying proxy statement, which we encourage you to read carefully and in its entirety before voting. Only holders of record of Churchill common stock at the close of business on September 14, 2020 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements thereof.
After careful consideration, the Churchill Board has determined that the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal, the NYSE proposal and the adjournment proposal are fair to and in the best interests of Churchill and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the director election proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented. When you consider the Churchill Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of Churchill stockholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for additional information. The Churchill Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the Churchill stockholders that they vote in favor of the proposals presented at the special meeting.
Consummation of the Transactions is conditioned on the approval of each of the business combination proposal, the charter proposal, the incentive plan proposal and the NYSE proposal. If any of those proposals are not approved, we will not consummate the Transactions.
In connection with the Merger Agreement, certain Churchill stockholders have entered into (i) Voting and Support Agreements, pursuant to which such stockholders have agreed to vote their shares in favor of the business combination proposal and the other proposals included in the accompanying proxy statement, and (ii) Non-Redemption Agreements, pursuant to which such stockholders have agreed not to redeem or elect to redeem any shares of Churchill’s Class A common stock in connection with the business combination, in each case, subject to certain permitted transfers of certain stockholders’ shares of Churchill’s Class A common stock.
To raise additional proceeds to fund the Transactions, Churchill has entered into subscription agreements (containing commitments to funding that are subject only to conditions that are generally

aligned with the conditions set forth in the Merger Agreement), pursuant to which certain investors have agreed to (i) purchase an aggregate of 130,000,000 shares of Churchill’s Class A common stock and warrants to purchase 6,500,000 shares of Churchill’s Class A common stock, which we refer to as the “Common PIPE Investment,” for a price of $10.00 per share for an aggregate commitment of $1,300,000,000, plus an additional number of shares of Churchill’s Class A common stock pursuant to an original issue discount as further described in the accompanying proxy statement, and (ii) provide convertible debt financing in the form of convertible senior PIK notes to be issued by Churchill in an aggregate principal amount of $1,300,000,000, which we refer to as the “Convertible PIPE Investment.”
All Churchill stockholders are cordially invited to attend the special meeting and we are providing the accompanying proxy statement and proxy card in connection with the solicitation of proxies to be voted at the special meeting (or any adjournment or postponement thereof). To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote, obtain a proxy from your broker or bank.
Churchill’s units, Class A common stock and warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols CCXX.U, CCXX and CCXX.WS, respectively.
Pursuant to Churchill’s current certificate of incorporation, a holder of public shares may demand that Churchill redeem such shares for cash if the business combination is consummated. Holders of public shares will be entitled to receive cash for these shares only if they (i) demand that Churchill redeem their shares for cash no later than the second business day prior to the vote on the business combination proposal by delivering their stock to Churchill’s transfer agent prior to the vote at the meeting and (ii) affirmatively vote for or against the business combination proposal. If the business combination is not completed, these shares will not be redeemed. If a holder of public shares properly demands redemption and votes for or against the business combination proposal, Churchill will redeem each public share for a full pro rata portion of the trust account holding the proceeds from Churchill’s initial public offering, calculated as of two business days prior to the consummation of the business combination.
Churchill is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to comply with certain reduced public company reporting requirements. Upon consummation of the Transactions, Churchill will cease to be an “emerging growth company.”
This proxy statement provides you with detailed information about the Transactions and other matters to be considered at the special meeting of Churchill’s stockholders. We encourage you to carefully read this entire document, including the Annexes attached hereto. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 45.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
The Transactions described in the accompanying proxy statement have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the merits or fairness of the business combination or related Transactions, or passed upon the accuracy or adequacy of the disclosure in this proxy statement. Any representation to the contrary is a criminal offense.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors
[MISSING IMAGE: sg_michaelklein-bw.jpg]
Michael Klein
Chairman of the Board of Directors
September 18, 2020

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE CHURCHILL REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO CHURCHILL’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “SPECIAL MEETING OF CHURCHILL STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.
This proxy statement is dated September 18, 2020 and is first being mailed to Churchill stockholders on or about September 18, 2020.

 
CHURCHILL CAPITAL CORP III
640 Fifth Avenue, 12th Floor
New York, NY 10019
NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 7, 2020
TO THE STOCKHOLDERS OF CHURCHILL CAPITAL CORP III
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Churchill Capital Corp III, a Delaware corporation (“Churchill,” “we” or “our”), will be held via live webcast at 10:00 a.m. Eastern Time, on October 7, 2020. The special meeting can be accessed by visiting https://www.cstproxy.com/churchillcapitaliii/2020, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.
On behalf of Churchill’s board of directors (the “Churchill Board”), you are cordially invited to attend the special meeting, to conduct the following business items:
(1)
Proposal No. 1 — To consider and vote upon a proposal to approve the business combination described in this proxy statement, including (a) adopting the Agreement and Plan of Merger, dated as of July 12, 2020 (as the same has been or may be amended, modified, supplemented or waived from time to time, the “Merger Agreement”), by and among Churchill, Polaris Parent Corp., a Delaware corporation (“MultiPlan Parent”), Polaris Investment Holdings, L.P., a Delaware limited partnership (“Holdings”), Music Merger Sub I, Inc., a newly formed Delaware corporation and subsidiary of Churchill (“First Merger Sub”), and Music Merger Sub II LLC, a newly formed Delaware limited liability company and subsidiary of Churchill (“Second Merger Sub”), a copy of which (as amended) is attached to the accompanying proxy statement as Annex A, which, among other things, provides for (i) First Merger Sub to be merged with and into MultiPlan Parent with MultiPlan Parent being the surviving company in the merger (the “First Merger”) and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, MultiPlan Parent to be merged with and into Second Merger Sub, with Second Merger Sub surviving the merger as a wholly owned subsidiary of Churchill (the “Second Merger,” and together with the First Merger, the “Mergers” and the Mergers, together with the other transactions contemplated by the Merger Agreement, the “Transactions”) and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement  —  we refer to this proposal as the “business combination proposal”;
(2)
Proposal No. 2 — To consider and vote upon a proposal to approve and adopt the second amended and restated certificate of incorporation of Churchill in the form attached hereto as Annex B (the “second amended and restated certificate of incorporation”) — we refer to this proposal as the “charter proposal”;
(3)
Proposal No. 3 — To consider and vote upon, on a non-binding advisory basis, certain governance provisions in the second amended and restated certificate of incorporation, presented separately in accordance with the United States Securities and Exchange Commission (“SEC”) requirements — we refer to this proposal as the “governance proposal”;
(4)
Proposal No. 4 — To consider and vote on a proposal to approve and adopt the Churchill Capital Corp III 2020 Omnibus Incentive Plan (the “Incentive Plan”) and the material terms thereunder, including the authorization of the initial share reserve thereunder — we refer to this proposal as the “incentive plan proposal.” A copy of the Incentive Plan is attached to the accompanying proxy statement as Annex H;
(5)
Proposal No. 5 — To consider and vote upon a proposal to elect nine directors to serve staggered terms on the Churchill Board until immediately following the 2021, 2022 and 2023 annual meetings of Churchill stockholders, as applicable, and until their respective successors are duly elected and qualified — we refer to this proposal as the “director election proposal”;
 

 
(6)
Proposal No. 6 — To consider and vote upon a proposal to approve, for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s (as defined below) Listed Company Manual, (a) the issuance of more than 20% of Churchill’s issued and outstanding shares of common stock in connection with the Transactions, including, without limitation, the PIPE Investment (as described below) and the issuance of more than 20% of Churchill’s issued and outstanding shares to a single holder (which may constitute a change of control under the NYSE’s Listed Company Manual) and (b) the issuance of shares of Churchill Class A common stock to a Related Party (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Transactions — we refer to this proposal as the “NYSE proposal”; and
(7)
Proposal No. 7 — To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal or the NYSE proposal — we refer to this proposal as the “adjournment proposal.”
Each of these proposals is more fully described in the accompanying proxy statement, which we encourage you to read carefully and in its entirety before voting. Only holders of record of Churchill common stock at the close of business on September 14, 2020 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements thereof.
After careful consideration, the Churchill Board has determined that the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal, the NYSE proposal and the adjournment proposal are fair to and in the best interests of Churchill and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the director election proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented. When you consider the Churchill Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of Churchill stockholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for additional information. The Churchill Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the Churchill stockholders that they vote in favor of the proposals presented at the special meeting.
In connection with Churchill’s entrance into the Merger Agreement, certain Churchill stockholders have entered into (i) Voting and Support Agreements, pursuant to which such stockholders have agreed to vote their shares in favor of the business combination and the other proposals included in the accompanying proxy statement, and/or (ii) Non-Redemption Agreements, pursuant to which certain stockholders have agreed not to redeem or elect to redeem any shares of Churchill’s Class A common stock in connection with the business combination.
Consummation of the Transactions is conditioned on the approval of each of the business combination proposal, the charter proposal, the incentive plan proposal and the NYSE proposal. If any of those proposals are not approved, we will not consummate the Transactions.
To raise additional proceeds to fund the Transactions, Churchill has entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement), pursuant to which certain investors have agreed to (i) purchase an aggregate of 130,000,000 shares of Churchill’s Class A common stock, which we refer to as the “Common PIPE Investment,” for a price of $10.00 per share for an aggregate commitment of $1,300,000,000, plus an additional number of shares of Churchill’s Class A common stock pursuant to an original issue discount as further described in the accompanying proxy statement, and (ii) provide convertible debt financing in the form of convertible senior PIK notes to be issued by Churchill in an aggregate principal amount of $1,300,000,000, which we refer to as the “Convertible PIPE Investment.”
 

 
Pursuant to Churchill’s current certificate of incorporation, a holder of public shares may demand that Churchill redeem such shares for cash if the business combination is consummated. Holders of public shares will be entitled to receive cash for these shares only if they (i) demand that Churchill redeem their shares for cash no later than the second business day prior to the vote on the business combination proposal by delivering their stock to Churchill’s transfer agent prior to the vote at the meeting and (ii) affirmatively vote for or against the business combination proposal. If the business combination is not completed, these shares will not be redeemed. If a holder of public shares properly demands redemption and votes for or against the business combination proposal, Churchill will redeem each public share for a full pro rata portion of the trust account, calculated as of two business days prior to the consummation of the business combination.
All Churchill stockholders are cordially invited to attend the special meeting and we are providing the accompanying proxy statement and proxy card in connection with the solicitation of proxies to be voted at the special meeting (or any adjournment or postponement thereof). To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote, obtain a proxy from your broker or bank.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors
[MISSING IMAGE: sg_michaelklein-bw.jpg]
Michael Klein
Chairman of the Board of Directors
September 18, 2020
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE CHURCHILL REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO CHURCHILL’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “SPECIAL MEETING OF CHURCHILL STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.
 

 
TABLE OF CONTENTS
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Annex
Annex A – Merger Agreement
Annex B – Form of Second Amended and Restated Certificate of Incorporation
Annex C – Investor Rights Agreement
Annex D – Form of Voting and Support Agreement
Annex E – Form of Non-Redemption Agreement
Annex F -1 – Form of Other Common Subscription Agreement
Annex F -2 – Form of the PIF Common Subscription Agreement
Annex G – Form of Convertible Subscription Agreement
Annex H – Churchill Capital Corp III 2020 Omnibus Incentive Plan
Annex I – Sponsor Agreement
 
ii

 
FREQUENTLY USED TERMS
Unless otherwise stated in this proxy statement or the context otherwise requires, references to:
Available Closing Acquiror Cash” are to (x) all amounts in the trust account (after reduction for the aggregate amount of payments required to be made in connection with any valid stockholder redemptions), plus (y) the aggregate amount of cash that has been funded to and remains with Churchill pursuant to the Subscription Agreements as of immediately prior to the closing;
Churchill” are to Churchill Capital Corp III, a Delaware Corporation;
Churchill IPO” are to the initial public offering by Churchill which closed on February 19, 2020;
Churchill’s Class A common stock” are, prior to consummation of the Transactions, to Churchill’s Class A common stock, par value $0.0001 per share and, following consummation of the Transactions, to the Class A common stock, par value $0.0001 per share of the post-combination company;
Churchill’s Class B common stock” are to Churchill’s Class B common stock, par value $0.0001 per share;
Closing” are to the consummation of the Mergers;
Closing Date” are to the date on which the Transactions are consummated;
Common PIPE Investment” are to the private placement pursuant to which Churchill entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with certain investors whereby such investors have agreed to subscribe for (x) 130,000,000 shares of Churchill’s Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $1,300,000,000 and (y) warrants to purchase 6,500,000 shares of Churchill’s Class A Common Stock (for each share of Churchill’s Class A common stock subscribed, the investor shall receive 1/20th of a warrant to purchase one share of Churchill’s Class A common stock, with each whole warrant having a strike price of $12.50 per share and a 5-year maturity from the closing of the Transactions). The Common PIPE Investment is subject to an original issue discount (payable in additional shares of Churchill’s Class A common stock) of 1% for subscriptions of $250,000,000 or less and 2.5% for subscriptions of more than $250,000,000, which will result in an additional 2,050,000 shares of Churchill’s Class A common stock being issued;
Common PIPE Investors” are to the investors participating in the Common PIPE Investment;
Common PIPE Subscription Agreements” are to the common stock subscription agreements entered into (a) by and between Churchill and the PIF (the “PIF Common Subscription Agreement”) and (b) by and among Churchill, Holdings and MultiPlan Parent, on the one hand, and certain investment funds, on the other hand, (the “Other Common Subscription Agreements”), in each case, dated as of July 12, 2020 and entered into in connection with the Common PIPE Investment;
Common PIPE Warrants” are to the warrants issued in connection with the Common PIPE investment;
common stock” are to Churchill’s Class A common stock and Churchill’s Class B common stock;
completion window” are to the period following the completion of Churchill’s IPO at the end of which, if Churchill has not completed an initial business combination, it will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions. The completion window ends on February 19, 2022 (or May 19, 2022 if Churchill has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by February 19, 2022);
Convertible Notes” are to the senior PIK notes to be issued by Churchill in connection with the Convertible PIPE Investment;
 
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Convertible PIPE Investment” are to the private placement pursuant to which Churchill entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with certain investors whereby such Convertible PIPE Investors have agreed to buy $1,300,000,000 in aggregate principal amount of Convertible Notes;
Convertible PIPE Investors” are to the investors participating in the Convertible PIPE Investment;
Convertible Subscription Agreement” are to the subscription agreements, dated as of July 12, 2020, entered into in connection with the Convertible PIPE Investment;
Covered Stockholders” are to the Churchill stockholders that entered into the Voting and Support Agreements and the Non-Redemption Agreements;
current certificate of incorporation” are to Churchill’s amended and restated certificate of incorporation in effect as of the date of this proxy statement;
DGCL” are to the Delaware General Corporation Law, as amended;
Exchange Act” are to the Securities Exchange Act of 1934, as amended;
First Merger Sub” are to Music Merger Sub I, Inc.;
founder shares” are to shares of Churchill’s Class B common stock and Churchill’s Class A common stock issued upon the automatic conversion thereof at the time of Churchill’s initial business combination. The founder shares are held of record by the Sponsor as of the record date;
H&F” are to Hellman & Friedman Capital Partners VIII, L.P.;
HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
Holdings” are to Polaris Investment Holdings, L.P.;
Insiders” are to Michael Klein, Jay Taragin, Jeremy Paul Abson, Glenn R. August, Mark Klein, Malcolm S. McDermid, and Karen G. Mills;
Investor Rights Agreement” are to the Investor Rights Agreement, dated as of July 12, 2020, by and among Churchill, the Sponsor, Holdings, H&F, the PIF and certain other parties thereto;
KG” are to The Klein Group, LLC, an affiliate of Michael Klein and the Sponsor and an affiliate and wholly owned subsidiary of M. Klein and Company. KG (and not the Sponsor) was engaged by Churchill to act as Churchill’s financial advisor in connection with the Transactions, and as a placement agent in connection with the PIPE Investment as more fully described herein;
M. Klein and Company” are to M. Klein and Company, LLC, a Delaware limited liability company, and its affiliates;
Merger Agreement” are to that certain Agreement and Plan of Merger, dated as of July 12, 2020, by and among Churchill, MultiPlan Parent, Holdings, First Merger Sub and Second Merger Sub, as the same has been or may be amended, modified, supplemented or waived from time to time;
Mergers” are to, together, (i) the merger of First Merger Sub with and into MultiPlan Parent with MultiPlan Parent being the surviving company in the merger (the “First Merger”) and (ii) immediately following and as part of the same transaction as the First Merger, the merger of MultiPlan Parent with and into Second Merger Sub, with Second Merger Sub surviving the merger as a wholly owned subsidiary of Churchill (the “Second Merger”);
MultiPlan” are to, unless the context otherwise requires, collectively, MultiPlan Parent and its consolidated subsidiaries;
MultiPlan Parent” are to Polaris Parent Corp., a Delaware Corporation;
 
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Note” are to the unsecured promissory note issued by Churchill to the Sponsor in an aggregate principal amount of $1,500,000. The Sponsor has the option to convert any unpaid balance of the Note into Working Capital Warrants;
PIF” are to The Public Investment Fund of The Kingdom of Saudi Arabia;
PIPE Investment” are to, collectively, the Common PIPE Investment and the Convertible PIPE Investment;
Plan of Liquidation” are to the Plan of Liquidation and Dissolution and Distribution Agreement of Holdings, dated as of July 12, 2020, by and among Holdings, Polaris Investment Holdings GP, LLC and certain other parties hereto;
private placement warrants” are to Churchill’s warrants issued to the Sponsor in a private placement simultaneously with the closing of the Churchill IPO;
public shares” are to shares of Churchill’s Class A common stock sold as part of the units in the Churchill IPO (whether they were purchased in the Churchill IPO or thereafter in the open market);
public stockholders” are to the holders of Churchill’s public shares, including the Sponsor and Churchill’s officers and directors to the extent the Sponsor and Churchill’s officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;
public warrants” are to Churchill’s warrants sold as part of the units in the Churchill IPO (whether they were purchased in the Churchill IPO or thereafter in the open market);
SEC” are to the United States Securities and Exchange Commission;
Second Merger Sub” are to Music Merger Sub II LLC;
Sponsor” are to Churchill Sponsor III, LLC, a Delaware limited liability company and an affiliate of M. Klein and Company in which certain of Churchill’s directors and officers hold membership interests;
Sponsor Agreement” are to the Amended and Restated Sponsor Agreement, dated as of July 12, 2020, by and among Churchill, the Sponsor and the Insiders;
Subscription Agreements” are to, collectively, the Common PIPE Subscription Agreements and the Convertible PIPE Subscription Agreements;
Transactions” are to the Mergers, together with the other transactions contemplated by the Merger Agreement and the related agreements;
trust account” are to the trust account of Churchill that holds the proceeds from the Churchill IPO;
warrants” are to the public warrants, the private placement warrants, the Common PIPE Warrants and the Working Capital Warrants; and
Working Capital Warrants” are to the warrants to purchase Churchill’s Class A common stock pursuant to the terms of the Note, on terms identical to the terms of the private placement warrants.
 
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SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS
This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

Churchill Capital Corp III, a Delaware corporation, which we refer to as “Churchill,” “we,” “us,” or “our,” is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On February 19, 2020, Churchill consummated its initial public offering of 110,000,000 units, including 10,000,000 units under the underwriters’ over-allotment option, with each unit consisting of one share of Churchill’s Class A common stock and one-fourth of one warrant, each whole warrant to purchase one share of Churchill’s Class A common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $1,100,000,000. Simultaneously with the consummation of the initial public offering, Churchill consummated the private placement of 23,000,000 warrants at a price of $1.00 per warrant, generating total proceeds of $23,000,000. Transaction costs amounted to $57,620,020 consisting of $18,402,000 of underwriting fees, $38,500,000 of deferred underwriting fees and $718,020 of other offering costs.

Following the consummation of the Churchill IPO, $1,100,000,000 was deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. Except as described in the prospectus for the Churchill IPO, these proceeds will not be released until the earlier of the completion of an initial business combination and Churchill’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the completion window.

MultiPlan is a leading value-added provider of data analytics and technology-enabled end-to-end cost management solutions to the U.S. healthcare industry as measured by revenue and claims processed. MultiPlan delivers these critical solutions through its Analytics-Based Services, which reduce medical costs for consumers and payors via data-driven algorithms which detect claims anomalies; its Network-Based Services, which reduce medical costs through contracted discounts with healthcare providers and include one of the largest independent preferred provider organizations in the United States; and its Payment Integrity Services, which reduce medical costs by identifying and removing improper and unnecessary charges before claims are paid. Holdings is a holding company and the parent entity of MultiPlan Parent. See the sections entitled “Information About MultiPlan,” “MultiPlan Parent’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Business Combination.

On July 12, 2020, Churchill entered into an Agreement and Plan of Merger with MultiPlan Parent, Holdings, First Merger Sub and Second Merger Sub, which among other things, provides for (i) First Merger Sub to be merged with and into MultiPlan Parent with MultiPlan Parent being the surviving company in the First Merger and (ii) MultiPlan Parent to be merged with and into Second Merger Sub, with Second Merger Sub surviving the Second Merger as a wholly owned subsidiary of Churchill.

On July 12, 2020, Holdings entered into a Plan of Liquidation and Dissolution and Distribution Agreement, which, among other things, provides for (i) the wind up of business affairs of Holdings, (ii) on the day prior to the Closing Date, the distribution by Holdings of beneficial ownership of its MultiPlan Parent stock to Holdings’ equityholders and (iii) on the Closing Date, the receipt and distribution by Holdings, as agent on behalf of Holdings’ equityholders, of the Closing Merger Consideration to Holdings’ equityholders.

Subject to the terms of the Merger Agreement, the aggregate consideration to be paid to Holdings, as agent on behalf of Holdings’ equityholders, will be equal to $5,678,000,000 (the “Closing Merger Consideration”) and will be paid in a combination of stock and cash consideration. The cash consideration will be an amount equal to (i) (x) all amounts in the trust account (after reduction for the aggregate amount of payments required to be made in connection with any valid stockholder
 
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redemptions), plus (y) the aggregate amount of cash that has been funded to and remains with Churchill pursuant to the Subscription Agreements as of immediately prior to the closing, minus (ii) the aggregate principal amount of MultiPlan Parent’s outstanding 8.500% / 9.250% Senior PIK Toggle Notes due 2022 (excluding any accrued and unpaid interest or applicable premium thereunder) (such amount, the “Closing Cash Consideration”); provided, that in no event will the Closing Cash Consideration be greater than $1,521,000,000. The remainder of the Closing Merger Consideration will be paid in shares of Churchill’s Class A common stock in an amount equal to $10.00 per share (the “Closing Share Consideration”).

In connection with the Merger Agreement, MultiPlan Parent and Holdings entered into the Voting and Support Agreements with certain Churchill stockholders pursuant to which such stockholders have agreed to vote in favor of the business combination proposal and the other proposals described in this proxy statement. Under the Voting and Support Agreements, when taken together with the Sponsor’s agreement to vote in favor of the proposals described in this proxy statement, approximately 41% of the outstanding common stock of Churchill has agreed to vote in favor of the proposals described in this proxy statement. In addition, the 9,094,876 shares of Churchill Class A common stock (representing approximately 6.6% of the outstanding shares of Churchill’s common stock as of the record date for the special meeting) owned by a subsidiary of MultiPlan Parent will be voted in the same proportion as the shares of Churchill’s common stock actually voted by holders thereof other than MultiPlan Parent and its subsidiaries in respect of each of the proposals to be voted on at the special meeting.

In connection with the execution of the Merger Agreement, certain stockholders of Churchill entered into the Non-Redemption Agreements with Churchill, Holdings and MultiPlan Parent, pursuant to which, among other things, such stockholders owning in the aggregate 28,979,500 shares of Churchill’s Class A common stock (which as of September 14, 2020, the record date for the special meeting, represented approximately $290,000,000 of funds in the trust account) agreed not to elect to redeem or tender or submit for redemption any shares of Churchill’s Class A common stock held by such stockholders (a “Redemption Election,” and such shares “Redeemed Shares”), and if any such stockholder fails to comply and a Redemption Election is made with respect to any of such stockholder’s Redeemed Shares, such stockholder unconditionally and irrevocably agrees to subscribe for and purchase, from Holdings (or from its assignee(s) or designee(s), including, if applicable, its equityholders), the same number of such Redeemed Shares, for a per share purchase price equal to the amount to be received for each Redeemed Share in connection with such Redemption Election.

In general, the Voting and Support Agreements prohibit the transfer of shares of Churchill’s Class A common stock held by the stockholders party thereto. However, certain of the Voting and Support Agreements and Non-Redemption Agreements permit the stockholders party thereto to transfer the shares of Churchill’s Class A common stock held by such stockholders at any time following the date that the closing price of the shares of Churchill’s Class A common stock equals or exceeds $15.00 per share, as adjusted for certain events, for any fifteen (15) trading days within any consecutive twenty (20)-trading day period commencing on July 30, 2020. A total of 3,550,000 shares of Churchill’s Class A common stock are subject to the foregoing permitted transfer provisions of the Voting and Support Agreements.

Pursuant to the Common PIPE Investment, Churchill has agreed to issue and sell to the Common PIPE Investors, and the Common PIPE Investors have agreed to buy from Churchill (x) 130,000,000 shares of Churchill’s Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $1,300,000,000 and (y) warrants to purchase 6,500,000 shares of Churchill’s Class A Common Stock (for each share of Churchill’s Class A common stock subscribed, the investor shall receive 1/20th of a warrant to purchase one share of Churchill’s Class A common stock, with each whole warrant having a strike price of $12.50 per share and a 5-year maturity from the closing of the Transactions). The Common PIPE Investment is subject to an original issue discount (payable in additional shares of Churchill’s Class A common stock) of 1% for subscriptions of $250,000,000 or less and 2.5% for subscriptions of more than $250,000,000, which will result in an additional 2,050,000 shares of Churchill’s Class A common stock being issued.
 
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Pursuant to the Convertible Pipe Investment, the Convertible PIPE Investors will provide convertible debt financing in the form of convertible senior PIK notes to be issued by Churchill in the aggregate principal amount of $1,300,000,000. The Convertible Notes will mature in seven years. The coupon rate of the Convertible Notes is, at Churchill’s option, 6% per annum payable semi-annually in arrears in cash or 7% per annum payable semi-annually in arrears in-kind. Holders may convert the Convertible Notes into shares of Churchill’s Class A common stock based on a $13.00 conversion price, subject to customary anti-dilution adjustments. Churchill may redeem the Convertible Notes after the third anniversary of their issuance, subject to a holder’s prior right to convert, if the trading price of Churchill’s Class A common stock exceeds 130% of the conversion price twenty (20) out of the preceding thirty (30) trading days. There will be customary registration rights with respect to Churchill’s Class A common stock issuable upon conversion of the Convertible Notes. Subject to the condition that the Convertible PIPE Investment is funded in full on the Closing Date, the Convertible Notes will be guaranteed by a subsidiary of MultiPlan Parent. The Convertible Notes are being issued with an original issue discount of 2.5%.

It is anticipated that, upon completion of the business combination: (i) Churchill’s public stockholders (other than the Common PIPE Investors) will retain an ownership interest of approximately 16.0% in the post-combination company; (ii) the Common PIPE Investors will own approximately 19.2% of the post-combination company; (iii) the Sponsor (and its affiliates) will own approximately 4.2% of the post-combination company; and (iv) current indirect investors in MultiPlan Parent will own approximately 60.5% of the post-combination company. These levels of ownership interest: (i) exclude the impact of the shares of Churchill’s Class A common stock underlying warrants and the Convertible Notes and (ii) assume that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account.

Churchill management and the Churchill Board considered various factors in determining whether to approve the Merger Agreement and the Transactions contemplated thereby, including the Mergers. For more information about the reasons that the Churchill Board considered in determining its recommendation, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Churchill Board’s Reasons for the Approval of the Transactions.” When you consider the Churchill Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of Churchill stockholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for additional information. The Churchill Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the Churchill stockholders that they vote “FOR” the proposals presented at the special meeting.

At the special meeting, Churchill’s stockholders will be asked to consider and vote on the following proposals:

a proposal to approve the business combination described in this proxy statement, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;

a proposal to approve and adopt the second amended and restated certificate of incorporation of Churchill in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;

a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in the second amended and restated certificate of incorporation, presented separately in accordance with requirements of the SEC. Please see the section entitled “Proposal No. 3 — The Governance Proposal”;

a proposal to approve and adopt the Incentive Plan and the material terms thereunder, including the authorization of the initial share reserve thereunder. Please see the section entitled “Proposal No. 4 — The Incentive Plan Proposal”;
 
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a proposal to elect nine directors to serve staggered terms on the Churchill Board until immediately following the 2021, 2022 and 2023 annual meetings of Churchill stockholders, as applicable, and until their respective successors are duly elected and qualified. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;

a proposal to approve, for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, (a) the issuance of more than 20% of Churchill’s issued and outstanding shares of common stock in connection with the Transactions, including, without limitation, the PIPE Investment and the issuance of more than 20% of Churchill’s issued and outstanding shares to a single holder (which may constitute a change of control under the NYSE’s Listed Company Manual) and (b) the issuance of shares of Churchill Class A common stock to a Related Party (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Transactions. Please see the section entitled “Proposal No. 6 — The NYSE Proposal”; and

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal.”

Upon consummation of the Transactions, the Churchill Board anticipates each Class I director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2021, each Class II director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2022 and each Class III director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2023, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. Please see the sections entitled “Proposal No. 5 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
 
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the proposed business combination. The following questions and answers do not include all the information that is important to Churchill stockholders. Stockholders are urged to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed business combination and the voting procedures for the special meeting.
Q.
Why am I receiving this proxy statement?
A.
Churchill and MultiPlan Parent have agreed to a business combination under the terms of the Merger Agreement that is described in this proxy statement. A copy of the Merger Agreement is attached to this proxy statement as Annex A, and Churchill encourages its stockholders to read it in its entirety. Churchill’s stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the transactions contemplated thereby, which, among other things, includes provisions for (a) First Merger Sub to be merged with and into MultiPlan Parent with MultiPlan Parent being the surviving corporation in the First Merger and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, MultiPlan Parent to be merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of Churchill in the Second Merger. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal.”
This proxy statement and its Annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its Annexes carefully and in their entirety.
Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.
Q.
When and where is the Special Meeting?
A.
The special meeting will be held via live webcast on October 7, 2020 at 10:00 a.m. Eastern Time. The special meeting can be accessed by visiting https://www.cstproxy.com/churchillcapitaliii/2020, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.
Q.
What are the proposals on which I am being asked to vote at the special meeting?
A.
The stockholders of Churchill will be asked to consider and vote on the following proposals at the special meeting:
1.
a proposal to approve the business combination described in this proxy statement, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;
2.
a proposal to approve and adopt the second amended and restated certificate of incorporation of Churchill in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;
3.
a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in the second amended and restated certificate of incorporation, presented separately, in accordance with the requirements of the SEC. Please see the section entitled “Proposal No. 3 — The Governance Proposal”;
4.
a proposal to approve and adopt the Incentive Plan and the material terms thereunder, including the authorization of the initial share reserve thereunder. Please see the section entitled “Proposal No. 4 — The Incentive Plan Proposal”;
 
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5.
a proposal to elect nine directors to serve staggered terms on the Churchill Board until immediately following the 2021, 2022 and 2023 annual meetings of Churchill stockholders, as applicable, and until their respective successors are duly elected and qualified. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;
6.
a proposal to approve, for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, (a) the issuance of more than 20% of Churchill’s issued and outstanding shares of common stock in connection with the Transactions, including, without limitation, the PIPE Investment and the issuance of more than 20% of Churchill’s issued and outstanding shares to a single holder (which may constitute a change of control under the NYSE’s Listed Company Manual) and (b) the issuance of shares of Churchill Class A common stock to a Related Party (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Transactions. Please see the section entitled “Proposal No. 6 — The NYSE Proposal”; and
7.
a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal.”
Churchill will hold the special meeting of its stockholders to consider and vote upon these proposals. This proxy statement contains important information about the proposed business combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.
Consummation of the Transactions is conditioned on the approval of each of the business combination proposal, the charter proposal, the incentive plan proposal and the NYSE proposal. If any of those proposals are not approved, we will not consummate the Transactions.
The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement.
Q.
Why is Churchill proposing the business combination?
A.
Churchill was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.
On February 19, 2020, Churchill completed its initial public offering of units, with each unit consisting of one share of its Churchill’s Class A common stock and one-quarter of one warrant, each whole warrant to purchase one share of Churchill’s Class A common stock at a price of $11.50, raising total gross proceeds of approximately $1,100,000,000. Since the Churchill IPO, Churchill’s activity has been limited to the evaluation of business combination candidates.
MultiPlan is a leading value-added provider of data analytics and technology-enabled end-to-end cost management solutions to the U.S. healthcare industry as measured by revenue and claims processed.
The Churchill Board considered the results of the due diligence review of MultiPlan’s business, including its comprehensive and diverse data, intellectual property, and network assets, its payor customers and its ability to enhance, extend and expand the MultiPlan platform. The Churchill Board also considered MultiPlan’s current prospects for growth in executing upon and achieving its business plan, and its ability to expand the reach of its proprietary platform by integrating new data sources/algorithms, improving API depth and quality, and creating a payment value-add platform-as-a-service.
As a result, Churchill believes that a business combination with MultiPlan will provide Churchill stockholders with an opportunity to participate in the ownership of a company with significant growth potential. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Churchill Board’s Reasons for Approval of the Transactions.
 
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Q.
Why is Churchill providing stockholders with the opportunity to vote on the business combination?
A.
Under our current certificate of incorporation, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the business combination proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the closing of the business combination.
Q.
What will happen in the business combination?
A.
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, Churchill will acquire MultiPlan in a series of transactions we collectively refer to as the business combination. At the closing of the business combination contemplated by the Merger Agreement, among other things, (i) First Merger Sub will merge with and into MultiPlan Parent with MultiPlan Parent being the surviving corporation in the First Merger as a wholly owned subsidiary of Churchill and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, MultiPlan Parent will be merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of Churchill in the Second Merger. As a result of the Mergers, at the closing of the business combination, Churchill will own 100% of the outstanding common stock of Second Merger Sub and each share of common stock of MultiPlan Parent will have been cancelled and converted into the right to receive a portion of the merger consideration.
Q.
Following the business combination, will Churchill’s securities continue to trade on a stock exchange?
A.
Yes. We intend to apply to continue the listing of Churchill’s Class A common stock and public warrants on NYSE. In connection with the business combination, Churchill will change its name to MultiPlan Corporation and its Class A common stock and warrants will begin trading on the NYSE under the symbols “MPLN” and “MPLN.WS” respectively. As a result, our publicly traded units will separate into the component securities upon consummation of the business combination and will no longer trade as a separate security.
Q.
How will the business combination impact the shares of Churchill outstanding after the business combination?
A.
As a result of the business combination and the consummation of the transactions contemplated by the Merger Agreement and the related agreements, including, without limitation, the PIPE Investment, the amount of common stock outstanding will increase by approximately 500% to approximately 686,800,000 shares of Churchill’s Class A common stock (assuming that no shares of Churchill’s Class A common stock are elected to be redeemed by Churchill stockholders). Additional shares of Churchill’s Class A common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including issuance of shares of Churchill’s Class A common stock upon exercise of the warrants, and/or conversion of the Convertible Notes after the business combination. The issuance and sale of such shares in the public market could adversely impact the market price of Churchill’s Class A common stock, even if its business is doing well. Pursuant to the Incentive Plan, a copy of which is attached to this proxy statement as Annex H, following the closing of the business combination and subject to the approval of the applicable award agreements by the post-combination Board, Churchill may grant an aggregate amount of up to 85,850,000 additional shares of Churchill’s Class A common stock.
Q.
Will the management of MultiPlan change in the business combination?
A.
We anticipate that all of the executive officers of MultiPlan will remain with the post-combination company, and Paul Galant will join the post-combination company as President, New Markets. In addition, Allen Thorpe, Hunter Philbrick, Paul Emery and Mark Tabak have each been nominated to
 
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serve as directors of Churchill following completion of the business combination. Please see the sections entitled “Proposal No. 5 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
Q.
What equity stake will current stockholders of MultiPlan Parent, the Common PIPE Investors, the Convertible PIPE Investors and Holdings hold in the post-combination company after the closing?
It is anticipated that, upon completion of the business combination: (i) Churchill’s public stockholders (other than the Common PIPE Investors) will retain an ownership interest of approximately 16.0% in the post-combination company; (ii) the Common PIPE Investors will own approximately 19.2% of the post-combination company; (iii) the Sponsor (and its affiliates) will own approximately 4.2% of the post-combination company; and (iv) current indirect investors in MultiPlan Parent will own approximately 60.5% of the post-combination company. These levels of ownership interest: (i) exclude the impact of the shares of Churchill’s Class A common stock underlying the warrants and the Convertible Notes and (ii) assume that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account.
For more information, please see the sections entitled “Summary of the Proxy Statement — Impact of the Business Combination on the Post-Combination Company’s Public Float,” “Unaudited Pro Forma Condensed Combined Financial Information” and “Proposal No. 4 — The Incentive Plan Proposal.”
Q.
Will Churchill obtain new financing in connection with the Transactions?
A.
Yes. Churchill has entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with the Common PIPE Investors, pursuant to which Churchill has agreed to issue and sell to the Common PIPE Investors and the Common PIPE Investors have agreed to buy from Churchill (x) 130,000,000 shares of Churchill’s Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $1,300,000,000 and (y) warrants to purchase 6,500,000 shares of Churchill’s Class A Common Stock (for each share of Churchill’s Class A common stock subscribed, the investor shall receive 1/20th of a warrant to purchase one share of Churchill’s Class A common stock, with each whole warrant having a strike price of $12.50 per share and a 5-year maturity from the closing of the Transactions). The Common PIPE Investment is subject to an original issue discount (payable in additional shares of Churchill’s Class A common stock) of 1% for subscriptions of $250,000,000 or less and 2.5% for subscriptions of more than $250,000,000, which will result in an additional 2,050,000 shares of Churchill’s Class A common stock being issued. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Sources and Uses for the Business Combination.”
Churchill has also entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with the Convertible PIPE Investors pursuant to which Churchill will issue and sell to the Convertible PIPE Investors Convertible Notes in an aggregate principal amount of $1,300,000,000. The proceeds of the Convertible PIPE Investment will be used to fund a portion of the amount necessary to consummate the Transactions, including the repayment of certain specified debt of a subsidiary of MultiPlan Parent.
Q.
What conditions must be satisfied to complete the Business Combination?
A.
There are a number of closing conditions in the Merger Agreement, including the expiration or termination of the applicable waiting period under the HSR Act (which occurred on August 4, 2020) and the approval by the stockholders of Churchill of the business combination proposal, the NYSE proposal, the charter proposal and the incentive plan proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Merger Agreement.”
 
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Q.
Are there any arrangements to help ensure that Churchill will have sufficient funds, together with the proceeds in its trust account and from the PIPE Investment, to fund the aggregate purchase price?
A.
The Merger Agreement provides that the consummation of the Transactions is conditioned upon, among other things, Churchill having at least $5,000,001 of net tangible assets as of the closing of the Transactions. Additionally, the obligations of MultiPlan Parent to consummate the Transactions are conditioned upon, among others, the amount of cash available in Churchill’s trust account plus the aggregate amount of cash that has been funded to and remains with Churchill pursuant to the PIPE Investment as of immediately prior to closing being least $2,700,000,000.
Certain Churchill stockholders have entered into Non-Redemption Agreement, pursuant to which the Covered Stockholders owning in the aggregate 28,979,500 shares of Churchill’s Class A common stock (which as of September 14, 2020, the record date for the special meeting, represented approximately $290,000,000 of funds in the trust account) agreed not to elect to redeem or tender or submit for redemption any shares of Churchill’s Class A common stock held by such stockholder. The Non-Redemption Agreements generally prohibit the Covered Stockholders from transferring, or permitting to exist any liens on, any such shares of Churchill’s Class A common stock held by such Covered Stockholders prior to the termination of the Non-Redemption Agreements, if such lien would prevent such Covered Stockholders from complying with their respective obligations thereunder. Certain of the Non-Redemption Agreements permit the Covered Stockholder party thereto to transfer its shares of Churchill’s Class A common stock following the date that the closing price of the shares of Churchill’s Class A common stock equals or exceeds $15.00 per share, as adjusted for certain events, for any fifteen (15) trading days within any consecutive twenty (20) trading day period commencing on July 30, 2020. A total of 3,550,000 shares of Churchill’s Class A common stock are subject to the permitted transfer provisions of the Non-Redemption Agreements described above.
Assuming (i) the Common PIPE Investment and the Convertible PIPE Investment are funded in accordance with their terms and (ii) the Covered Stockholders do not elect to redeem any shares of Churchill’s Class A common stock in accordance with the Non-Redemption Agreements, the condition that Churchill have at least $2,700,000,000 in cash as of immediately prior to the closing will be satisfied.
Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Sources and Uses for the Business Combination.”
Q.
What happens if I sell my shares of Churchill’s Class A common stock before the special meeting?
A.
The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of Churchill’s Class A common stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Churchill’s Class A common stock because you will no longer be able to deliver them for cancellation upon consummation of the business combination. If you transfer your shares of Churchill’s Class A common stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in our trust account.
Q.
What constitutes a quorum at the special meeting?
A.
A majority of the voting power of all issued and outstanding shares of common stock entitled to vote as of the record date at the special meeting must be present via the virtual meeting platform, or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Abstentions will be counted as present for the purpose of determining a quorum. As of the record date for the special meeting, 68,750,001 shares of our common stock would be required to be present at the special meeting to achieve a quorum.
 
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Q.
What vote is required to approve the proposals presented at the special meeting?
A.
The approval of each of the business combination proposal, the governance proposal (which is a non-binding advisory vote), the incentive plan proposal, the NYSE proposal and the adjournment proposal require the affirmative vote of a majority of the votes cast by holders of Churchill’s outstanding shares of common stock represented at the special meeting by attendance via the virtual meeting website or by proxy and entitled to vote at the special meeting. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the business combination proposal, the governance proposal, the incentive plan proposal, the NYSE proposal and the adjournment proposal will have no effect on such proposals.
The approval of the charter proposal requires the affirmative vote of holders of a majority of Churchill’s outstanding shares of common stock entitled to vote thereon at the special meeting. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the charter proposal will have the same effect as a vote “against” such proposal.
Directors are elected by a plurality of all of the votes cast by holders of shares of Churchill’s common stock represented at the special meeting by attendance via the virtual meeting website or by proxy and entitled to vote thereon at the special meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Churchill stockholders may not cumulate their votes with respect to the election of directors. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the director election proposal will have no effect on such proposal.
Q.
How many votes do I have at the special meeting?
A.
Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of common stock held of record as of September 14, 2020, the record date for the special meeting. As of the close of business on the record date, there were 137,500,000 outstanding shares of our common stock.
Q.
Why is Churchill proposing the governance proposal?
A.
As required by applicable SEC guidance, Churchill is requesting that its stockholders vote upon, on a non-binding advisory basis, a proposal to approve certain governance provisions contained in the second amended and restated certificate of incorporation that materially affect stockholder rights. This separate vote is not otherwise required by Delaware law separate and apart from the charter proposal, but pursuant to SEC guidance, Churchill is required to submit these provisions to its stockholders separately for approval. However, the stockholder vote regarding this proposal is an advisory vote, and is not binding on Churchill and the Churchill Board (separate and apart from the approval of the charter proposal). Furthermore, the business combination is not conditioned on the separate approval of the governance proposal (separate and apart from approval of the charter proposal). Please see the section entitled “Proposal No. 3 — The Governance Proposal.”
Q.
Did the Churchill Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination?
A.
The Churchill Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the business combination with MultiPlan Parent. The officers and directors of Churchill, including Mr. Klein, have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Churchill’s financial and other advisors, including KG and Citi, as well as having consulted with a leading consulting firm regarding the market opportunity, competitive landscape, growth plans and regulatory structure of MultiPlan, enabled them to perform the necessary analyses and make determinations regarding the Transactions. In addition, Churchill’s officers and directors and Churchill’s advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the Churchill
 
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Board in valuing MultiPlan’s business, and assuming the risk that the Churchill Board may not have properly valued such business.
Q.
Do I have redemption rights?
A.
If you are a holder of public shares, you have the right to demand that Churchill redeem such shares for a pro rata portion of the cash held in Churchill’s trust account provided that you vote either “for” or “against” the business combination proposal. Churchill sometimes refers to these rights to demand redemption of the public shares as “redemption rights.”
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed.
Under Churchill’s current certificate of incorporation, the business combination may be consummated only if Churchill has at least $5,000,001 of net tangible assets after giving effect to all holders of public shares that properly demand redemption of their shares for cash.
Q.
How do I exercise my redemption rights?
A.
If you are a holder of public shares and wish to exercise your redemption rights, you must demand that Churchill redeem your shares into cash no later than the second business day preceding the vote on the business combination proposal by delivering your stock to Churchill’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the special meeting. Any holder of public shares will be entitled to demand that such holder’s shares be redeemed for a full pro rata portion of the amount then in the trust account (which, for illustrative purposes, was approximately $1,104,000,000 or $10.04 per share, as of September 14, 2020, the record date for the special meeting). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the business combination. However, under Delaware law, the proceeds held in the trust account could be subject to claims which could take priority over those of Churchill’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the business combination proposal. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the business combination proposal will have no impact on the amount you will receive upon exercise of your redemption rights.
Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the business combination proposal at the special meeting. If you deliver your shares for redemption to Churchill’s transfer agent and later decide prior to the special meeting not to elect redemption, you may request that Churchill’s transfer agent return the shares (physically or electronically). You may make such request by contacting Churchill’s transfer agent at the address listed at the end of this section.
Any corrected or changed proxy card or written demand of redemption rights must be received by Churchill’s transfer agent prior to the vote taken on the business combination proposal at the special meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent prior to the vote at the special meeting.
If a holder of public shares votes for or against the business combination proposal and demand is properly made as described above, then, if the business combination is consummated, Churchill will redeem these shares for a pro rata portion of funds deposited in the trust account. If you exercise your redemption rights, then you will be exchanging your shares of Churchill common stock for cash.
 
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Q.
Do I have appraisal rights if I object to the proposed business combination?
A.
No. Neither Churchill stockholders nor its unit or warrant holders have appraisal rights in connection with the business combination under the DGCL. Please see the section entitled “Special Meeting of Churchill Stockholders — Appraisal Rights.
Q.
What happens to the funds deposited in the trust account after consummation of the business combination?
A.
The net proceeds of the Churchill IPO, a total of $1,100,000,000, were placed in the trust account immediately following the Churchill IPO. After consummation of the business combination, the funds in the trust account will be used to pay holders of the public shares who exercise redemption rights, to pay fees and expenses incurred in connection with the business combination (including aggregate fees of up to $38,500,000 as deferred underwriting commissions) and to fund the Closing Merger Consideration Please see the section entitled “Proposal No. 1 — The Business Combination — Sources and Uses for the Business Combination.”
Q.
What happens if a substantial number of public stockholders vote in favor of the business combination proposal and exercise their redemption rights?
A.
Churchill’s public stockholders may vote in favor of the business combination and still exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the trust account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders.
Certain Churchill stockholders have entered into a Non-Redemption Agreement, pursuant to which the Covered Stockholders owning in the aggregate 28,979,500 shares of Churchill’s Class A common stock (which as of September 14, 2020, the record date for the special meeting, represented approximately $290,000,000 of funds in the trust account) agreed not to elect to redeem or tender or submit for redemption any shares of Churchill’s Class A common stock held by such stockholder.
Q.
What happens if the business combination is not consummated?
A.
If Churchill does not complete the business combination with MultiPlan for whatever reason, Churchill would search for another target business with which to complete a business combination. If Churchill does not complete a business combination with MultiPlan or another target business by February 19, 2022 (or May 19, 2022 if Churchill has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by February 19, 2022), Churchill must redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the amount then held in the trust account divided by the number of outstanding public shares. The Sponsor and the Insiders have no redemption rights in the event a business combination is not effected in the completion window, and, accordingly, their founder shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to Churchill’s outstanding warrants. Accordingly, the warrants will be worthless.
Q.
How does the Sponsor intend to vote on the proposals?
A.
The Sponsor owns of record and is entitled to vote an aggregate of 20% of the outstanding shares of Churchill’s common stock as of the record date. The Sponsor and the Insiders have agreed to vote any founder shares and any public shares held by them as of the record date, in favor of the Transactions. The Sponsor and Insiders may have interests in the business combination that may conflict with your interests as a stockholder, see the sections entitled “Summary of the Proxy Statement — Interests of Certain Persons in the Business Combination” and “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.
Q.
When do you expect the business combination to be completed?
A.
It is currently anticipated that the business combination will be consummated promptly following the Churchill special meeting which is set for October 7, 2020, subject to the satisfaction of customary
 
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closing conditions; however, such meeting could be adjourned, as described above. For a description of the conditions to the completion of the business combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Merger Agreement — Conditions to the Closing of the Transactions.
Q.
What do I need to do now?
A.
Churchill urges you to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the business combination will affect you as a stockholder and/or warrant holder of Churchill. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card, or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or other nominee.
Q.
How do I vote?
A.
The special meeting will be held via live webcast at 10:00 a.m. Eastern Time, on October 7, 2020. The special meeting can be accessed by visiting https://www.cstproxy.com/churchillcapitaliii/2020, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.
If you are a holder of record of Churchill common stock on September 14, 2020, the record date for the special meeting, you may vote at the special meeting via the virtual meeting platform or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote, obtain a proxy from your broker, bank or nominee.
Q.
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A.
No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the proposals presented to the stockholders at the special meeting will be considered non-routine and, therefore, your broker, bank or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. If you do not provide instructions with your proxy, your broker, bank or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Q.
How will a broker non-vote impact the results of each proposal?
A.
Broker non-votes will count as a vote “AGAINST” the charter proposal but will not have any effect on the outcome of any other proposals.
Q.
May I change my vote after I have mailed my signed proxy card?
A.
Yes. Stockholders of record may send a later-dated, signed proxy card to Churchill’s transfer agent at the address set forth at the end of this section so that it is received prior to the vote at the special meeting
 
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or attend the special meeting and vote. Stockholders also may revoke their proxy by sending a notice of revocation to Churchill’s transfer agent, which must be received prior to the vote at the special meeting.
Q.
What happens if I fail to take any action with respect to the special meeting?
A.
If you fail to take any action with respect to the special meeting and the business combination is approved by stockholders, the business combination will be consummated in accordance with the terms of the Merger Agreement. As a corollary, failure to vote either for or against the business combination proposal means you will not have any redemption rights in connection with the business combination to exchange your shares of common stock for a pro rata share of the funds held in Churchill’s trust account. If you fail to take any action with respect to the special meeting and the business combination is not approved, we will not consummate the business combination.
Q.
What will happen if I sign and return my proxy card without indicating how I wish to vote?
A.
Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.
Q.
What should I do if I receive more than one set of voting materials?
A.
Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction 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 holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Churchill shares.
Q.
Who can help answer my questions?
A.
If you have questions about the Transactions or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:
Churchill Capital Corp III
640 Fifth Avenue, 12th Floor
New York, NY 10019
Tel: (212) 380-7500
Email: info@churchillcapitalcorp.com
or:
[MISSING IMAGE: lg_mackenzie-bw.jpg]
1407 Broadway, 27th Floor
New York, New York 10018
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
Email: proxy@mackenziepartners.com
 
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To obtain timely delivery, our stockholders must request any additional materials no later than five business days prior to the special meeting. You may also obtain additional information about Churchill from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your stock (either physically or electronically) to Churchill’s transfer agent at the address below prior to the vote at the special meeting. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Redemption.”
If you have questions regarding the certification of your position or delivery of your stock, please contact:
Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
(212) 509-4000
 
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SUMMARY OF THE PROXY STATEMENT
This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the special meeting, including the business combination proposal, you should read this entire document carefully, including the Merger Agreement attached as Annex A to this proxy statement. The Merger Agreement is the legal document that governs the Transactions that will be undertaken in connection with the business combination. It is also described in detail in this proxy statement in the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Merger Agreement.”
The Parties
Churchill
Churchill Capital Corp III is a blank check company formed in order to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities. Churchill was incorporated under the laws of Delaware on October 30, 2019.
On February 19, 2020, Churchill closed its initial public offering of 110,000,000 units, including the exercise of the over-allotment option to the extent of 10,000,000 units, with each unit consisting of one share of its Class A common stock and one-fourth of one warrant, each whole warrant to purchase one share of its Class A common stock at a purchase price of  $11.50 per share, subject to adjustment as provided in Churchill’s final prospectus filed with the Securities and Exchange Commission on February 14, 2020 (File No. 333-236153). The units from the Churchill IPO were sold at an offering price of  $10.00 per unit, generating total gross proceeds of  $1,100,000,000.
Simultaneously with the consummation of the Churchill IPO and the exercise of the underwriters’ over-allotment option, Churchill consummated the private sale of 23,000,000 warrants at $1.00 per warrant for an aggregate purchase price of  $23,000,000. A total of  $1,100,000,000, was deposited into the trust account and the remaining net proceeds became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The Churchill IPO was conducted pursuant to a registration statement on Form S-1 that became effective on February 13, 2020. As of September 14, 2020, the record date for the special meeting, there was approximately $1,104,000,000 held in the trust account.
Churchill’s units, Class A common stock and warrants are listed on the NYSE under the symbols CCXX.U, CCXX and CCXX.WS, respectively.
The mailing address of Churchill’s principal executive office is 640 Fifth Avenue, 12th Floor, New York, NY 10019. Its telephone number is (212) 380-7500. After the consummation of the business combination, its principal executive office will be that of MultiPlan Parent.
Music Merger Sub I, Inc.
Music Merger Sub I, Inc. is a wholly owned subsidiary of Churchill formed solely for the purpose of effectuating the First Merger described herein. First Merger Sub was incorporated under the laws of Delaware as a corporation on July 6, 2020. First Merger Sub owns no material assets and does not operate any business.
The mailing address of First Merger Sub’s principal executive office is 640 Fifth Avenue, 12th Floor, New York, NY 10019. Its telephone number is (212) 380-7500. After the consummation of the business combination, First Merger Sub will cease to exist as a separate legal entity.
Music Merger Sub II LLC
Music Merger Sub II LLC is a wholly owned subsidiary of Churchill formed solely for the purpose of effectuating the Second Merger described herein. Second Merger Sub was formed under the laws of Delaware as a limited liability company on July 6, 2020. Second Merger Sub owns no material assets and does not operate any business.
 
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The mailing address of Second Merger Sub’s principal executive office is 640 Fifth Avenue, 12th Floor, New York, NY 10019. Its telephone number is (212) 380-7500. After the consummation of the business combination, Second Merger Sub will continue as a wholly owned subsidiary of Churchill and successor to MultiPlan Parent.
Holdings
Polaris Investment Holdings, L.P. is a holding company and the parent entity of MultiPlan Parent Holdings was formed as a limited partnership under the laws of Delaware on May 2, 2016 in connection with its acquisition of MultiPlan, Inc. in 2016.
The mailing address of Holdings’ principal executive office is c/o Hellman & Friedman LLC, 415 Mission Street, Suite 5700, San Francisco, CA 94105. Holdings’ telephone number is (415) 788-5111.
Pursuant to the Plan of Liquidation, on the day prior to the Closing Date, Holdings will distribute beneficial ownership of its MultiPlan Parent stock to Holdings’ equityholders and Holdings will, as agent on behalf of Holdings’ equityholders, receive and distribute the merger consideration to Holdings’ equityholders. After the consummation of the business combination, Holdings will be finally dissolved.
MultiPlan Parent
MultiPlan Parent was incorporated under the laws of Delaware on May 2, 2016 in connection with its acquisition of MultiPlan, Inc. in 2016. MultiPlan Parent is a wholly owned subsidiary of Holdings, and, through its wholly owned subsidiary MultiPlan, Inc. is a leading value-added provider of data analytics and technology-enabled end-to-end cost management solutions to the U.S. healthcare industry as measured by revenue and claims processed.
The mailing address of MultiPlan Parent’s principal executive office is 115 Fifth Avenue, New York, NY 10003. Its telephone number is (212) 780-2000. After the consummation of the business combination, MultiPlan Parent will cease to exist as a separate legal entity.
Emerging Growth Company
Churchill is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, it is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find Churchill’s securities less attractive as a result, there may be a less active trading market for Churchill’s securities and the prices of its securities may be more volatile.
Churchill will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the Churchill IPO, (b) in which Churchill has total annual gross revenue of at least $1.07 billion, or (c) in which Churchill is deemed to be a large accelerated filer, which means the market value of Churchill’s common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which Churchill has issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Upon consummation of the Transactions, Churchill will cease to be an “emerging growth company.”
The Business Combination Proposal
Structure of the Transactions
Pursuant to the Merger Agreement, a business combination between Churchill and MultiPlan Parent will be effected through the First Merger, whereby First Merger Sub will merge with and into MultiPlan Parent
 
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with MultiPlan Parent surviving such merger, followed by the Second Merger, whereby, immediately following the First Merger and as part of the same overall transaction as the First Merger, MultiPlan Parent will merge with and into Second Merger Sub, with Second Merger Sub surviving such merger as a wholly owned subsidiary of Churchill.
Pursuant to the Plan of Liquidation, on the day prior to the Closing Date, Holdings will distribute beneficial ownership of its shares of MultiPlan Parent stock to Holdings’ equityholders and Holdings will, as agent on behalf of Holdings’ equityholders, receive and distribute the merger consideration to Holdings’ equityholders.
Merger Consideration
Subject to the terms of the Merger Agreement, the aggregate consideration to be paid to Holdings, as agent on behalf of Holdings’ equityholders, will be equal to $5,678,000,000 and will be paid in a combination of stock and cash consideration. The cash consideration will be an amount equal to (i) Available Closing Acquiror Cash, minus (ii) the aggregate principal amount of MultiPlan Parent’s outstanding 8.500% / 9.250% Senior PIK Toggle Notes due 2022 (excluding any accrued and unpaid interest or applicable premium thereunder); provided, that in no event will the Closing Cash Consideration be greater than $1,521,000,000. If the closing occurs when less than all of the Convertible PIPE Investment has been funded to Churchill and the Closing Cash Consideration as otherwise determined in accordance with the definition thereof would be less than $1,521,000,000, then (other than in specified circumstances), the Closing Cash Consideration will be increased, notwithstanding such calculation to $1,521,000,000. The remainder of the Closing Merger Consideration will be paid in 415,700,000 shares of Churchill’s Class A common stock in an amount equal to $10.00 per share, assuming that $1,521,000,000 of Closing Cash Consideration is paid to Holdings. For more information regarding the sources and uses of the funds utilized to consummate the Transactions, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Sources and Uses for the Business Combination.”
Related Agreements
Voting and Support Agreements
In connection with the Merger Agreement, on July 12, 2020, MultiPlan Parent and Holdings entered into the Voting and Support Agreements with certain Churchill stockholders (the “Covered Stockholders”). The following summary of the Voting and Support Agreements is qualified by reference to the complete text of the form of Voting and Support Agreement, a copy of which is attached as Annex D to this proxy statement. All stockholders are encouraged to read the form of Voting and Support Agreement in its entirety for a more complete description of the terms and conditions thereof.
Pursuant to the Voting and Support Agreements, the Covered Stockholders, owning in the aggregate 28,979,500 shares of Churchill’s Class A common stock (which as of September 14, 2020, the record date for the special meeting, represented approximately $290,000,000 of funds in the trust account), agreed to vote all, or a specific portion of, such shares owned by them (the “Covered Shares”): (i) in favor of the adoption of the Merger Agreement and in favor of the approval of the business combination proposal; (ii) against any actions, proposals, transactions or agreements that would reasonably be expected to result in a breach of any representations, warranties, covenants, obligations or agreements of Churchill contained in the Merger Agreement; (iii) in favor of the other proposals set forth in this proxy statement; (iv) for any proposal to adjourn or postpone the applicable special meeting of stockholders to approve matters related to the Merger Agreement and the transactions contemplated thereby to a later date if there are not sufficient votes for approval of such matters or there is not at least $2,700,000,000 of Available Closing Acquiror Cash; and (v) against (a) any alternative proposals or transactions to the Merger Agreement and approval of the business combination and other transactions contemplated by the Merger Agreement, (b) any change in the capitalization of Churchill or any amendment to Churchill’s current certificate of incorporation (except to the extent expressly contemplated by the Merger Agreement), (c) any liquidation, dissolution or other change in Churchill’s corporate structure or business, (d) any action, proposal, transaction or agreement that would result in a material breach of any representations, warranties, covenants, obligations or agreements of the Covered Stockholders contained in the Voting and Support Agreements or (e) any action or proposal
 
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involving Churchill or any of its subsidiaries that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone or adversely affect the transactions contemplated by the Merger Agreement.
Under the Voting and Supporting Agreements, when taken together with the Sponsor’s agreement to vote in favor of the business combination proposal and the other proposals described in this proxy statement, approximately 41% of the outstanding shares of common stock of Churchill has agreed to vote in favor of the business combination proposal and the other proposals described in this proxy statement.
The Voting and Support Agreements generally prohibit the Covered Stockholders from transferring, or permitting to exist any liens on, any Covered Shares held by such Covered Stockholders prior to the termination of the Voting and Support Agreements, if such lien would prevent such Covered Stockholders from complying with their respective obligations thereunder. Certain of the Voting and Support Agreements permit the Covered Stockholder party thereto to transfer its Covered Shares following the date that the closing price of the shares of Churchill’s Class A common stock equals or exceeds $15.00 per share, as adjusted for certain events, for any fifteen (15) trading days within any consecutive twenty (20) trading day period commencing on July 30, 2020. A total of 3,550,000 Covered Shares (or 2.6% of the outstanding Churchill’s Class A common stock as of September 14, 2020, the record date for the special meeting) are subject to the permitted transfer provisions of the Voting and Support Agreements described in the prior sentence.
Each Voting and Support Agreement will terminate upon the earlier of (i) the effective time of the First Merger, (ii) the date and time of termination of the Merger Agreement in accordance with its terms and (iii) the mutual written agreement of the parties to such Voting and Support Agreement.
Non-Redemption Agreements
In connection with the Merger Agreement, on July 12, 2020, Churchill, Holdings and MultiPlan Parent entered into Non-Redemption Agreements with each of the Covered Stockholders. The following summary of the Non-Redemption Agreements is qualified by reference to the complete text of the form of Non-Redemption Agreement, a copy of which is attached as Annex E to this proxy statement. All stockholders are encouraged to read the form of Non-Redemption Agreement in its entirety for a more complete description of the terms and conditions thereof.
Pursuant to the Non-Redemption Agreements, the Covered Stockholders, owning in the aggregate 28,979,500 shares of Churchill’s Class A common stock (which represents approximately $290,000,000 of funds in the trust account), agreed not to elect to redeem or tender or submit for redemption any Covered Shares held by such Covered Stockholders in connection with the Stockholder Redemption or the Transactions. In the event a Covered Stockholder makes a Redemption Election with respect to any of its Covered Shares, such Covered Stockholder unconditionally and irrevocably agrees to subscribe for and purchase from Churchill, and Churchill agrees to issue and sell to such Covered Stockholder, the same number of such Redeemed Shares, for a per share purchase price equal to the amount to be received for each Redeemed Share in connection with such Redemption Election (such purchased shares, the “Backstop Shares” and such subscription and issuance, the “Backstop Subscription”).
If the closing of the Backstop Subscription does not occur prior to the consummation of the Transactions due solely to a material breach of the Non-Redemption Agreement by a Covered Stockholder, then Holdings or one or more of its equityholders may, within thirty (30) days after the consummation of the Transactions, cause such Covered Stockholder to purchase from Holdings (or from its assignee(s) or designee(s), including, if applicable, its equityholders), the number of Backstop Shares that such Covered Stockholder failed to purchase at the closing of the Backstop Subscription, for a per share purchase price equal to the amount received for such Covered Stockholder’s Redeemed Shares in connection with such Covered Stockholder’s Redemption Election.
The Non-Redemption Agreements generally prohibit the Covered Stockholders from transferring, or permitting to exist any liens on, any Covered Shares held by such Covered Stockholders prior to the termination of the Non-Redemption Agreements, if such lien would prevent such Covered Stockholders from complying with their respective obligations thereunder. Certain of the Non-Redemption Agreements
 
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permit the Covered Stockholder party thereto to transfer its Covered Shares following the date that the closing price of the shares of Churchill’s Class A common stock equals or exceeds $15.00 per share, as adjusted for certain events, for any fifteen (15) trading days within any consecutive twenty (20) trading day period commencing on July 30, 2020. A total of 3,550,000 Covered Shares are subject to the permitted transfer provisions of the Non-Redemption Agreements described in the prior sentence.
Investor Rights Agreement
Concurrently with the execution of the Merger Agreement, Churchill entered into the Investor Rights Agreement with Holdings, H&F, the Sponsor, the PIF and the other parties named therein, pursuant to which the parties thereto will have certain rights and obligations following the closing of the Transactions. The following summary of the material provisions of the Investor Rights Agreement is qualified by reference to the complete text of the Investor Rights Agreement, a copy of which is attached as Annex C to this proxy statement. All stockholders are encouraged to read the Investor Rights Agreement in its entirety for a more complete description of the terms and conditions of the Investor Rights Agreement.
Board of Directors
Pursuant to the Investor Rights Agreement, H&F and certain of its affiliates (together, the “H&F Holder”) has the right to nominate three directors to the Churchill Board and the Sponsor will have the right to nominate three directors to the Churchill Board. Four directors will be independent directors, two of such independent directors have been specified in the Investor Rights Agreement and two of which initially will be nominated by H&F (subject to the Sponsor’s approval), and one director will be the chief executive officer of the post-combination company. Churchill will, and the other parties to the Investor Rights Agreement agreed with Churchill to, take all necessary actions to cause the board nominees designated pursuant to the Investor Rights Agreement to be elected to the Churchill Board.
The H&F Holder’s right to nominate directors to the Churchill Board is subject to its (and its permitted transferees’) beneficial ownership of specified amounts of Churchill’s Class A common stock beneficially owned by the H&F Holder on the Closing Date. If the H&F Holder (or its permitted transferees) owns beneficially: (i) 50% or greater of such shares of Churchill’s Class A common stock beneficially owned by the H&F Holder on the Closing Date, it will have the right to nominate three directors; (ii) less than 50% but greater than or equal to 25% of such shares of Churchill’s Class A common stock beneficially owned by the H&F Holder on the Closing Date, it will have the right to nominate two directors; (iii) less than 25% but greater than or equal to 10% of such shares of Churchill’s Class A common stock beneficially owned by the H&F Holder on the Closing Date, it will have the right to nominate one director; and (iv) less than 10% of such shares of Churchill’s Class A common stock beneficially owned by the H&F Holder on the Closing Date, it will not have the right to nominate any directors pursuant to the Investor Rights Agreement.
The Sponsor’s right to nominate directors to the Churchill Board is subject to its (and its permitted transferees’) beneficial ownership of specified amounts of Churchill’s Class A common stock beneficially owned by the Sponsor on the Closing Date. If the Sponsor (or its permitted transferees) owns beneficially: (i) 75% or greater of such shares of Churchill’s Class A common stock beneficially owned by the Sponsor on the Closing Date, it will have the right to nominate three directors; (ii) less than 75% but greater than or equal to 50% of such shares of Churchill’s Class A common stock beneficially owned by the Sponsor on the Closing Date, it will have the right to nominate two directors; (iii) less than 50% but greater than or equal to 25% of such shares of Churchill’s Class A common stock beneficially owned by the Sponsor on the Closing Date, it will have the right to nominate one director; and (iv) less than 25% of such shares of Churchill’s Class A common stock, it will not have the right to nominate any directors.
Following completion of the initial terms of each of the independent directors, the independent directors will be nominated by the Nominating and Corporate Governance Committee. In addition, for so long as the PIF beneficially owns 50% or greater of the shares of Churchill’s Class A common stock beneficially owned by the PIF on the Closing Date, then the PIF has the right to appoint one non-voting board observer to the Churchill Board. The PIF’s right to appoint such non-voting observer to the Churchill Board will commence following the closing of the Transactions and upon receipt of applicable clearance from The Committee on Foreign Investment in the United States.
 
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Lock-Up
Pursuant to the Investor Rights Agreement, certain parties agreed with Churchill, subject to certain exceptions, not to sell, transfer, pledge or otherwise dispose of shares of Churchill’s Class A common stock or certain warrants to purchase shares of Churchill’s Class A common stock they receive in connection with the Transactions or otherwise beneficially own as of the Closing Date for the following time periods after the Closing Date:

in the case of the H&F Holder, 6 months (the “Initial Lock-Up Period”);

in the case of the Sponsor, 18 months (the “Lock-Up Period”);

in the case of the parties who are current or former employees of MultiPlan Parent, 12 months; and

in the case of the other parties (other than PIF), between 12 and 18 months.
Additionally, following certain underwritten offerings of Churchill’s equity securities, such parties will also agree to a customary market stand-off period not to exceed 90 days.
Registration Rights
Pursuant to the Investor Rights Agreement, Churchill will file a shelf registration statement within 45 days following the Closing Date in respect of the equity securities held by certain parties to the Investor Rights Agreement and will use reasonable best efforts to maintain or, in the event it ceases to be effective, replace such shelf registration statement until such parties have sold all eligible equity securities of Churchill beneficially owned by such parties as of the Closing Date. Pursuant to the Investor Rights Agreement, certain parties will be entitled to customary piggyback rights on registered offerings of equity securities of Churchill and certain other registration rights.

Following the Initial Lock-Up Period, the H&F Holder will be entitled to initiate unlimited shelf take-downs or, if a shelf registration statement is not then effective, demand registrations, subject to participation rights of certain other parties.

Following the one-year anniversary of the Closing Date, if there has been no registered offering pursuant to which the parties participated prior to such date, certain other parties will be entitled to initiate one (1) underwritten shelf take-down or, if a shelf registration statement is not then effective, demand registration, subject to participation rights of certain other parties.

Following the Lock-Up Period, the Sponsor will be entitled to initiate up to two (2) underwritten shelf take-downs or, if a shelf registration statement is not then effective, demand registrations, subject to participation rights of certain other parties.

Following the applicable lock-up period with respect to each party, such party will be entitled to initiate unlimited non-underwritten shelf take-downs.
Any underwritten offering of Churchill’s equity securities will be subject to customary cut-back provisions. Pursuant to the Investor Rights Agreement, Churchill will agree to cooperate and use commercially reasonable efforts to consummate the applicable registered offerings initiated by the parties and will pay the fees and expenses of such offerings (including fees of one counsel for the parties participating in such offering).
Sponsor Agreement
In connection with the execution of the Merger Agreement, Churchill and the Insiders entered into the Sponsor Agreement. The following summary of the Sponsor Agreement is qualified by reference to the complete text of the form of Sponsor Agreement, a copy of which is attached as Annex I to this proxy statement. All stockholders are encouraged to read the form of Sponsor Agreement in its entirety for a more complete description of the terms and conditions thereof.
Pursuant to the terms of the Sponsor Agreement, the Sponsor and the Insiders agreed (i) to vote any shares of Churchill’s securities held by such party in favor of the business combination proposal and the other proposals described in this proxy statement, (ii) not to redeem any shares of Churchill’s Class A
 
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common stock or Churchill’s Class B common stock, in connection with the stockholder redemption and (iii) be bound to certain other obligations as described therein.
Additionally, 12,404,080 of the Sponsor’s shares of Churchill’s Class B common stock (including shares of Churchill’s Class A common stock issued upon conversion of the Churchill’s Class B common stock) and 4,800,000 private placement warrants will unvest as of the Closing Date and will revest at such time as, during the 4-year period starting on the 1-year anniversary of the Closing Date and ending on the 5-year anniversary of the Closing Date, the closing price of Churchill’s Class A common stock exceeds $12.50 for any 40 trading days in a 60 consecutive day period. Sponsor also agreed not to transfer such 4,800,000 private placement warrants until the eighteen (18) month anniversary of the Closing Date.
Subscription Agreements
Common Subscription Agreements
In connection with the execution of the Merger Agreement, (a) Churchill entered into the PIF Common Subscription Agreement with the PIF and (b) Churchill, Holdings and MultiPlan Parent entered into the Other Common Subscription Agreements with the other Common PIPE Investors. The following summary of the Common Subscription Agreements is qualified by reference to the complete text of the form of the Other Common Subscription Agreement, a copy of which is attached as Annex F-1 to this proxy statement and the form of the PIF Common Subscription Agreement, a copy of which is attached as Annex F-2 to this proxy statement. All stockholders are encouraged to read the form of Common Subscription Agreement in its entirety for a more complete description of the terms and conditions thereof.
Pursuant to the terms of the Common Subscription Agreements (which contain commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement), Churchill has agreed to issue and sell to the Common PIPE Investors and the Common PIPE Investors have agreed to buy (x) 130,000,000 shares of Churchill’s Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $1,300,000,000 and (y) warrants to purchase 6,500,000 shares of Churchill’s Class A Common Stock (for each share of Churchill’s Class A common stock subscribed, the investor shall receive 1/20th of a warrant to purchase one share of Churchill’s Class A common stock, with each whole warrant having a strike price of $12.50 per share and a 5-year maturity from the Closing Date. The Common PIPE Investment is subject to an original issue discount of 1% for subscriptions of equal to or less than $250,000,000 and an original issue discount of 2.5% for subscriptions of more than $250,000,000, which will result in an additional 2,050,000 shares of Churchill’s Class A common stock being issued.
The closing of the Common PIPE Investment is conditioned on all conditions set forth in the Merger Agreement having been satisfied or waived and other customary closing conditions, and the Transactions will be consummated immediately following the closing of the Common PIPE Investment.
The Common Subscription Agreements will terminate upon the earlier to occur of (i) the termination of the Merger Agreement and (ii) the mutual written agreement of the parties thereto. The counterparties to certain of the Common Subscription Agreements are affiliates of directors of Churchill and such Common Subscription Agreements have been approved by Churchill’s audit committee and board of directors in accordance with Churchill’s related persons transaction policy. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”
If the closing of the Common PIPE Investment by any Common PIPE Investor (other than PIF) does not occur prior to the consummation of the Transactions due to a breach of the Common Subscription Agreement by such Common PIPE Investor, then Holdings or one or more of its equityholders may, within thirty (30) days after the consummation of the Transactions, cause such Common PIPE Investor to purchase from Holdings (or from its assignee(s) or designee(s), including, if applicable, its equityholders), the number of Subscribed Shares that such Common PIPE Investor failed to purchase at the closing of the Common PIPE Investment, for a per share purchase price equal to $10.00 per share.
Convertible Subscription Agreements
In addition, Churchill entered into the Convertible Subscription Agreements with the Convertible PIPE Investors. The following summary of the Convertible Subscription Agreements is qualified by
 
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reference to the complete text of the form of Convertible Subscription Agreement, a copy of which is attached as Annex G to this proxy statement. All stockholders are encouraged to read the form of Convertible Subscription Agreement in its entirety for a more complete description of the terms and conditions thereof.
Pursuant to the Convertible Subscription Agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement), Churchill has agreed to issue and sell to the Convertible PIPE Investors, and the Convertible PIPE Investors have agreed to buy Convertible Notes in the aggregate principal amount of $1,300,000,000. The Convertible Notes will mature in seven years. The coupon rate of the Convertible Notes is, at Churchill’s option, 6% per annum payable semi-annually in arrears in cash or 7% per annum payable semi-annually in arrears in-kind. Holders may convert the Convertible Notes into shares of Churchill’s Class A common stock based on a $13.00 conversion price, subject to customary anti-dilution adjustments. Churchill may redeem the Convertible Notes after the third anniversary of the issuance of the Convertible Notes, subject to a holder’s prior right to convert, if the trading price of Churchill’s Class A common stock exceeds 130% of the conversion price twenty (20) out of the preceding thirty (30) trading days. There will be customary registration rights with respect to the Churchill’s Class A common stock issuable upon conversion of the Convertible Notes.
Subject to the condition that the Convertible PIPE Investment is funded in full on the Closing Date, the Convertible Notes will be guaranteed by a subsidiary of MultiPlan Parent. The Convertible Notes are being issued with an original issue discount of 2.5%.
The proceeds of the PIPE Investment will be used to fund a portion of the amount necessary to consummate the Transactions, including the repayment of certain specified debt of a subsidiary of MultiPlan Parent. The counterparty to one of the Convertible Subscription Agreements is an affiliate of a director of Churchill and such Convertible Subscription Agreement has been approved by Churchill’s audit committee and board of directors in accordance with Churchill’s related persons transaction policy. Please see the sections entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” and “Proposal No. 1 — The Business Combination Proposal — Sources and Uses for the Business Combination.”
Incentive Plan
On July 30, 2020, the Churchill Board adopted, subject to stockholder approval, the Incentive Plan for the purpose of providing a means through which to attract, motivate and retain key personnel and to provide a means whereby our directors, officers, employees, consultants and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our Class A common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. Stockholders are being asked to consider and approve the Incentive Plan, which will reserve 85,850,000 shares of our common stock for issuance pursuant to grants made under the Incentive Plan. Please see the section entitled “Proposal No. 4 — The Incentive Plan Proposal — Description of the Material Features of the Incentive Plan.”
Impact of the Business Combination on the Post-Combination Company’s Public Float
It is anticipated that, upon completion of the business combination: (i) Churchill’s public stockholders (other than the Common PIPE Investors) will retain an ownership interest of approximately 16.0% in the post-combination company; (ii) the Common PIPE Investors will own approximately 19.2% of the post-combination company; (iii) the Sponsor (and its affiliates) will own approximately 4.2% of the post-combination company; and (iv) current investors in MultiPlan Parent will own approximately 60.5% of the post-combination company. These levels of ownership interest: (i) exclude the impact of the shares of Churchill’s Class A common stock underlying the warrants and the Convertible Notes, (ii) in the no redemption scenario assume that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account and (iii) are determined in the maximum redemption scenario by assuming 25,429,500 shares of Churchill’s Class A common stock will not be redeemed due to the Non-Redemption Agreements.
 
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For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information” and “Proposal No. 4 — The Incentive Plan Proposal.”
The following table illustrates varying ownership levels in the post-combination company, assuming no redemptions by Churchill’s public stockholders and the maximum redemptions by Churchill’s public stockholders as described above:
Assuming No
Redemptions
Assuming Maximum
Redemptions
Churchill existing public stockholders
16.0% 4.2%
Common PIPE Investors
19.2% 21.9%
Sponsor (and its affiliates)
4.2% 4.8%
MultiPlan Parent’s current indirect Investors
60.5% 69.0%
Matters Being Voted On
The stockholders of Churchill will be asked to consider and vote on the following proposals at the special meeting:
1.
a proposal to approve the business combination described in this proxy statement, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal”;
2.
a proposal to approve and adopt the second amended and restated certificate of incorporation of Churchill in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2 — The Charter Proposal”;
3.
a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in the second amended and restated certificate of incorporation, presented separately in accordance with the requirements of the SEC. Please see the section entitled “Proposal No. 3 — The Governance Proposal”;
4.
a proposal to approve and adopt the Incentive Plan and the material terms thereunder, including the authorization of the initial share reserve thereunder. Please see the section entitled “Proposal No. 4 — The Incentive Plan Proposal”;
5.
a proposal to elect nine directors to serve staggered terms on the Churchill Board until immediately following the 2021, 2022 and 2023 annual meetings of Churchill stockholders, as applicable, and until their respective successors are duly elected and qualified. Please see the section entitled “Proposal No. 5 — The Director Election Proposal”;
6.
a proposal to approve, for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, (a) the issuance of more than 20% of Churchill’s issued and outstanding shares of common stock in connection with the Transactions, including, without limitation, the PIPE Investment and the issuance of more than 20% of Churchill’s issued and outstanding shares to a single holder (which may constitute a change of control under the NYSE’s Listed Company Manual) and (b) the issuance of shares of Churchill Class A common stock to a Related Party (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Transactions. Please see the section entitled “Proposal No. 6 — The NYSE Proposal”; and
7.
a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7 — The Adjournment Proposal.
 
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Date, Time and Place of Special Meeting of Churchill’s Stockholders
The special meeting of stockholders of Churchill will be held via live webcast at 10:00 a.m. Eastern Time, on October 7, 2020. The special meeting can be accessed by visiting https://www.cstproxy.com/churchillcapitaliii/2020, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication,
At the special meeting, stockholders will be asked to consider and vote upon the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal, the NYSE proposal and if necessary, the adjournment proposal to permit further solicitation and vote of proxies if Churchill is not able to consummate the Transactions.
Voting Power; Record Date
Stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of Churchill common stock at the close of business on September 14, 2020, which is the record date for the special meeting. Stockholders will have one vote for each share of Churchill common stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Churchill warrants do not have voting rights. On the record date, there were 137,500,000 shares of Churchill common stock outstanding, of which 110,000,000 were public shares with the rest being held by the Sponsor.
Quorum and Vote of Churchill Stockholders
A quorum of Churchill stockholders is necessary to hold a valid meeting. A quorum will be present at the Churchill special meeting if a majority of the outstanding shares entitled to vote at the meeting are represented in person or by proxy. Proxies that are marked “abstain” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting.
The Sponsor owns of record and is entitled to vote 20% of the outstanding shares of Churchill common stock as of the record date. Such shares, as well as any shares of common stock acquired in the aftermarket by the Sponsor, will be voted in favor of the proposals presented at the special meeting. Additionally, certain stockholders entered into Voting and Support Agreements, which, when taken together with the Sponsor’s agreement to vote in favor of the proposals described in this proxy statement, results in approximately 41% of the outstanding common stock of Churchill having agreed to vote in favor of the proposals described in this proxy statement. In addition, the 9,094,876 shares of Churchill Class A common stock (representing approximately 6.6% of the outstanding shares of Churchill’s common stock as of the record date for the special meeting) owned by a subsidiary of MultiPlan Parent will be voted in the same proportion as the shares of Churchill’s common stock actually voted by holders thereof other than MultiPlan Parent and its subsidiaries in respect of each of the proposals to be voted on at the special meeting.
The proposals presented at the special meeting will require the following votes:

the approval of each of the business combination proposal, the governance proposal (which is a non-binding advisory vote), the incentive plan proposal, the NYSE proposal and the adjournment proposal require the affirmative vote of a majority of the votes cast by holders of Churchill’s outstanding shares of common stock represented at the special meeting by attendance via the virtual meeting website or by proxy and entitled to vote thereon at the special meeting. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the business combination proposal, the governance proposal, the incentive plan proposal, the NYSE proposal and the adjournment proposal will have no effect on such proposals;

the approval of the charter proposal requires the affirmative vote of holders of a majority of Churchill’s outstanding shares of common stock entitled to vote thereon at the special meeting. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to
 
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vote at the special meeting with regard to the charter proposal will have the same effect as a vote “against” such proposal; and

directors are elected by a plurality of all of the votes cast by holders of shares of Churchill’s common stock represented at the special meeting by attendance via the virtual meeting website or by proxy and entitled to vote thereon at the special meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Churchill stockholders may not cumulate their votes with respect to the election of directors. Accordingly, if a valid quorum is established, a Churchill stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the director election proposal will have no effect on such proposal.
Abstentions will have the same effect as a vote “against” the charter proposal, but will have no effect on the other proposals. Please note that holders of the public shares cannot seek redemption of their shares for cash unless they affirmatively vote “for” or “against” the business combination proposal.
Consummation of the Transactions is conditioned on the approval of each of the business combination proposal, the charter proposal, the incentive plan proposal, and the NYSE proposal. If any of those proposals are not approved, we will not consummate the Transactions.
Redemption Rights
Pursuant to Churchill’s current certificate of incorporation, a holder of public shares may demand that Churchill redeem such shares for cash if the business combination is consummated. Holders of public shares will be entitled to receive cash for these shares only if they (i) demand that Churchill redeem their shares for cash no later than the second business day prior to the vote on the business combination proposal by delivering their stock to Churchill’s transfer agent prior to the vote at the meeting and (ii) affirmatively vote “for” or “against” the business combination proposal. If the business combination is not completed, these shares will not be redeemed. If a holder of public shares properly demands redemption and votes “for” or “against” the business combination proposal, Churchill will redeem each public share for a full pro rata portion of the trust account, calculated as of two business days prior to the consummation of the business combination. As of September 14, 2020, the record date for the special meeting, this would amount to approximately $10.04 per share. If a holder of public shares exercises its redemption rights, then it will be exchanging its shares of Churchill common stock for cash and will no longer own the shares. Please see the section entitled “Special Meeting of Churchill Stockholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your shares for cash.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares.
Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or was a “group,” will not be redeemed for cash.
The business combination will not be consummated if Churchill has net tangible assets of less than $5,000,001 after taking into account holders of public shares that have properly demanded redemption of their shares for cash.
Holders of Churchill warrants will not have redemption rights with respect to such securities.
Appraisal Rights
Churchill stockholders, Churchill unitholders and Churchill warrant holders do not have appraisal rights in connection with the Transactions under the DGCL.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. Churchill has engaged Mackenzie Partners, Inc. (“Mackenzie”) to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its
 
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shares during the meeting if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of Churchill Stockholders — Revoking Your Proxy.”
Interests of Certain Persons in the Business Combination
In considering the recommendation of the Churchill Board to vote in favor of approval of the business combination proposal and the other proposals, stockholders should keep in mind that the Sponsor and the Insiders have interests in such proposals that are different from, or in addition to, those of Churchill stockholders generally. In particular:

If the Transactions or another business combination are not consummated by February 19, 2022 (or May 19, 2022 if Churchill has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by February 19, 2022), Churchill will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and the Churchill Board, dissolving and liquidating. In such event, the 27,500,000 initial shares held by the Sponsor would be worthless because the holders thereof are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an aggregate market value of approximately $305,000,000 based upon the closing price of $11.09 per share on the NYSE on September 14, 2020, the record date for the special meeting. Such founder shares are subject to certain time- and performance-based vesting provisions as described under “Proposal No. 1 — The Business Combination Proposal — Sponsor Agreement.

The Sponsor purchased an aggregate of 23,000,000 private placement warrants from Churchill for an aggregate purchase price of $23,000,000 (or $1.00 per warrant). These purchases took place on a private placement basis simultaneously with the consummation of the Churchill IPO. A portion of the proceeds Churchill received from these purchases were placed in the trust account. Such warrants had an aggregate market value of approximately $50,600,000 based upon the closing price of  $2.20 per warrant on the NYSE on September 14, 2020, the record date for the special meeting. The private placement warrants will become worthless if Churchill does not consummate a business combination by February 19, 2022 (or May 19, 2022 if Churchill has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by February 19, 2022). Such private placement warrants are subject to certain time- and performance-based vesting provisions as described under “Proposal No. 1 — The Business Combination Proposal  —  Sponsor Agreement.”

Churchill has engaged KG to act as Churchill’s financial advisor in connection with the Transactions and as a placement agent in connection with the PIPE Investment. Pursuant to this engagement, Churchill will pay KG a transaction fee of $15,000,000 and a placement fee of $15,500,000 (of which up to $15,000,000 shall be payable in shares of Churchill’s Class A common stock based on $10.00 per share, the “placement fee”), which shall be conditioned upon the completion of the Mergers and such engagement shall be terminated in full at such time. Therefore, KG and Michael Klein have financial interests in the completion of the Mergers in addition to the financial interest of the Sponsor. The engagement of KG and the payment of the fees described above have been approved by Churchill’s audit committee and the Churchill Board in accordance with Churchill’s related persons transaction policy. KG intends to direct Churchill to pay a portion of such fees totaling $8 million to Project Isaiah, a philanthropic entity formed to provide meals in underserved communities in the United States impacted by the COVID-19 crisis of 2020. Michael Klein is the Chairman of Project Isaiah.

Michael Klein and Glenn R. August will become directors of the post-combination company after the closing of the Transactions. As such, in the future each will receive any cash fees, stock options or stock awards that the post-combination board of directors determines to pay to its executive and non-executive directors.

If Churchill is unable to complete a business combination within the completion window, its executive officers will be personally liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other
 
30

 
entities that are owed money by Churchill for services rendered or contracted for or products sold to Churchill. If Churchill consummates a business combination, on the other hand, Churchill will be liable for all such claims.

Churchill’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Churchill’s behalf, such as identifying and investigating possible business targets and business combinations. However, if Churchill fails to consummate a business combination within the completion window, they will not have any claim against the trust account for reimbursement. Accordingly, Churchill may not be able to reimburse these expenses if the Transactions or another business combination, are not completed within the completion window.

The continued indemnification of current directors and officers and the continuation of directors’ and officers’ liability insurance.

Churchill has entered into (i) Common Subscription Agreements with each of Garden State Capital Partners LLC (“Garden State”), Thyssen Bornamisza Group (“TBG”) and Oak Hill Advisors LP (“Oak Hill”) pursuant to which each such investor has committed to purchase up to 8,500,000, 4,500,000 and 2,500,000 shares of Churchill’s Class A common stock, respectively, in the Common PIPE Investment for an aggregate commitment of approximately $85,000,000, $45,000,000 and $25,000,000, respectively; and (ii) a Convertible Subscription Agreement with Oak Hill for an aggregate commitment of $500,000,000. Michael Klein manages and has an ownership interest in Garden State. Jeremy Abson is the president of TBG. Glenn R. August is the Founder, Senior Partner and Chief Executive Officer of Oak Hill.

In connection with the Merger Agreement, Churchill issued an unsecured promissory note (the “Note”) in the principal amount of $1,500,000 to the Sponsor. The Note bears no interest and is repayable in full upon the closing of Mergers. The Sponsor has the option to convert any unpaid balance of the Note into warrants to purchase one share of Churchill’s Class A common stock (the “Working Capital Warrants”) equal to the principal amount of the Note so converted divided by $1.00. The terms of any such Working Capital Warrants are identical to the terms of Churchill’s existing private placement warrants held by the Sponsor. The proceeds of the Note will be used to fund expenses related to Churchill’s normal operating expenses and other transactional related expenses.
Board of Directors following the Business Combination
Upon consummation of the Transactions, the Churchill Board anticipates each Class I director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2021, each Class II director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2022 and each Class III director having a term that expires immediately following Churchill’s annual meeting of stockholders in 2023, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.
Allen Thorpe, Hunter Philbrick, Paul Emery, Michael Klein, Glenn R. August, Bill Veghte, Richard Clarke, Anthony Colaluca and Mark Tabak have each been nominated to serve as directors of the post-combination company upon completion of the Transactions.
Please see the sections entitled “Proposal No. 5 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
Recommendation to Stockholders
The Churchill Board believes that the business combination proposal and the other proposals to be presented at the special meeting are fair to and in the best interest of Churchill’s stockholders and unanimously recommends that its stockholders vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the director election proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented.
When you consider the Churchill Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in
 
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addition to, the interests of Churchill stockholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for additional information. The Churchill Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the Churchill stockholders that they vote “FOR” the proposals presented at the special meeting.
Conditions to the Closing of the Business Combination
General Conditions
Consummation of the Transactions is conditioned on the approval of the business combination proposal, the charter proposal, the incentive plan proposal and the NYSE proposal, as described in this proxy statement.
In addition, the consummation of the Transactions contemplated by the Merger Agreement is conditioned upon, among other things:

the early termination or expiration of the waiting period under the HSR Act (which occurred on August 4, 2020);

no order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, and no statute, rule or regulation being in effect that enjoins or prohibits the consummation of the Transactions;

Churchill having at least $5,000,001 of net tangible assets remaining after redemptions by Churchill stockholders; and

the delivery by each of MultiPlan Parent and Churchill to the other of a certificate with respect to the truth and accuracy of such party’s representations and warranties as of the Closing, as well as the performance by such party of the covenants and agreements contained in the Merger Agreement required to be complied with by such party prior to the Closing.
Churchill’s Conditions to Closing
The obligations of Churchill, First Merger Sub and Second Merger Sub to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of MultiPlan Parent (subject to customary bring-down standards); and

the covenants of MultiPlan Parent having been performed in all material respects.
MultiPlan Parent’s Conditions to Closing
The obligations of MultiPlan Parent to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

the accuracy of the representations and warranties of Churchill, First Merger Sub and Second Merger Sub (subject to customary bring-down standards);

the covenants of Churchill, First Merger Sub and Second Merger Sub having been performed in all material respects;

there being at least $2,700,000,000 of Available Closing Acquiror Cash; and

the covenants of the Sponsor and the Insiders under the Sponsor Agreement having been performed in all material respects, and the Sponsor shall not have threatened (orally or in writing) (i) that the Sponsor Agreement is not valid, binding and in full force and effect, (ii) that MultiPlan Parent is in breach of or default under the Sponsor Agreement or (iii) to terminate the Sponsor Agreement.
 
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Tax Consequences of the Business Combination
For a description of certain U.S. federal income tax consequences of the Transactions and the exercise of redemption rights, please see the information set forth in “Proposal No. 1 — The Business Combination Proposal — Material U.S. Federal Income Tax Consequences of the Business Combination to Churchill Security Holders.”
Anticipated Accounting Treatment
The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on existing MultiPlan Parent stockholders being the majority stockholder and holding majority voting power in the combined company, MultiPlan Parent’s senior management comprising the majority of the senior management of the combined company, and the ongoing operations of MultiPlan comprising the ongoing operations of the combined company. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of MultiPlan issuing shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Transactions will be those of MultiPlan.
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Transactions are subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. If the FTC or the Antitrust Division issues a Second Request within the initial 30-day waiting period, the waiting period with respect to the Transactions will be extended for an additional period of 30 calendar days, which will begin on the date on which the filing parties each certify compliance with the Second Request. Complying with a Second Request can take a significant period of time. On July 23, 2020, Churchill and Holdings filed the required forms under the HSR Act with the Antitrust Division and the FTC and requested early termination. Early termination was granted on August 4, 2020.
At any time before or after consummation of the Transactions, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Transactions. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Transactions on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.
Neither Churchill nor Holdings is aware of any material regulatory approvals or actions that are required for completion of the Transactions other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Litigation Matters
As of September 17, 2020, five actions (collectively, the “Stockholder Actions”), including two putative class actions, have been filed in federal courts in New York and Delaware by purported Churchill stockholders in connection with the business combination: Hutchings v. Churchill Capital Corp III, et al., No. 1:20-cv-06318 (S.D.N.Y.) (the “Hutchings Complaint”); Kent v. Churchill Capital Corp III, et al., No. 1:20-cv-01068 (D. Del.); Feges v. Churchill Capital Corp III, et al., No. 1:20-cv-06627 (S.D.N.Y.); Noor v. Churchill Capital Corp III, et al., No. 1:20-cv-06686 (S.D.N.Y.); and Greenman v. Churchill Capital Corp III, et al., No. 1:20-cv-07466 (S.D.N.Y.) (the “Greenman Complaint”). On September 11, 2020, the plaintiff in the
 
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Noor action voluntarily dismissed his complaint without prejudice. Each of the complaints in the Stockholder Actions names Churchill and the members of the Churchill Board as defendants. The Stockholder Actions generally allege, among other things, that this proxy statement is false and misleading and/or omits material information concerning the transactions contemplated by the Merger Agreement in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14d-9 promulgated thereunder. The Hutchings Complaint and the Greenman Complaint also allege breach of fiduciary duty claims against the Churchill Board in connection with the Transactions. The Stockholder Actions generally seek, among other things, injunctive relief and an award of attorneys’ fees and expenses.
Risk Factors
In evaluating the proposals to be presented at the special meeting, you should carefully read this proxy statement and especially consider the factors discussed in the section entitled “Risk Factors.”
 
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CHURCHILL’S SUMMARY HISTORICAL FINANCIAL INFORMATION
Churchill is providing the following summary historical financial information to assist you in your analysis of the financial aspects of the Transactions.
Churchill’s balance sheet data as of December 31, 2019 and statement of operations data for the period from October 30, 2019 (inception) through December 31, 2019 are derived from Churchill’s audited financial statements, included elsewhere in this proxy statement. Such data as of and for the six month period ended June 30, 2020 are derived from Churchill’s unaudited financial statements, included elsewhere in this proxy statement.
The information is only a summary and should be read in conjunction with Churchill’s financial statements and related notes and “Other Information Related to Churchill” and “Churchill’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The historical results included below and elsewhere in this proxy statement are not indicative of the future performance of Churchill.
Six Months
Ended June 30,
2020
Period from October 30,
2019 (inception)
through December 31,
2019
(unaudited)
Statement of Operations Data:
Revenues
$ $
Loss from operations
$ (2,061,847) $ (1,450)
Interest earned on marketable securities held in Trust Account
$ 4,215,679 $
Net income (loss)
$ 1,696,498 $ (1,450)
Weighted average shares outstanding, basic and diluted(1)
30,397,160 25,000,000
Basic and diluted net loss per common share(2)
$ (0.03) $ (0.00)
As of June 30, 2020
As of December 31, 2019
Balance Sheet Data:
Total assets
$ 1,107,564,339 $ 318,930
(1)
Excludes an aggregate of 105,858,072 shares subject to possible redemption at June 30, 2020. The weighted average shares as of December 31, 2019 excludes an aggregate of 2,500,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment for the Churchill IPO was not exercised in full.
(2)
Excludes interest income of $0 and $2,558,125 attributable to shares subject to possible redemption as of December 31, 2019 and June 30, 2020.
 
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MULTIPLAN PARENT’S SUMMARY HISTORICAL FINANCIAL INFORMATION
The following tables present summary historical consolidated financial data of MultiPlan Parent and MPH Holdings (the predecessor of MultiPlan Parent) for the periods presented. The consolidated statement of income and comprehensive income data for the years ended December 31, 2017, 2018 and 2019 and the other financial data as of December 31, 2018 and 2019 have been derived from MultiPlan Parent’s audited consolidated financial statements included elsewhere in this proxy statement. The consolidated statements of loss and comprehensive loss data for the six months ended June 30, 2019 and 2020 and the other financial data as of June 30, 2020 have been derived from MultiPlan Parent’s unaudited condensed consolidated financial statements included elsewhere in this proxy statement. The unaudited condensed consolidated financial statements of MultiPlan Parent have been prepared on the same basis as the audited consolidated financial statements of MultiPlan Parent. In the opinion of MultiPlan Parent’s management, the unaudited condensed consolidated interim financial data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial information in those statements. The summary historical consolidated financial data for the year ended December 31, 2015, the period from January 1, 2016 through June 6, 2016, the period from May 2, 2016 through December 31, 2016 and the three months ended March 31, 2019 and 2020, and the other financial data as of December 31, 2016 and June 30, 2019 has been derived from MultiPlan Parent’s (or its predecessor’s) unaudited financial statements not included in this proxy statement.
On June 7, 2016, affiliates of Hellman & Friedman LLC, certain other investors and certain members of management acquired, indirectly, all of the capital stock of MultiPlan Parent. The following discussion includes references to the “successor” and “predecessor” of, and the related accounting periods resulting from, the consummation of such acquisition on June 7, 2016. In accordance with GAAP, the accounting period for the successor began on May 2, 2016, the date the successor began accruing expenses related to such acquisition.
You should read the summary financial data presented below in conjunction with “MultiPlan Parent’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and MultiPlan Parent’s consolidated financial statements and the related notes included elsewhere in this proxy statement. Historical operating results are not necessarily indicative of future operating results.
Six
Months
Ended
June 30,
2020
Six
Months
Ended
June 30,
2019
Three
Months
Ended
March 31,
2020
Three
Months
Ended
March 31,
2019
Year
Ended
December 31,
2019
Year
Ended
December 31,
2018
Year
Ended
December 31,
2017
May 2 –
December 31,
2016
January 1 –
June 6,
2016
Year Ended
December 31,
2015
($ in thousands)
Successor
Successor
Successor
Successor
Successor
Successor
Successor
Successor
Predecessor
Predecessor
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Consolidated Statements of Income and Comprehensive Income Data:
Revenues(1) $ 458,902 $ 490,677 $ 252,022 $ 245,024 $ 982,901 $ 1,040,883 $ 1,067,266 $ 575,889 $ 412,597 $ 865,094
Operating income (loss)
$ 107,888 $ 184,421 $ 87,617 $ 85,100 $ 368,209 $ 427,541 $ 363,636 $ 89,415 $ (50,607) $ 245,570
Net (loss) income
$ (58,840) $ (7,496) $ (2,594) $ (8,364) $ 9,710 $ 36,223 $ 648,132 $ (56,503) $ (247,598) $ 7,749
Basic and diluted net (loss) income per share:
$ (5,884) $ (750) $ (259) $ (836) $ 971 $ 3,622 $ 64,813 $ (5,650) $ (24,760) $ 775
Other Financial Data:
Medical charges processed(2)
$ 49,900,000 $ 52,800,000 $ 26,700,000 $ 26,500,000 $ 106,300,000 $ 101,600,000 $ 97,400,000 $ 88,600,000
Medical cost savings(3)
18.8% 17.2% 18.7% 17.0% 17.8% 18.3% 18.3% 17.2%
Capital expenditures(4)
$ 34,866 $ 33,696 $ 17,336 $ 16,828 $ 66,414 $ 63,556 $ 60,709 $ 31,055 $ 22,602 $ 49,714
Total assets(5)
$ 8,333,189 $ 8,360,411 $ 8,542,617 $ 8,630,880 $ 8,360,411 $ 8,642,973 $ 8,987,709 $ 9,285,126 $ 5,297,921
EBITDA(6) $ 305,476 $ 379,948 $ 186,075 $ 182,589 $ 778,463 $ 815,503 $ 731,953 $ 309,651 $ (77,656) $ 473,581
Adjusted EBITDA(6)
$ 345,743 $ 376,163 $ 195,944 $ 188,098 $ 750,350 $ 824,886 $ 812,086 $ 416,884 $ 298,653 $ 611,845
(1)
On January 1, 2018, MultiPlan Parent adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. See Note 2 to MultiPlan Parent’s consolidated financial statements included elsewhere in this proxy statement for additional information.
(2)
Medical charges processed represents the aggregate dollar amount of claims processed by MultiPlan’s cost management solutions in the period presented. The dollar amount of the claim for purposes of this calculation is the dollar amount of the claim prior to any reductions that may be made as a result of the claim being processed by MultiPlan’s cost management solutions.
 
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(3)
Medical cost savings represents the aggregate amount of potential savings in dollars identified by MultiPlan’s cost management solutions in the period presented expressed as a percentage of the aggregate amount of medical charges processed in the period presented. Since certain of our fees are based on the amount of savings achieved by our customers and our customers are the final adjudicator of the claims and may choose not to reduce claims or reduce claims by only a portion of the potential savings identified, medical cost savings may not directly correlate with the amount of fees earned in connection with the processing of such claims.
(4)
Capital expenditures includes purchases of property and equipment and capitalized software development costs.
(5)
On January 1, 2019, MultiPlan Parent adopted ASC Topic 842, Leases. See Note 2 to MultiPlan Parent’s consolidated financial statements included elsewhere in this proxy statement for additional information.
(6)
EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by or presented in accordance with GAAP. These measures are not measurements of our financial performance or liquidity under GAAP, have limitations as analytical tools and should not be considered in isolation or as an alternative to net income (loss), cash flows or any other measures of performance or liquidity prepared in accordance with GAAP.
MultiPlan Parent presents EBITDA and Adjusted EBITDA because certain covenants in the indenture relating to the 7.125% Senior Notes are tied to ratios and baskets based on these measures. EBITDA represents net income before interest expense, interest income, income tax provision (benefit) and depreciation and amortization of intangible assets. Adjusted EBITDA is EBITDA as further adjusted by certain items as described in the table below. In addition, in evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of EBITDA and Adjusted EBITDA. The presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The calculations of EBITDA and Adjusted EBITDA may not be comparable to similarly entitled measures reported by other companies. Based on our industry and debt financing experience, MultiPlan Parent believes that EBITDA and Adjusted EBITDA are customarily used by investors, analysts and other interested parties to provide useful information regarding a company’s ability to service and/or incur indebtedness.
MultiPlan Parent also believes that Adjusted EBITDA is useful to investors and analysts in assessing our operating performance during the periods these charges were incurred on a consistent basis with the periods during which these charges were not incurred. Both EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and

although depreciation and amortization are non-cash charges, the tangible assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.
The following table reconciles net income to EBITDA and Adjusted EBITDA:
 
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Six Months
Ended
June 30,
2020
Six Months
Ended
June 30,
2019
Three Months
Ended
March 31,
2020
Three Months
Ended
March 31,
2019
Year
Ended
December 31,
2019
Year
Ended
December 31,
2018
Year
Ended
December 31,
2017
May 2 —
December 31,
2016
January 1 —
June 6,
2016
Year
Ended
December 31,
2015
($ in thousands)
Successor
Successor
Successor
Successor
Successor
Successor
Successor
Successor
Predecessor
Predecessor
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net (loss) income
$ (58,840) $ (7,496) $ (2,594) $ (8,364) $ 9,710 $ 36,223 $ 648,132 $ (56,503) $ (247,598) $ 7,749
Adjustments:
Interest expense(a)
177,015 193,192 $ 90,965 $ 97,719 $ 376,346 $ 383,261 $ 281,972 $ 155,140 $ 81,385 $ 152,127
Interest income
(148) (79) $ (71) $ (33) $ (196) $ (51) $ (9) $ (19) $ (12)
Income tax (benefit) provision
(10,139) (1,196) $ (683) $ (4,222) $ 799 $ 8,108 $ (586,512) $ (9,203) $ (11,701) $ 85,706
Depreciation
29,641 27,570 $ 14,506 $ 13,544 $ 55,807 $ 52,268 $ 53,002 $ 30,244 $ 19,818 $ 41,650
Amortization of intangible assets
167,027 167,027 $ 83,513 $ 83,513 $ 334,053 $ 334,053 $ 334,053 $ 189,297 $ 80,152 $ 184,967
Non-income taxes(b)
920 930 $ 439 $ 432 $ 1,944 $ 1,641 $ 1,315 $ 695 $ 288 $ 1,394
EBITDA
$ 305,476 $ 379,948 $ 186,075 $ 182,589 $ 778,463 $ 815,503 $ 731,953 $ 309,651 $ (77,656) $ 473,581
Adjustments:
Other expense (income)(c)
297 823 $ 148 $ 463 $ 1,947 $ 4,617 $ 5,857 $ 3,727 $ 3,144 $ 6,252
Transaction related expenses(d)
2,698 22 $ 360 $ 10 $ 3,270 $ 49 $ 3,435 $ 74,503 $ 14,907 $ 3
Loss on extinguishments and modification of debt(e)
$ 20,053 $ 127,307
Gain on repurchase and cancellation of notes(f)
$ (18,450)
Stock-based compensation(g)
37,272 (4,630) $ 9,361 $ 5,036 $ (14,880) $ 4,717 $ 50,788 $ 29,003 $ 230,951 $ 132,009
Adjusted EBITDA
$ 345,743 $ 376,163 $ 195,944 $ 188,098 $ 750,350 $ 824,886 $ 812,086 $ 416,884 $ 298,653 $ 611,845
(a)
In the years ended December 31, 2017, 2018 and 2019, MultiPlan Parent did not recognize expense for the portions of debt issuance costs related to the amounts of the principal loan prepayments of MPH Holdings’ term loan facility in each year, which resulted in an understatement of long-term debt of $2.3 million as of December 31, 2019. MultiPlan Parent corrected this error as an out-of-period adjustment resulting in an overstatement of interest expense of $2.3 million in the three months ended March 31, 2020 and $2.3 million in the six months ended June 30, 2020.
(b)
Non-income taxes includes personal property taxes, real estate taxes, sales and use taxes and franchise taxes which are included in cost of services and general and administrative expenses in MultiPlan Parent’s consolidated statements of income and comprehensive income.
(c)
Represents miscellaneous non-operating expenses, gain or loss on disposal of assets, management fees, and costs associated with the integration of acquired companies into MultiPlan.
(d)
Represents ordinary course transaction costs, including transaction costs related to the acquisition of MultiPlan by affiliates of Hellman & Friedman LLC, certain other investors and certain members of management on June 7, 2016, the issuance of the 8.500% / 9.250% Senior PIK Toggle Notes due 2022 (the “Senior PIK Notes”) on November 21, 2017 by Polaris Intermediate Corp. and the refinancing of MultiPlan Parent’s term loan effective June 12, 2017, and to the transactions contemplated by the Merger Agreement.
(e)
Includes expenses related to the refinancing of Polaris’ term loan effective June 12, 2017 and expenses and early termination fees associated with MPH Holdings’ 6.625% Senior Notes due 2022 on June 7, 2016. See Note 9 to MultiPlan Parent’s audited consolidated financial statements included elsewhere in this proxy statement for additional information.
(f)
Represents the gain related to the repurchase and cancellation of $121.3 million in aggregate principal amount of Senior PIK Notes.
(g)
Includes the cost of an employee stock-based compensation plan. MultiPlan Parent changed its assumptions in computing the fair market value of the Holdings Class B Units (the “Units”) to incorporate a 24% discount for lack of marketability of the Units for the three months ended March 31, 2020, 11% discount for lack of marketability of the Units for the six months ended June 30, 2020 and 20% discount for lack of marketability of the Units for the years ended December 31, 2019 and December 31, 2018, respectively. See Note 14 to MultiPlan Parent’s audited consolidated financial statements included elsewhere in this proxy statement for additional information.
 
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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following summary unaudited pro forma condensed combined financial data (the “summary pro forma data”) gives effect to the business combination and the other transactions contemplated by the Transactions and described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” Operations prior to the Transactions will be those of MultiPlan Parent. The Transactions will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America. Under this method of accounting, Churchill will be treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Transactions will be treated as the equivalent of MultiPlan Parent issuing shares of common stock for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill will be recognized at fair value (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded.
The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2020 combines the unaudited condensed balance sheet of Churchill as of June 30, 2020 with the unaudited condensed consolidated balance sheet of MultiPlan Parent as of June 30, 2020, giving effect to the Transactions as if they had been consummated on that date, including the following: (a) the Common PIPE Investment and the Convertible PIPE Investment were funded in full and the securities described above were issued, (b) the Senior PIK Notes were redeemed in full, (c) 1,500,000 shares of Churchill’s Class A common stock were issued to KG in partial payment of the placement fee as described above, (d) the entire Note was converted into Working Capital Warrants, (e) all of Churchill’s 27,500,000 outstanding shares of Class B common stock were converted to shares of Churchill’s Class A common stock on a one-for-one basis and (f) 415,700,000 shares of Churchill’s Class A common stock were issued as Closing Share Consideration and $1,521,000,000 of Closing Cash Consideration was paid to Holdings on behalf of the Polaris Holders.
The summary unaudited pro forma condensed combined statement of loss data for the six months ended June 30, 2020 combines the unaudited condensed statements of operations of Churchill for the six months ended June 30, 2020 with the unaudited condensed consolidated statements of loss and comprehensive loss of MultiPlan Parent for the six months ended June 30, 2020. The summary unaudited pro forma condensed combined statements of loss data for the year ended December 31, 2019 combines the audited statements of operations for the period from October 30, 2019 (inception) through December 31, 2019 of Churchill with the audited consolidated statements of income and comprehensive income of MultiPlan Parent for the year ended December 31, 2019. The summary unaudited pro forma condensed combined statements of loss data for the six months ended June 30, 2020 and the year ended December 31, 2019 give effect to the Transactions as if they had occurred as of January 1, 2019, including the following: (a) the Common PIPE Investment and the Convertible PIPE Investment were funded in full and the securities described above were issued, (b) the Senior PIK Notes were redeemed in full, (c) 1,500,000 shares of Churchill’s Class A common stock were issued to KG in partial payment of the placement fee as described above, (d) the entire Note was converted into Working Capital Warrants, (e) all of Churchill’s 27,500,000 outstanding shares of Class B common stock were converted to shares of Churchill’s Class A common stock on a one-for-one basis and (f) 415,700,000 shares of Churchill’s Class A common stock were issued as Closing Share Consideration and $1,521,000,000 of Closing Cash Consideration was paid to Holdings on behalf of the Polaris Holders.
The summary unaudited pro forma condensed combined data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information and the accompanying notes in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The summary pro forma data is based upon, and should be read in conjunction with, the audited consolidated financial statements and related notes of Churchill and MultiPlan Parent for the applicable periods included elsewhere in this proxy statement. The summary pro forma data is for illustrative purposes only and is based on information currently available and management’s assumptions and estimates. The pro forma combined financial information does not necessarily reflect what the combined company’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated. The summary unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company.
 
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The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The summary unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of cash redemptions of Churchill’s common stock:

Assuming No Redemptions:   This presentation assumes that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account.

Assuming Maximum Redemptions:   This presentation assumes that Churchill public stockholders holding 84.6 million of Churchill’s public shares (i.e., all of Churchill’s public shares other than those Covered Shares that are not subject to permitted transfer provisions in the Non-Redemption Agreements as described above) exercise their redemption rights and that such shares are redeemed for their pro rata share (assuming $10.00 per share) of the funds in Churchill’s trust account for aggregate redemption proceeds of  $845.7 million. Under the Merger Agreement, the consummation of the Transactions is conditioned upon, among other things, the amount of Available Closing Acquiror Cash not being less than $2,700.0 million. This scenario gives effect to the maximum number of redemptions that meet all of the conditions to permit consummation of the Transactions.
Assuming No Redemptions
Assuming Maximum Redemption
(dollars in thousands, other than share and per share data)
Six Months
Ended
June 3 0, 2020
Twelve Months
Ended
December 31, 2019
Six Months
Ended
June 30, 2020
Twelve Months
Ended
December 31, 2019
Summary Unaudited Pro Forma Condensed Combined Statements of Loss Data
Pro Forma net loss attributable to shareholders
$ (62,619) $ (7,864) $ (62,619) $ (7,864)
Weighted average shares outstanding, basic and diluted
686,750,000 686,750,000 602,179,500 602,179,500
Basic and diluted net loss per share
$ (0.09) $ (0.01) $ (0.10) $ (0.01)
Summary Unaudited Pro Forma Condensed Combined Balance Sheets Data
Total current assets
$ 1,069,290 $ 223,290
Total assets
$ 9,149,858 $ 8,303,858
Total current liabilities
$ 74,502 $ 74,502
Total liabilities
$ 6,275,956 $ 6,275,956
Shareholders’ equity
$ 2,873,902 $ 2,027,902
 
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COMPARATIVE PER SHARE DATA
The following table sets forth selected historical comparative share information for Churchill and MultiPlan Parent, respectively, and unaudited pro forma condensed combined per share information of Churchill after giving effect to the Transactions, assuming two redemption scenarios as follows:

Assuming No Redemptions:   This presentation assumes that no Churchill public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in Churchill’s trust account.

Assuming Maximum Redemptions:   This presentation assumes that Churchill public stockholders holding 84.6 million of Churchill’s public shares (i.e., all of Churchill’s public shares other than those Covered Shares that are not subject to permitted transfer provisions in the Non-Redemption Agreements) exercise their redemption rights and that such shares are redeemed for their pro rata share (assuming $10.00 per share) of the funds in Churchill’s trust account for aggregate redemption proceeds of  $845.7 million. Under the Merger Agreement, the consummation of the Transactions is conditioned upon, among other things, the amount of Available Closing Acquiror Cash not being less than $2,700.0 million. This scenario gives effect to the maximum number of redemptions that meet all of the conditions to permit consummation of the Transactions.
The pro forma book value information reflects the following Transactions as if they had occurred on June 30, 2020: (a) the Common PIPE Investment and the Convertible PIPE Investment were funded in full and the securities related thereto were issued, (b) the Senior PIK Notes were redeemed in full, (c) 1,500,000 shares of Churchill’s Class A common stock were issued to KG in partial payment of the placement fee as described herein, (d) the entire Note was converted into Working Capital Warrants, (e) all of Churchill’s 27,500,000 outstanding shares of Class B common stock were converted to shares of Churchill’s Class A common stock on a one-for-one basis and (f) 415,700,000 shares of Churchill’s Class A common stock were issued as Closing Share Consideration and $1,521,000,000 of Closing Cash Consideration was paid to Holdings, as agent on behalf of Holdings’ equityholders.
This information is only a summary and should be read together with the selected historical financial information summary included elsewhere in this proxy statement, and the audited and unaudited financial statements of Churchill and MultiPlan Parent and related notes that are included elsewhere in this proxy statement. The unaudited Churchill and MultiPlan Parent pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement.
The unaudited pro forma condensed combined loss per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma condensed combined book value per share information below does not purport to represent what the value of Churchill and MultiPlan Parent would have been had the companies been combined during the period presented.
 
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As of and for the
Six Months Ended June 30, 2020
As of and for the
Year Ended December 31, 2019
Book value per
share – basic and
diluted(1)
Net loss per share – 
basic and diluted
Book value per
share – basic and
diluted(1)
Net income (loss)
per share – basic
and diluted
Churchill
Historical
$ 0.16 $ (0.03) $ 0.00 $ (0.00)
Pro forma Combined (assuming no redemptions)
$ 4.18 $ (0.09) $ (0.01)
Pro forma Combined (assuming maximum redemptions)
$ 3.37 $ (0.10) $ (0.01)
Multiplan Parent
Historical
$ 196,365,000 $ (5,884,000) $ 198,521,800 $ 971,000
Equivalent pro forma (assuming no redemptions)(2)
$ 173,762,600 $ (3,741,300) $ (415,700)
Equivalent pro forma (assuming maximum redemptions)(2)
$ 140,090,900 $ (4,157,000) $ (415,700)
(1)
Book value per share is equal to total shareholders’ equity divided by total basic and diluted outstanding shares.
(2)
Pro forma amounts for Churchill, multiplied by 41,570,000 (the exchange ratio).
The earnings per share amounts exclude the anti-dilutive impact from shares of Churchill’s Class A common stock underlying the warrants and the Convertible Notes.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement includes statements that express Churchill’s and MultiPlan’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transactions, the benefits of the Transactions, including results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which MultiPlan operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting Churchill and MultiPlan. Factors that may impact such forward-looking statements include:

loss of MultiPlan’s customers, particularly MultiPlan’s largest customers;

decreases in MultiPlan’s existing market share or the size of MultiPlan’s Preferred Provider Organization (“PPO”) networks;

effects of competition;

effects of pricing pressure;

the inability of MultiPlan’s customers to pay for MultiPlan’s services;

decreases in discounts from providers;

the loss of MultiPlan’s existing relationships with providers;

the loss of key members of MultiPlan’s management team;

changes in MultiPlan’s regulatory environment, including healthcare law and regulations;

the inability to implement information systems or expand MultiPlan’s workforce;

changes in MultiPlan’s industry;

providers’ increasing resistance to application of certain healthcare cost management techniques;

pressure to limit access to preferred provider networks;

heightened enforcement activity by government agencies;

the possibility that regulatory authorities may assert we engage in unlawful fee splitting or corporate practice of medicine;

interruptions or security breaches of MultiPlan’s information technology systems;

the expansion of privacy and security laws;

MultiPlan’s inability to expand MultiPlan’s network infrastructure;

MultiPlan’s ability to protect proprietary applications;

MultiPlan’s ability to identify, complete and successfully integrate future acquisitions;

MultiPlan’s ability to pay interest and principal on MultiPlan’s notes and other indebtedness, and

MultiPlan’s ability to remediate any material weaknesses or maintain effective internal controls over financial reporting;

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the inability to complete the transactions contemplated by the transaction agreement due to the failure to obtain approval of the stockholders of Churchill or other conditions to closing in the Merger Agreement;
 
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the ability to meet applicable listing standards following the consummation of the transactions contemplated by the Merger Agreement;

the risk that the proposed transaction disrupts current plans and operations of MultiPlan as a result of the announcement and consummation of the transactions contemplated by the Merger Agreement;

the ability to recognize the anticipated benefits of the proposed business combination, which may be affected by, among other things, competition, the ability of the post-combination company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees;

costs related to the proposed business combination;

changes in applicable laws or regulations; the possibility that Churchill or MultiPlan may be adversely affected by other political, economic, business, and/or competitive factors;

the impact of COVID-19 and its related effects on Churchill’s or MultiPlan’s projected results of operations, financial performance or other financial metrics;

the ability to achieve the goals of our Short-Term Execution Plan and recognize the anticipated strategic, operational, growth and efficiency benefits when expected;

pending or potential litigation associated with the proposed business combination;

other factors disclosed in this proxy statement; and

other factors beyond Churchill’s or MultiPlan’s control.
The forward-looking statements contained in this proxy statement are based on Churchill’s and MultiPlan’s current expectations and beliefs concerning future developments and their potential effects on the Transactions and MultiPlan. There can be no assurance that future developments affecting Churchill and/or MultiPlan will be those that Churchill or MultiPlan has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond either Churchill’s or MultiPlan’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Churchill and MultiPlan will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Before a stockholder grants its proxy or instructs how its vote should be cast or votes on the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the director election proposal, the NYSE proposal or the adjournment proposal, it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement may adversely affect Churchill and MultiPlan.
 
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RISK FACTORS
Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement. The following risk factors apply to the business and operations of MultiPlan and will also apply to the business and operations of the post-combination company following the completion of the business combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the business combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of the post-combination company. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Churchill or MultiPlan may face additional risks and uncertainties that are not presently known to us or Multiplan, or that we or Multiplan currently deem immaterial, which may also impair our or MultiPlan’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.
Risks Related to MultiPlan’s Business and Operations Following the Business Combination
References in this section to “we,” “our,” “us,” the “Company” or “MultiPlan” generally refer to MultiPlan Parent and its consolidated subsidiaries, and which shall be deemed to also refer to Churchill following the consummation of the Transactions.
The impact of COVID-19 and related risks could materially affect MultiPlan’s results of operations, financial position and/or liquidity.
In December 2019, a novel strain of coronavirus surfaced and has spread to many countries. The resulting disease, COVID-19, has been characterized as a pandemic by the World Health Organization. The global outbreak of COVID-19 has created significant volatility, uncertainty and economic disruption. The extent to which the COVID-19 pandemic impacts MultiPlan’s business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate geographic spread and severity of the COVID-19 pandemic; the duration of the pandemic; business closures, travel restrictions, social distancing and other actions taken to contain and treat COVID-19; the effectiveness of actions taken to contain and treat SARS-CoV-2, the virus that causes COVID-19; the impact of the pandemic on economic activity; the extent and duration of the effect on healthcare demand and treatment patterns; and any impairment in value of MultiPlan’s tangible or intangible assets which could be recorded as a result of weaker economic conditions. In addition, if the pandemic continues to create disruptions or turmoil in the credit or financial markets, or impacts MultiPlan’s credit ratings, it could adversely affect MultiPlan’s ability to access capital on favorable terms and continue to meet MultiPlan’s liquidity and any acquisition financing needs, all of which are highly uncertain and cannot be predicted.
As the COVID-19 pandemic and any associated protective or preventative measures continue to spread in the United States and around the world, MultiPlan may experience disruptions to MultiPlan’s business. Risks and uncertainties presented by the ongoing effects of the COVID-19 pandemic include the following:

impact of the COVID-19 pandemic on MultiPlan’s results and financial position due to the significant uncertainty in relation to the duration and challenges that the ongoing pandemic may have on the healthcare industry and MultiPlan at this time, including increases in unemployment and reductions in participants covered by our customers’ plans and related services;

effects of new laws on our business;

loss of our customers, particularly our largest customers;

decreases in our existing market share or the size of our PPO networks;

effects of competition;

effects of pricing pressure;

the inability of our customers to pay for our services;
 
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decreases in discounts from providers;

the loss of our existing relationships with providers;

the loss of key members of our management team;

changes in our regulatory environment, including healthcare law and regulations;

the inability to implement information systems or expand our workforce;

changes in our industry;

providers’ increasing resistance to application of certain healthcare cost management techniques;

pressure to limit access to preferred provider networks;

heightened enforcement activity by government agencies;

the possibility that regulatory authorities may assert we engage in unlawful fee splitting or corporate practice of medicine;

interruptions or security breaches of our information technology systems;

the expansion of privacy and security laws;

our inability to expand our network infrastructure;

our ability to protect proprietary applications;

our ability to identify, complete and successfully integrate future acquisitions; and

our ability to pay interest and principal on our notes and other indebtedness.
These and other disruptions related to the COVID-19 pandemic could materially and adversely affect MultiPlan’s business, financial condition and results of operations. In addition, the COVID-19 pandemic may exacerbate the other risks described in this “— Risk Related to MultiPlan’s Business and Operations Following the Business Combination” section.
MultiPlan’s success is dependent on retaining, and the success of, its customers as MultiPlan depends on a core group of customers for a significant portion of its revenues.
If significant customers terminate or do not renew or extend their contracts with MultiPlan, MultiPlan’s business, financial condition and results of operations could be adversely affected. MultiPlan’s customer contracts generally permit its customers to terminate with relatively short notice, including without cause. Many organizations in the insurance industry are consolidating, which could also result in the loss of one or more of MultiPlan’s significant customers. To the extent that these consolidation trends do not cause the loss of customers, MultiPlan could nevertheless encounter greater customer concentration as its customers become parts of larger organizations. In addition, MultiPlan could lose significant customers due to competitive pricing pressures or other reasons. Any of the foregoing factors could also result in MultiPlan receiving a lower ranking in MultiPlan’s customer’s claims matching process, which would reduce the number of claims MultiPlan matches and as a result would reduce MultiPlan’s revenues. Due to the substantial fixed costs in MultiPlan’s business, the loss of a significant customer or receiving a lower ranking in MultiPlan’s customers’ claims matching process could cause a material decline in MultiPlan’s profitability and operating performance.
MultiPlan’s success is also dependent on its customers’ ability to attract individuals to join their health plans. Many individuals receive their coverage through their employer, and thus employers play a large role in selecting which health plan their employees use. MultiPlan’s customers may also lose members due to competition or if businesses reduce headcount and thus the number of employees who receive health insurance. In addition, MultiPlan’s customers may reduce the scope of the health coverage they provide, which may then result in MultiPlan matching fewer claims. If MultiPlan’s customers suffer a decline in the number of members of their health plans or reduce the scope of the insurance coverage they provide, fees from the number of claims MultiPlan matches and the amount of per employee per month (“PEPM”) fees MultiPlan receives may decrease, which may have a material adverse effect on MultiPlan’s business, financial condition and results of operations.
 
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In addition, the majority of MultiPlan’s contracts contain payment terms that are based on a percentage of savings to the customer or on the number of covered employees and most contain no minimum requirements for the amount of claims that the customer must process through MultiPlan. As a result, the termination of customer contracts, the material reduction by MultiPlan’s customers of claims processed through MultiPlan or MultiPlan’s inability to generate significant savings with respect to customer claims would adversely affect MultiPlan’s business, financial condition and results of operations.
The loss of any one of MultiPlan’s largest customers could cause its business to suffer. MultiPlan’s two largest customers accounted for approximately 35% and 20%, respectively, of MultiPlan’s revenues for the year ended December 31, 2019. If MultiPlan loses any one of its largest customers, one of MultiPlan’s largest customers reduces its use of MultiPlan’s services, or if any one of MultiPlan’s largest customers negotiates less favorable terms with MultiPlan, then MultiPlan will lose revenue, which would materially adversely affect MultiPlan’s business, financial condition and results of operations. In addition, MultiPlan’s contracts with these two largest customers are terminable without cause on relatively short notice. Revenue from customers that have accounted for significant revenue in past periods, individually or as a group, may not continue, or if continued, may not reach or exceed historical levels in any period.
If MultiPlan is unable to preserve or increase its market share or maintain its PPO networks, MultiPlan’s results may be adversely affected.
MultiPlan’s business strategy and future success in marketing its services depends in large part on its ability to capture market share as national and regional insurance carriers and large, self-funded employers look for ways to achieve cost savings. MultiPlan cannot assure you that it will successfully market its services to these insurance carriers and employers or that they will not resort to other means to achieve cost savings, including by in-sourcing or expanding their in-sourcing of such services. MultiPlan’s customers may further disaggregate the services MultiPlan provides for them generally or in certain geographical areas, such as individual states, and in doing so create more competitive pricing conditions for such services. Moreover, some of MultiPlan’s customers have acquired or may acquire MultiPlan’s competitors. If the demand for MultiPlan’s services declines or does not increase, MultiPlan’s business may be materially and adversely affected.
The market for MultiPlan’s services is fragmented and competitive and may adversely impact MultiPlan’s competitive position in the market.
MultiPlan faces competition from health maintenance organizations (“HMOs”), other independent PPOs, insurance companies and other managed healthcare companies and providers of non-network repricing services such as fee negotiation. In addition, some of MultiPlan’s competitors have introduced enhanced PPO network products that increase the proportion of contracted in-network provider utilization as compared to out-of-network utilization. These products compromise the market position of MultiPlan’s traditional out-of-network lines of business by reducing out-of-network utilization.
MultiPlan’s customers often select PPO providers by specific geography based upon the magnitude of the discount provided or the breadth of the network. Although MultiPlan is one of the largest independent PPO network providers, regional and local PPO network providers may have deeper discounts or broader networks within their particular region. MultiPlan’s customers may select regional competitors in specific geographies based upon potential deeper discounts and broader networks. Accordingly, MultiPlan cannot assure you that it will continue to maintain its existing customers or its ranking in their claims matching process. MultiPlan also cannot assure you that it will be successful in any new markets that it may enter. MultiPlan’s failure to do any of the foregoing may have a material adverse effect on its business, financial condition and results of operations.
If competition or pricing pressures increase, MultiPlan’s growth and profits may decline.
Consolidation among MultiPlan’s customers may lead to increased pricing pressures. Pricing is highly competitive across all of MultiPlan’s lines of service. PPOs compete on the basis of many factors, including the quality of healthcare services, the breadth of provider networks, the discounts afforded by the provider contracts and the efficiency of the administration of claims. However, MultiPlan expects that price will continue to be a significant competitive factor. MultiPlan’s customer contracts are subject to negotiation
 
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and renegotiation as customers seek to contain their costs, and they may elect to reduce benefits in order to constrain cost increases. Alternatively, customers may purchase different types of products that are less profitable to MultiPlan or move to competitors to obtain more favorable pricing. Industry consolidation may make it more difficult for MultiPlan to attract and retain customers and healthcare providers on advantageous terms. In addition, many of MultiPlan’s current and potential competitors have greater financial and marketing resources than MultiPlan and continued consolidation in the industry will likely increase the number of competitors that have greater resources than MultiPlan. If MultiPlan does not compete effectively in its markets, MultiPlan’s business, financial condition and results of operations may be materially and adversely affected.
The inability of MultiPlan’s customers to pay for its services could decrease MultiPlan’s revenue.
MultiPlan’s health insurance payor customers may be required to maintain restricted cash reserves and satisfy strict balance sheet ratios promulgated by state regulatory agencies. In addition, the financial stability of MultiPlan’s payor customers may be adversely affected by physician groups or associations within their organizations that become subject to costly litigation or become insolvent. MultiPlan’s ability to collect fees for MultiPlan’s services may become impaired if MultiPlan’s payor customers are unable to pay for MultiPlan’s services because they need to maintain cash reserves, if they fail to maintain required balance sheet ratios or if they become insolvent. The potential financial instability of MultiPlan’s customers in the future could adversely affect MultiPlan’s revenues and cash flows.
MultiPlan’s PPO networks may experience decreases in discounts from providers, thereby adversely affecting MultiPlan’s competitive position and revenue.
MultiPlan’s PPO networks receive discounts from healthcare providers (such as acute care hospitals, practitioners and ancillary facilities) who participate in such networks. These discounts could be reduced by the healthcare providers’ desire to increase their net level of reimbursement or to offset reductions, or lack of adequate increases, in reimbursement from payors or from MultiPlan’s PPO competitors, any of whom may have greater market penetration and/or the ability to direct more patients to such providers. Any such reductions may reduce MultiPlan’s revenues and make MultiPlan’s network less attractive to its customers.
MultiPlan depends on its providers to maintain the profitability of MultiPlan’s business and expand MultiPlan’s operations.
The healthcare providers that constitute MultiPlan’s network are integral to MultiPlan’s operations. MultiPlan’s growth depends on MultiPlan’s ability to retain its existing providers and to attract additional providers to its network. Typical contracts with MultiPlan’s providers have a one-year term, renewable automatically for successive one-year terms (although most such contracts permit early termination without penalty and with short notice periods). These contracts are also subject to negotiation and revisions with respect to the level and amount of price concessions for medical services. MultiPlan’s revenues are based on a percentage of the price concessions from these providers that apply to claims of MultiPlan’s payor customers. In addition, MultiPlan’s ability to contract at competitive rates with its PPO providers will affect the attractiveness and profitability of MultiPlan’s products. Increasing consolidation in the provider sector also may make it more difficult for MultiPlan to contract at competitive rates and could affect the profitability of MultiPlan’s products.
The termination of a significant number of contracts with MultiPlan’s high volume providers, the inability to replace such contracts, or the negotiation of contracts with lower discounts resulting in reduced price concessions would reduce the number and value of claims MultiPlan is able to match and the attractiveness of MultiPlan’s network to MultiPlan’s customers, each of which could have a material adverse effect on MultiPlan’s business, financial condition and results of operations.
If we do not continue to attract, motivate and retain members of our senior management team and qualified employees, we may not be able to support our operations.
The completion and execution of our strategies depend on the continued service and performance of our senior management team. If we lose key members of our senior management team, we may not be able to effectively manage our current and future operations.
 
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In addition, our business depends on our ability to continue to attract, motivate and retain a large number of skilled employees across all of our product lines. There is a limited pool of employees who have the requisite skills, training and education. We compete with many businesses and organizations that are seeking skilled individuals, particularly those with experience in healthcare and insurance industries. Attracting and retaining highly skilled employees will be costly as we offer competitive compensation packages to prospective and current employees.
Competition for professionals across our business can be intense, as other companies seek to enhance their positions in the markets we serve. In addition, competition for experienced talent in our faster growing geographic areas, such as Illinois, New York and Texas, continues to intensify, requiring us to increase our focus on attracting and developing highly skilled employees in our most strategically important locations in those areas.
Future organizational changes, including the implementation of our cost savings initiatives, could also cause our employee attrition rate to increase. If we are unable to continue to identify or be successful in attracting, motivating and retaining appropriately qualified personnel, our business, financial condition and results of operations would be adversely affected.
If MultiPlan is unable to implement its operational and financial information systems or expand, train, manage and motivate its workforce, MultiPlan’s business may be adversely affected.
The success of MultiPlan’s business strategy depends in part on its ability to expand its operations in the future. MultiPlan’s growth has placed, and will continue to place, increased demands on MultiPlan’s information systems and other resources and further expansion of its operations will require substantial financial resources. Our growth strategies include the evaluation of opportunities in new geographic markets as well as in adjacent and new market verticals. Any expansions into such markets could significantly increase the demands placed on our operational and financial information systems and our workforce. To accommodate MultiPlan’s past and anticipated future growth and to compete effectively, MultiPlan will need to continue to integrate its financial information systems and expand, train, manage and motivate its workforce. Furthermore focusing MultiPlan’s financial resources on the expansion of its operations may negatively impact MultiPlan’s financial results. Any failure to implement MultiPlan’s operational and financial information systems, or to expand, train, manage or motivate its workforce, may adversely affect MultiPlan’s business.
MultiPlan operates in an industry that is subject to extensive federal, state and local regulation. Changes in existing health care law and regulatory interpretations on a state or federal level may adversely affect MultiPlan.
The healthcare industry is subject to extensive and evolving federal, state and local regulations, including among other things, laws and regulations relating to:

health benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);

privacy and security of patient information, including the Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”), and regulations promulgated thereunder, which MultiPlan collectively refers to as “HIPAA”;

the conduct of operations, including fraud and abuse, anti-kickback, patient inducement and false claims prohibitions;

the operation of provider networks, including transparency, access, licensing, certification and credentialing requirements;

the methods of payment of out of network claims, including “surprise” billing;

health information technology;

breach of duty, the corporate practice of medicine and fee-splitting prohibitions;

laws and regulations relating to business corporations in general;
 
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additional restrictions relating to the ability of MultiPlan to utilize the claims data it collects from providers; and

payors subject to the requirements for health reform under the Affordable Care Act.
As a provider of network management services to its customers and as a contractor and/or subcontractor with federal and state governments, MultiPlan is subject to extensive and increasing regulation by a number of governmental entities at the federal, state and local levels with respect to the above laws. Because of the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of MultiPlan’s business activities could be subject to challenge under one or more of such laws from time to time, including in private litigation. Statutory changes to, or changes in the interpretation or enforcement of, the laws and regulations described above may significantly impact or restrict MultiPlan’s ability to carry on its business as currently conducted and may have a material adverse impact on MultiPlan’s business, financial condition and results of operations. These risks may be exacerbated by our expansion into new geographic markets and, in particular, by any expansion into international markets.
Changes in the healthcare industry could adversely affect MultiPlan.
MultiPlan’s business is dependent on a variety of factors, including MultiPlan’s ability to enter into contracts with payors and providers on terms attractive to all parties and the absence of substantial changes in the healthcare industry that would diminish the need for the services offered by MultiPlan. MultiPlan’s ability to continue conducting business in the current manner could be jeopardized if, among other things, a significant number of payors were to seek price concessions directly from providers. In addition, substantial changes in the health care industry, such as the adoption of regulations unfavorable to MultiPlan or MultiPlan’s relationships with payors and providers, including regulations aimed at addressing “surprise” billing (medical bills that arise when an insured patient receives care from an out-of-network provider resulting in costs that were not expected by the patient), a substantial trend towards HMOs from PPOs, the adoption of a single payor healthcare system in the United States or changes caused by, or that result from, the COVID-19 pandemic could have a material adverse effect on MultiPlan’s business, financial condition and results of operations and could cause MultiPlan to alter substantially its business strategy and methods of operation.
Healthcare providers are becoming increasingly resistant to the application of certain healthcare cost management techniques, which may increase MultiPlan’s costs or decrease revenues from MultiPlan’s cost management operations.
Healthcare providers have become more resistant to the use of cost management techniques and are engaging in litigation to avoid application of cost management practices. Litigation brought by healthcare providers has challenged insurers’ claims adjudication and reimbursement decisions, and healthcare cost management providers are sometimes made party to such suits or involved in related litigation. MultiPlan and its subsidiaries have and may, in the future, become involved in such litigation.
New federal and state laws and regulations or other changes that adversely impact healthcare providers or insurers could lead to increased litigation risk to MultiPlan and other cost management providers and insurers. In addition, many healthcare providers and insurers have greater financial resources than MultiPlan and other healthcare cost management providers have and may be more willing to engage in, and devote resources to, litigation as a result. In addition, certain of the agreements MultiPlan enters into include indemnification provisions which may subject MultiPlan to costs and damages in the event of a claim against an indemnified third party. MultiPlan maintains insurance coverage for certain types of claims; however, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.
If lawsuits of this type proliferate, they could materially adversely affect MultiPlan’s results. In addition, lawsuits of this type may affect insurers’ use of MultiPlan’s cost management services.
Pressure from healthcare providers, and/or changes in state laws, regarding access to preferred provider networks may adversely affect MultiPlan’s profitability and ability to expand MultiPlan’s operations.
A number of healthcare providers have historically sought and in the future may seek to limit access to their contractually negotiated network discounts by, for example, limiting either the type of payor or the
 
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type of benefit plan that may access a contractual network discount. In addition, some states have proposed legislation designed to regulate the secondary PPO market by limiting the ability of preferred provider networks to offer broad access to discounted rates negotiated with contracted providers. For example, certain states have proposed or implemented laws limiting access to provider networks by requiring that the applicable network be identified on a member’s identification card in order for the network discount to apply. Although many of MultiPlan’s network offerings are branded, such that members carry identification cards branded with MultiPlan’s network logo, MultiPlan also operates a non-logo business. Where enacted, such laws may adversely affect MultiPlan’s non-logo business by limiting MultiPlan’s ability to continue this business in existing markets or to expand it into new markets.
Heightened enforcement activity by federal and state agencies may increase MultiPlan’s potential exposure to damaging lawsuits, investigations and other enforcement actions.
In recent years, both federal and state government agencies have increased civil and criminal enforcement efforts relating to the healthcare industry. This heightened enforcement activity increases MultiPlan’s potential exposure to damaging lawsuits, investigations and other enforcement actions. Any such investigation or action could force MultiPlan to expend considerable resources to respond to or defend against such investigation or action and could adversely affect MultiPlan’s reputation or profitability.
By way of example, the Affordable Care Act allocated an additional $350.0 million of fraud enforcement funding over 10 fiscal years, starting in fiscal year 2011 and increased the penalties applied under the Federal Sentencing Guidelines for federal health care offenses that affect a governmental program. The fraud enforcement would apply to the Company to the extent MultiPlan is deemed a government contractor for a federal health care program.
A number of laws bear on MultiPlan’s relationships with physicians. There is a risk that state authorities in some jurisdictions may find that MultiPlan’s contractual relationships with physicians violate laws prohibiting the corporate practice of medicine and fee-splitting. These laws generally prohibit the practice of medicine by lay entities or persons and are intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing the physician’s professional judgment. They may also prevent the sharing of professional services income with non-professional or business interests. Judicial and regulatory interpretation or other guidance regarding the application of these types of laws to businesses such as MultiPlan’s is limited. These laws regarding fee-splitting and the corporate practice of medicine could also be invoked by litigants in a breach of contract dispute against MultiPlan or in an action to find MultiPlan’s contracts to be legally invalid or unenforceable. In addition, patients may seek to hold MultiPlan responsible for third parties’ recommendations regarding the appropriateness of providers’ medical treatment plans for patients. MultiPlan could be subject to claims or investigations under certain state laws were such laws interpreted to apply to MultiPlan’s provision of such recommendations.
MultiPlan can provide no assurance that state regulators will not take the position that MultiPlan’s current and planned activities and the conduct of MultiPlan’s business constitute illegal fee-splitting, the unlawful practice of medicine or a breach of any legal duty. Moreover, MultiPlan can provide no assurance that future interpretations or applications of these laws will not require MultiPlan to make material changes to its operations or business, including with respect to MultiPlan’s existing contractual arrangements with providers and payors. If regulatory authorities assert or determine that MultiPlan have violated any of these laws, MultiPlan could be subject to significant penalties and/or restructuring requirements that could have a material adverse impact on MultiPlan’s business, financial condition and results of operations.
We may be unable to achieve some or all of the strategic, operational, growth and other benefits that we expect to realize through our Short-Term Execution Plan. Executing the various aspects of our Short-Term Execution Plan may take longer than expected and require greater resources than we anticipate.
In support of our growth strategy, we have developed a short-term execution plan (the “Short-Term Execution Plan”), which includes initiatives across sales and marketing, product development and mergers and acquisitions, and efficiency measures to help self-fund some of the necessary investments to support these initiatives.
 
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We cannot assure you that we will be able to successfully execute such Short-Term Execution Plan in the short term, or at all, or realize the expected benefits of such Plan. A variety of risks could cause us not to execute such Plan or realize some or all of the expected benefits therefrom. These risks include, among others: higher than expected implementation expenses; delays in the anticipated timing of activities related to such initiatives, in particular with respect to the development and deployment of additional sales and marketing professionals and achievement of certain technology-related product development goals, which will require significant external resources; failure to realize estimated savings from our efficiency measures or, if realized, an inability to sustain such cost savings over time; and the risks and uncertainties inherent in pursuing acquisitions as a portion of our growth strategy in light of our limited acquisition and integration experience. Our ability to successfully manage the organizational changes that we expect to result from the implementation of our Short-Term Execution Plan is important for our future business success. In particular, our reputation and results of operations could be harmed if employee morale, engagement or productivity decline as a result of organizational or other changes we effect as part of our implementation efforts.
Moreover, our implementation of these initiatives may disrupt our operations and performance, and distract management from day-to-day operations and other on-going initiatives, including initiatives relating to becoming a public company, and challenges, such as those presented by the COVID-19 pandemic. In addition, the estimated cost savings from our efficiency initiatives are based on assumptions that may prove to be inaccurate and, as a result, we cannot assure you that our efficiency measures will help offset the costs we expect to incur in connection with the implementation of our Short-Term Execution Plan. As a result, we may incur significant upfront expenses in connection with our Short-Term Execution Plan which may adversely impact our results of operations. Some of these expenses, such as the implementation of certain technology-related initiatives, may increase our fixed overhead costs for the foreseeable future and we may be unable to reduce these costs if such initiatives do not progress according to plan.
If, for any reason, the benefits we realize are less than our estimates, or our improvement initiatives adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially adversely affected.
MultiPlan may not successfully enter new lines of business and broaden the scope of its services.
MultiPlan has entered into new lines of business that are adjacent to its existing lines of business and has broadened the scope of its services, such as the expansion of MultiPlan’s Payment Integrity Solutions services, and may in the future enter into non-adjacent lines of business. MultiPlan may not achieve its expected growth if it does not successfully enter these new lines of business and broaden the scope of its services. Entering new lines of business and broadening the scope of MultiPlan’s services may require significant upfront and ongoing expenditures that MultiPlan may not be able to recoup in the future. These efforts may also divert management’s attention and expose MultiPlan to new risks and regulations. As a result, entering new lines of business and broadening the scope of MultiPlan’s services may have material adverse effects on MultiPlan’s business, financial condition and results of operations.
MultiPlan depends on uninterrupted computer access for its customers and the reliable operation of its information technology systems; any prolonged delays due to data interruptions or revocation of MultiPlan’s software licenses could adversely affect MultiPlan’s ability to operate its business and cause its customers to seek alternative service providers.
Many aspects of MultiPlan’s business are dependent upon its ability to store, retrieve, process and manage data and to maintain and upgrade its data processing capabilities. MultiPlan’s success is dependent on its ability to deliver high-quality and uninterrupted access for its customers to MultiPlan’s computer system, requiring MultiPlan to protect its computer equipment, software and the information stored in servers against damage by fire, natural disaster, power loss, telecommunications failures, unauthorized intrusion and other catastrophic events. Interruption of data processing capabilities for any extended length of time, loss of stored data, programming errors or other technological problems could impair MultiPlan’s ability to provide certain services. A system failure, if prolonged, could result in reduced revenues, loss of customers and damage to MultiPlan’s reputation, any of which could cause MultiPlan’s business to materially suffer. In addition, due to the highly automated environment in which MultiPlan operates its
 
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computer systems, any undetected error in the operation of MultiPlan’s business processes or computer software may cause MultiPlan to lose revenues or subject MultiPlan to liabilities for third party claims. While MultiPlan carries property and business interruption insurance to cover operations, the coverage may not be adequate to compensate MultiPlan for losses that may occur.
MultiPlan’s use and disclosure of individually identifiable information, including health information, is subject to federal and state privacy and security regulations, and MultiPlan’s failure to comply with those regulations or adequately secure the information MultiPlan holds could result in significant liability or reputational harm.
State and federal laws and regulations, including HIPAA, govern the collection, dissemination, use, privacy, confidentiality, security, availability and integrity of individually identifiable information, including protected health information, or PHI. HIPAA establishes basic national privacy and security standards for protection of PHI by covered entities such as MultiPlan’s clients, and the business associates with whom such entities contract for services, including MultiPlan. HIPAA requires both covered entities and business associates to develop and maintain policies and procedures for PHI that is used or disclosed, and to adopt administrative, physical and technical safeguards to protect PHI. MultiPlan’s clients that are covered entities are mandated by HIPAA to enter into written agreements with MultiPlan — known as business associate agreements — that require MultiPlan to safeguard PHI in accordance with HIPAA. As a business associate, MultiPlan is also directly liable for compliance with HIPAA.
Mandatory penalties for HIPAA violations can be significant. A single breach incident can result in violations of multiple standards. If a person knowingly or intentionally obtains or discloses PHI in violation of HIPAA requirements, criminal penalties may also be imposed.
HIPAA authorizes state attorneys general to file suit under HIPAA on behalf of state residents. Courts can award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue MultiPlan in civil court for HIPAA violations, its standards have been used as the basis for a duty of care claim in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
HIPAA further requires covered entities to notify affected individuals without unreasonable delay and in no case later than 60 calendar days after discovery of the breach if their unsecured PHI is subject to an unauthorized access, use or disclosure, though state laws and MultiPlan’s contracts may require shorter breach notification timelines. HIPAA imposes a similar requirement on business associates to notify their covered entity clients. If a breach affects 500 patients or more, it must be reported to the United States Department of Health and Human Services (“HHS”) and local media without unreasonable delay, and HHS will post the name of the breaching entity on its public website. If a breach affects fewer than 500 individuals, the covered entity must log it and notify HHS at least annually.
MultiPlan maintains safeguards that it believes are reasonable and appropriate to protect the privacy and security of PHI and other personally identifiable information consistent with applicable law and MultiPlan’s contractual obligations; however, MultiPlan’s systems may be vulnerable to physical break-ins, viruses, hackers, and other potential sources of security breaches. In addition, MultiPlan may not be able to prevent incidences of inappropriate use or unauthorized access to PHI by its employees or contractors. Any such breaches could result in exposure to liability under federal and state laws and/or under MultiPlan’s contractual arrangements and could adversely impact MultiPlan’s business.
In addition to HIPAA, MultiPlan must comply with state laws that are not preempted by HIPAA, including those that are more stringent than HIPAA requirements.
Numerous other state, federal and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality and security of patient health information, medical records and personal data, and breaches of such information. In addition, Congress and some states are considering new laws and regulations that further protect the privacy and security of medical records or medical information. With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, many states have passed laws regulating the actions that a business must take if it experiences a data breach, such as prompt disclosure to affected customers. Generally, these laws are limited to electronic data and make some exemptions for smaller breaches. Congress has also
 
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been considering similar federal legislation relating to data breaches. The Federal Trade Commission, or FTC, and states’ Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act. In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information. As with HIPAA, these laws may apply directly to MultiPlan’s business or indirectly by contract when MultiPlan provides services to other companies. MultiPlan is currently evaluating potential growth opportunities, including opportunities that involve the processing and analysis of third-party data which may include PHI or other protected personal information, which could increase MultiPlan’s compliance obligations and may subject MultiPlan to state, foreign, federal or other laws that MultiPlan is not currently subject. In the event that MultiPlan is found out of compliance with applicable state, federal and foreign laws and regulations, MultiPlan could potentially be subject to civil or criminal sanctions, which could have a material adverse effect on MultiPlan’s business, financial condition and results of operations.
Computer systems like MultiPlan’s could suffer security and privacy breaches that could negatively impact MultiPlan’s business and reputation, harm both MultiPlan and MultiPlan’s customers and create liability.
MultiPlan currently operates servers and maintains connectivity from multiple facilities. Despite MultiPlan’s implementation of standard network security measures, MultiPlan’s infrastructure may be vulnerable to computer viruses, physical break-ins, attacks by hackers and similar disruptive problems caused by customers or other users. Computer viruses, ransomware and other cyber-attacks, break-ins or other security problems could lead to interruption, delays or cessation in service to MultiPlan’s customers. In addition, MultiPlan’s safeguards may not prevent incidents of inappropriate and/or unauthorized access to protected health information or other personal data by its employees or contractors. Such physical breaches and incidents may result in unauthorized use, disclosure, modification or deletion of protected health or other personally identifiable information that is transmitted or stored over MultiPlan’s networks.
A security or privacy breach may:

expose MultiPlan to liability under federal and state laws related to the privacy and security of health information, including liability to the individuals that are the subject of the information and/or the parties to whom MultiPlan is contractually obligated, and subject MultiPlan to fines or penalties;

increase operating expenses as necessary to notify affected individuals of security breaches, correct problems, comply with federal and state regulations, defend against potential claims and implement and maintain any additional requirements imposed by government action, and take action to manage public relations issues and preserve MultiPlan’s reputation; and

harm MultiPlan’s reputation and deter or prevent customers from using its products and services, and/or cause customers to find other means to achieve cost savings, including by switching to a competitor or by in-sourcing such services.
These problems could also potentially jeopardize the security of confidential information stored in the computer systems of MultiPlan’s customers, which may deter potential customers from doing business with MultiPlan and give rise to possible liability to users whose security or privacy has been infringed. The security and privacy concerns of existing and potential customers may inhibit the growth of the healthcare information services industry in general, and MultiPlan’s customer base and business in particular. A significant security breach could result in loss of customers, loss of revenues, damage to MultiPlan’s reputation, direct damages, costs of repair and detection and other unplanned expenses. While MultiPlan carries professional liability insurance to cover such breaches, the coverage may not be adequate to compensate MultiPlan for losses that may occur.
Failure to adequately protect the confidentiality of MultiPlan’s trade secrets, know-how, proprietary applications, business processes and other proprietary information could adversely affect the value of MultiPlan’s technology and products.
MultiPlan largely relies on its own security systems and confidentiality procedures, including employee nondisclosure agreements for certain employees, to maintain the confidentiality and security of its trade
 
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secrets, know-how, internally developed computer applications, business processes and other proprietary information. If third parties gain unauthorized access to MultiPlan’s information systems or if MultiPlan’s proprietary information is misappropriated, it may have a material adverse effect on MultiPlan’s business, financial condition and results of operations. Trade secrets laws offer limited protection against third party development of competitive products or services. Because MultiPlan lacks the protection of registered copyrights for its internally developed software applications, MultiPlan may be vulnerable to misappropriation of its proprietary applications by third parties or competitors. Enforcing a claim that a third party illegally obtained and is using any of MultiPlan’s proprietary information or technology is expensive and time consuming, and the outcome is unpredictable. The failure to adequately protect MultiPlan’s proprietary information could have a material adverse effect on MultiPlan’s business, financial condition and results of operations.
MultiPlan may be sued by third parties for alleged infringement of their proprietary rights.
MultiPlan’s success depends also in part on MultiPlan not infringing the intellectual property rights of others. MultiPlan’s competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to MultiPlan’s industry. In the future, such third parties may claim that MultiPlan is infringing their intellectual property rights, and MultiPlan may be found to be infringing such rights. Any claims or litigation could cause MultiPlan to incur significant expenses and, if successfully asserted against MultiPlan, could require that MultiPlan pay substantial damages or ongoing royalty payments, prevent MultiPlan from offering its services, or require that MultiPlan comply with other unfavorable terms. Even if MultiPlan were to prevail in such a dispute, any litigation could be costly and time-consuming and divert the attention of MultiPlan’s management and key personnel from MultiPlan’s business operations.
MultiPlan employs third-party and open source licensed software for use in its business, and the inability to maintain these licenses, errors in the software MultiPlan licenses or the terms of open source licenses could result in increased costs, or reduced service levels, which would adversely affect MultiPlan’s business.
MultiPlan’s business relies on certain third-party software obtained under licenses from other companies. MultiPlan anticipates that it will continue to rely on such third-party software in the future. Commercially reasonable alternatives to the third-party software MultiPlan currently licenses may not always be available and such alternatives may be difficult or costly to implement. In addition, integration of new third-party software may require significant work and require substantial investment of MultiPlan’s time and resources. MultiPlan’s use of additional or alternative third-party software would require MultiPlan to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect MultiPlan’s business.
Additionally, the software powering MultiPlan’s technology systems incorporates software covered by open source licenses. The terms of many open source licenses have not been interpreted by U.S. courts and there is a risk that the licenses could be construed in a manner that imposes unanticipated conditions or restrictions on MultiPlan’s ability to operate its systems. In the event that portions of MultiPlan’s proprietary software are determined to be subject to an open source license, MultiPlan could be required to publicly release the affected portions of its source code or re-engineer all or a portion of MultiPlan’s technology systems, each of which could reduce or eliminate the value of its technology system. Such risk could be difficult or impossible to eliminate and could adversely affect MultiPlan’s business, financial condition and results of operations.
Evolving industry standards and rapid technological changes could result in reduced demand for MultiPlan’s services.
Rapidly changing technology, evolving industry standards and the frequent introduction of new and enhanced services characterize the market for MultiPlan’s services. MultiPlan’s success will depend upon its ability to enhance its existing services, introduce new services on a timely and cost-effective basis to meet evolving customer requirements, achieve market acceptance for new services and respond to emerging industry standards and other technological changes. MultiPlan may not be able to respond effectively to technological
 
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changes or new industry standards. Moreover, other companies may develop competitive services that may result in reduced demand for MultiPlan’s services.
MultiPlan’s cash taxes paid and effective tax rate have and will continue to fluctuate from time to time, and increases in either may adversely affect our business, results of operations, financial condition and/or cash flows.
MultiPlan’s cash taxes paid and effective income tax rate are influenced by our projected and actual profitability in the taxing jurisdictions in which we operate as well as changes in income tax rates. Additionally, changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on our cash taxes paid and effective income tax rate. Factors that may affect MultiPlan’s cash taxes paid and/or effective income tax rate include, but are not limited to:

the requirement to exclude from MultiPlan’s quarterly effective income tax calculations losses in jurisdictions where no income tax benefit can be recognized;

actual and projected full year pre-tax income;

changes in existing tax laws and rates in various taxing jurisdictions;

examinations or audits by taxing authorities;

the use of foreign tax credits, and restrictions therein;

changes in our capital structure;

the establishment of valuation allowances against deferred income tax assets if MultiPlan determines that it is more likely than not that future income tax benefits will not be realized; and

provisions of the Tax Cuts and Jobs Act, as modified by the tax provisions of the CARES Act, including (i) base erosion and anti-abuse tax, if applicable, (ii) taxation of foreign-derived intangible income and global intangible low-taxed income and (iii) limitations on deductions for interest, among others.
These factors could have a material adverse effect on MultiPlan’s business, results of operations, financial condition and/or cash flows.
Additionally, MultiPlan relies upon generally accepted interpretations of tax laws and regulations in the countries in which we operate and cannot be certain that these interpretations are accurate or that the responsible taxing authority is in agreement with our views. MultiPlan currently has open examinations with various tax authorities. If a satisfactory resolution cannot be achieved with the tax authorities, the ultimate tax outcome may have a material adverse effect on MultiPlan’s results of operations, financial condition and/or cash flows.
If MultiPlan’s ability to expand its network infrastructure is constrained, MultiPlan could lose customers and that loss could adversely affect its operating results.
MultiPlan must continue to expand and adapt its network and technology infrastructure to accommodate additional users, increased transaction volumes, changing customer requirements and current and future growth initiatives. MultiPlan may not be able to accurately project the rate or timing of increases, if any, in the volume of transactions it processes, reprices or otherwise services or be able to expand and upgrade MultiPlan’s systems and infrastructure to accommodate such increases. Projecting such needs may be particularly difficult for new solutions and services or for the expansion of existing solutions and services into international or other markets in which MultiPlan has limited or no prior experience. MultiPlan may be unable to expand or adapt its network infrastructure to meet additional demand or its customers’ changing needs on a timely basis, at a commercially reasonable cost or at all. MultiPlan’s current information technology systems, procedures and controls may not continue to support its operations while maintaining acceptable overall performance and may hinder MultiPlan’s ability to exploit the market for healthcare applications and services. Service lapses could cause MultiPlan’s users to switch to the services of MultiPlan’s competitors or in-source such services.
 
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If MultiPlan is unable to identify, complete and successfully integrate acquisitions, MultiPlan’s ability to grow its business may be limited and MultiPlan’s business, financial position and results of operations may be adversely impacted.
MultiPlan may not be able to identify, complete and successfully integrate acquisitions in the future and any failure to do so may limit MultiPlan’s ability to grow its business. MultiPlan’s acquisition strategy involves a number of risks, including:

MultiPlan’s ability to find suitable businesses to acquire at affordable valuations or on other acceptable terms;

competition for acquisition targets may lead to substantial increases in purchase prices or one of MultiPlan’s competitors acquiring one of MultiPlan’s acquisition targets;

MultiPlan’s continued dependence on access to the credit and capital markets to fund acquisitions;

prohibition of any of MultiPlan’s proposed acquisitions under United States or foreign antitrust laws;

the diversion of management’s attention from existing operations to the integration of acquired companies;

MultiPlan’s inability to realize expected cost savings and synergies;

expenses, delays and difficulties of integrating acquired businesses into MultiPlan’s existing business structure, which risks are heightened for large-scale acquisitions; and

difficulty in retaining key customers and management personnel.
If MultiPlan is unable to continue to acquire and efficiently integrate suitable acquisition candidates, MultiPlan’s ability to increase revenues and fully implement its business strategy may be adversely impacted, which could adversely affect MultiPlan’s business, financial position and results of operations.
MultiPlan operates in a litigious environment which may adversely affect its financial results.
MultiPlan may become involved in legal actions and claims arising in the ordinary course of business, including litigation regarding employment matters, breach of contract, violations of laws and regulations, and other commercial matters. Due to the inherent uncertainty in the litigation process, the resolution of any particular legal proceeding could result in changes to MultiPlan’s products and business practices and could have a material adverse effect on MultiPlan’s financial position and results of operations.
MultiPlan has identified two material weaknesses in its internal control over financial reporting. If MultiPlan’s remediation of these material weaknesses is not effective, or if MultiPlan experiences additional material weaknesses in the future or otherwise fails to maintain an effective system of internal controls in the future, MultiPlan may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect investor confidence in MultiPlan and, as a result, the value of Churchill’s Class A common stock.
MultiPlan is a private company with limited accounting personnel and other resources with which to address its internal control over financial reporting and will remain a private company until the consummation of the Transactions. In connection with the preparation for this proxy statement, and for the audits of MultiPlan’s consolidated financial statements as of December 31, 2018 and 2019, and for the years ended December 31, 2017, 2018 and 2019, MultiPlan identified two material weaknesses in its internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. MultiPlan has identified the following material weaknesses in its internal controls over financial reporting:

MultiPlan did not maintain a sufficient complement of resources with an appropriate level of accounting knowledge and experience commensurate with the financial reporting requirements for a public company, including condensed timelines to close and sufficient oversight of internal control over financial reporting.
 
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MultiPlan did not maintain sufficient formal accounting policies, procedures and controls for accounting and financial reporting with respect to the requirements and application of public company financial reporting requirements.
MultiPlan cannot assure you that additional significant deficiencies or material weaknesses in its internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties MultiPlan encounters in their implementation, could result in additional significant deficiencies or material weaknesses or result in material misstatements in MultiPlan’s financial statements. If MultiPlan is unable to assert that its internal control over financial reporting is effective, or if MultiPlan’s independent registered public accounting firm is unable to express an opinion as to the effectiveness of MultiPlan’s internal control over financial reporting, when required, lenders and investors may lose confidence in the accuracy and completeness of MultiPlan’s financial reports and MultiPlan may face restricted access to various sources of financing in the future.
These material weaknesses, if not remediated, could result in misstatements of accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
MultiPlan’s management anticipates that its internal control over financial reporting will not be effective until the above material weaknesses are remediated. If MultiPlan’s remediation of these material weaknesses is not effective, or MultiPlan experiences additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting in the future, the accuracy and timing of MultiPlan’s financial reporting may be adversely affected, MultiPlan may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to the NYSE listing requirements, investors may lose confidence in MultiPlan’s financial reporting, and the price of Churchill’s Class A common stock may decline as a result.
We may need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets.
We have substantial balances of goodwill and identified intangible assets. We are required to test goodwill and any other intangible assets with an indefinite life for possible impairment on an annual basis, or more frequently when circumstances indicate that impairment may have occurred. We are also required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment.
Based on the results of the annual impairment test as of June 30, 2019, the fair values of MultiPlan exceeded the carrying value, and goodwill was not impaired. The current goodwill impairment analysis incorporates our expectations for moderate sales growth and the overall outlook was consistent with our long-term projections.
There is significant judgment required in the analysis of a potential impairment of goodwill, identified intangible assets and fixed assets. If, as a result of a general economic slowdown, deterioration in one or more of the markets in which we operate or impairment in our financial performance and/or future outlook, the estimated fair value of our long-lived assets decreases, we may determine that one or more of our long-lived assets is impaired. An impairment charge would be recorded if the estimated fair value of the assets is lower than the carrying value and any such impairment charge could have a material adverse effect on our results of operations and financial position.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.
 
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The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In particular, Section 404 of the Sarbanes-Oxley Act (“Section 404”) will require us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm potentially to attest to, the effectiveness of our internal control over financial reporting. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of Churchill’s Class A common stock.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to develop, maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related and audit-related costs and significant management oversight.
MultiPlan is currently in the process of remediating two material weaknesses in internal control over financial reporting and, even after successfully remediating such material weaknesses, these and other controls, including any new controls that we develop, may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our consolidated financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of Churchill’s Class A common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.
We will incur increased costs and obligations as a result of being a public company.
As a privately held company, we have not been required to comply with certain corporate governance and financial reporting practices and policies required of a publicly traded company. As a publicly traded company, we will incur significant legal, accounting and other expenses that we were not required to incur in the recent past. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated and to be promulgated thereunder, as well as under the Sarbanes-Oxley Act, the Jobs Act, and the rules and regulations of the SEC and national securities exchanges have created uncertainty for public companies and increased the costs and the time that our board of directors and management must devote to complying with these rules and regulations. We expect these rules and regulations to increase our legal and financial compliance costs and lead to a diversion of management time and attention from revenues generating activities.
Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a publicly traded company. However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.
 
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If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a U.S. publicly traded company in a timely and reliable manner.
If we fail to develop and maintain effective internal controls and procedures and disclosure procedures and controls, we may be unable to provide financial information and required SEC reports that a U.S. publicly traded company is required to provide in a timely and reliable fashion. Any such delays or deficiencies could penalize us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and hurt our reputation and could thereby impede our ability to implement our growth strategy. In addition, any such delays or deficiencies could result in our failure to meet the requirements for listing of Churchill’s Class A common stock on a national securities exchange.
The price of Churchill’s Class A common stock after the closing may be volatile.
The price of Churchill’s Class A common stock may fluctuate due to a variety of factors, including:

actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;

mergers and strategic alliances in the industry in which we operate;

market prices and conditions in the industry in which we operate;

changes in government regulation;

pandemics (including COVID-19), natural disasters, potential or actual military conflicts or acts of terrorism;

the failure of securities analysts to publish research about us, or shortfalls in our operating results compared to levels forecast by securities analysts;

announcements concerning us or our competitors; and

the general state of the securities markets.
These market and industry factors may materially reduce the market price of Churchill’s Class A common stock, regardless of our operating performance.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of Churchill’s Class A common stock.
We currently expect that securities research analysts will establish and publish their own periodic projections for our business. These projections may vary widely and may not accurately predict the results we actually achieve. The price of Churchill’s Class A common stock may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades Churchill’s Class A common stock or publishes inaccurate or unfavorable research about our business, the price of Churchill’s Class A common stock could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, the price or trading volume of Churchill’s Class A common stock could decline. While we expect research analyst coverage, if no analysts commence coverage of us, the trading price and volume for Churchill’s Class A common stock could be adversely affected.
Risks Related to the Healthcare Industry and other Legal Regulations
New federal and state laws and regulations could force MultiPlan to change the conduct of its business or operations or affect MultiPlan’s ability to expand its operations into other states.
Federal Legislation
In recent years, Congress has introduced and, in some cases, passed a number of legislative proposals governing various aspects of the healthcare industry, including initiatives to provide greater government control of health care spending, to broaden access to health care services, to address “surprise” billing by out of network providers and to change the operating environment for health care providers and payors.
 
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We are unable to predict the success of such initiatives, but, if passed, these and other efforts may adversely affect our business or operations. Healthcare reform laws such as the Patient Protection and Affordable Care Act (the “Affordable Care Act”) have had a significant impact on the health care industry, including changing the manner in which providers and payors contract for services. In addition, under the Affordable Care Act payors are required to meet certain financial criteria. While these obligations directly affect many of MultiPlan’s customers, the obligations may also affect the contract terms and relationships between MultiPlan and those customers. In addition, there are currently a number of proposals for legislation aimed at addressing “surprise” billing under consideration, including the Consumer Protections Against Surprise Medical Bills Act of 2020 (H.R.5826), Ban Surprise Billing Act (H.R.5800), Lower Health Care Costs Act (S.1895) and No Surprises Act (H.R.3630). While we currently service payor customers that are already subject to state-level “surprise” billing legislation, we cannot assure you that these and other initiatives aimed at addressing “surprise” billing, if implemented, would not adversely impact MultiPlan’s ability to continue certain lines of business in existing markets or expand such business into new markets or adversely affect the contractual terms and relationships between MultiPlan and its customers.
Since its enactment, there have been judicial and congressional challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and modifications to the Affordable Care Act in the future. The current Administration and certain Members of Congress have attempted, and will likely continue to seek, to modify, repeal, or otherwise invalidate all, or certain provisions of, the Affordable Care Act or its implementation or interpretation through further legislative or executive action. For example, effective January 2019, the Jobs Act reduced to $0 the financial penalty associated with not complying with the Affordable Care Act’s individual mandate to carry insurance. These changes may impact the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased. Further, because the financial penalty associated with the individual mandate was effectively eliminated, a federal district court in Texas ruled in December 2018 that the individual mandate is unconstitutional and that the rest of the Affordable Care Act is therefore, invalid. In December 2019, the Fifth Circuit Court of Appeals upheld this decision with respect to the individual mandate but remanded for further consideration of how this affects the rest of the law. The U.S. Supreme Court granted petitions for writs of certiorari to review this case and will hear oral argument in its 2020-2021 term. However, the law remains in place pending appeal. It is uncertain the extent to which any such judicial, legislative, regulatory or administrative changes, if made, may impact MultiPlan’s business or financial condition. Although the Affordable Care Act has not caused MultiPlan to significantly change its customer contracts or other aspects of its business, it is difficult to quantify the financial impact of the Affordable Care Act and there can be no assurances that MultiPlan will not be adversely impacted in the future.
Other legislative or regulatory changes that could significantly harm MultiPlan include, but are not limited to, changes that:

increase the number of individuals covered by government entitlement programs such as Medicare and Medicaid as opposed to private health insurance plans;

impact the operation of provider networks, including changes relating to transparency, access, licensing, certification and credentialing;

limit contractual terms with providers, including audit, payment and termination provisions; and

impose additional health care information privacy or security requirements.
MultiPlan cannot predict what impact, if any, these government proposals and activities, which include efforts to change or reform the administration or interpretation of government health care programs, laws, regulations or policies, might have on it. Accordingly, there can be no assurance that such activities will not limit the expansion of MultiPlan’s business, impose new compliance requirements on MultiPlan or have a material adverse effect on MultiPlan’s business, financial condition and results of operation. The passage and implementation of new federal laws or regulations that govern the conduct of MultiPlan’s business could significantly impact or restrict MultiPlan’s ability to carry on its business as currently conducted and could have a material adverse impact on its business, financial condition and results of operations.
State Legislation
State laws and regulations governing MultiPlan’s business vary widely among the states in which MultiPlan operates, and include laws requiring credentialing of all network providers and “any willing
 
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provider” laws requiring networks to accept as participating providers any qualified professional who is willing to meet the terms and conditions of the network. There is little regulatory or judicial guidance with respect to the application of such laws and in some cases they may increase the costs of operations in such states.
Several states have implemented legislation mandating certain contract terms in provider contracts for group health plans, preferred provider organizations, HMOs and other third-party payors. Depending on the state, these mandatory contract terms may relate to prompt payment, payment amounts and payment methods. As a result of such legislation and similar future legislative initiatives, MultiPlan may be required to amend some of its provider contracts and comply with legislative mandates related to payment.
Some states have also considered legislation designed to regulate the PPO market by limiting the ability of preferred provider networks to offer broad access to discounted rates negotiated with contracted providers. State laws limiting access to provider networks may affect MultiPlan’s ability to continue certain lines of business in existing markets or expand such business into new markets. Some states have also recently considered legislation designed to regulate the manner in which certain insurers should pay for certain categories of out of network claims or aimed at addressing “surprise” billing by out of network providers. State laws regulating the basis of payment may affect MultiPlan’s ability to continue certain lines of business in existing markets or expand such business into new markets and the contractual terms and relationships between MultiPlan and its customers.
Changes to state laws and regulations or the interpretation and enforcement of such state laws and regulations may adversely impact MultiPlan’s existing business in certain states, or restrict MultiPlan’s ability to expand its operations in other states, in each case potentially adversely impacting MultiPlan’s business, financial condition and results of operations.
Risks Related to MultiPlan’s Indebtedness
MultiPlan’s substantial level of indebtedness and significant leverage may materially adversely affect MultiPlan’s ability to raise additional capital to fund MultiPlan’s operations and limit MultiPlan’s ability to react to changes in the economy or MultiPlan’s industry.
MultiPlan Parent, through its subsidiaries, has a substantial amount of indebtedness and is significantly leveraged. As of June 30, 2020, MultiPlan Parent’s subsidiaries had total indebtedness (excluding an aggregate of $1.8 million of letters of credit) of $5,448.8 million, $1,178.7 million of which is indebtedness under the Senior PIK Notes issued by Polaris Intermediate Corp. (“Polaris Intermediate”), one of MultiPlan Parent’s subsidiaries, that is expected to be repaid in connection with the Transactions, and $4,270.1 million of which was indebtedness of MPH Holdings, another of MultiPlan Parent’s subsidiaries. MultiPlan Parent’s substantial level of indebtedness increases the possibility that MultiPlan Parent may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of MultiPlan Parent’s indebtedness. MultiPlan Parent’s substantial indebtedness, combined with MultiPlan Parent’s other financial obligations and contractual commitments, may have a material adverse impact on MultiPlan and its business. For example, it could:

make it more difficult for MultiPlan Parent to satisfy obligations with respect its indebtedness and any repurchase obligations that may arise thereunder;

require MultiPlan to dedicate a substantial portion of cash flow from operations to payments on MultiPlan’s indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, research and development and other purposes;

increase MultiPlan’s vulnerability to adverse economic, market and industry conditions and limit MultiPlan’s flexibility in planning for, or reacting to, these conditions;

expose MultiPlan to the risk of increased interest rates as certain of MultiPlan’s borrowings, including borrowings under the MPH Holdings senior secured credit facilities, are at variable rates of interest;

limit MultiPlan’s flexibility to adjust to changing market conditions and MultiPlan’s ability to withstand competitive pressures, and MultiPlan may be more vulnerable to a downturn in general
 
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economic or industry conditions or be unable to carry out capital spending that is necessary or important to MultiPlan’s growth strategy;

limit MultiPlan’s ability to borrow additional funds or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other corporate purposes; and

limit MultiPlan’s ability to compete with others who are not as highly-leveraged.
The Transactions will be partially funded by the issuance of $1.3 billion in aggregate principal amount of Convertible Notes, which will bear interest at a rate of 6.0% per annum, if interest is paid in cash, or 7.0% per annum, if interest is paid in-kind. In connection with the closing of the Transactions, the Convertible Notes will be the obligation of MultiPlan’s new parent company and are expected to be guaranteed by one of MultiPlan’s subsidiaries.
Despite its current leverage, MultiPlan Parent and its subsidiaries may still be able to incur substantially more indebtedness, including secured indebtedness. This could further exacerbate the risks that MultiPlan Parent and its subsidiaries face.
MultiPlan Parent and its subsidiaries may be able to incur significant additional indebtedness in the future. Although certain of MultiPlan Parent’s subsidiaries are subject to restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent MultiPlan Parent or such subsidiaries from incurring obligations that do not constitute indebtedness. MultiPlan Parent may also seek to increase the borrowing availability under the MPH Holdings senior secured credit facilities through incremental term loans or an increase to the MPH Holdings revolving credit facility commitments under certain circumstances.
MultiPlan’s variable rate indebtedness subjects MultiPlan to interest rate risk, which could cause MultiPlan’s debt service obligations to increase significantly.
All of the borrowings under the MPH Holdings senior secured credit facilities bear interest at variable rates. As a result, an increase in interest rates, whether due to an increase in market interest rates or an increase in its own cost of borrowing, would increase the cost of servicing MultiPlan’s debt even though the amount borrowed remained the same, and MultiPlan’s net income and cash flows, including cash available for servicing MultiPlan’s indebtedness, will correspondingly decrease. A 0.25% increase in interest rates under the MPH Holdings senior secured credit facilities (assuming the MPH Holdings revolving credit facility was fully drawn) would increase MultiPlan’s annual interest expense by approximately $10.9 million (without taking account of LIBOR floors). The impact of such an increase would be more significant than it would be for some other companies because of MultiPlan’s substantial debt. In the future, MultiPlan may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, MultiPlan may not maintain interest rate swaps with respect to all of MultiPlan’s variable rate indebtedness, and any swaps MultiPlan enters into may not fully mitigate MultiPlan’s interest rate risk.
MultiPlan’s debt agreements contain restrictions that limit MultiPlan’s flexibility in operating its business.
The MPH Holdings senior secured credit facilities and indentures that govern the Senior PIK Notes and the 7.125% Senior Notes issued by MPH Holdings contain various covenants that limit Polaris Intermediate and MPH Holdings and their respective restricted subsidiaries’ ability to engage in specified types of transactions. These covenants limit Polaris Intermediate and MPH Holdings and their respective restricted subsidiaries’ ability to, among other things:

incur additional indebtedness or issue certain preferred shares;

pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock;

make certain loans, investments or other restricted payments;
 
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transfer or sell certain assets;

incur certain liens;

place restrictions on the ability of their subsidiaries to pay dividends or make other payments to MPH Holdings and Polaris Intermediate;

guarantee indebtedness or incur other contingent obligations;

consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and

engage in transactions with MultiPlan’s affiliates.
In addition, under the MPH Holdings senior secured credit facilities, in certain circumstances, MPH Holdings is required to satisfy specified financial ratios, including a first-lien secured debt leverage ratio. MPH Holdings’ ability to meet those financial ratios can be affected by events beyond MultiPlan’s control, and MPH Holdings may not be able to meet those ratios and tests.
The restrictions and specified financial ratios could limit MultiPlan’s ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict MultiPlan’s activities or business plans and could adversely affect MultiPlan’s ability to finance its operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in MultiPlan’s interest.
A breach of the covenants under the indentures that govern the Senior PIK Note and the 7.125% Senior Notes or the credit agreement that governs the MPH Holdings senior secured credit facilities could result in an event of default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the MPH Holdings senior secured credit facilities would permit the lenders under the MPH Holdings senior secured credit facilities to terminate all commitments to extend further credit under those facilities. Furthermore, if MultiPlan were unable to repay the amounts due and payable under the MPH Holdings senior secured credit facilities, those lenders could proceed against the collateral granted to them to secure such indebtedness. These actions by lenders could cause cross-acceleration under the indentures that govern the Senior PIK Note and the 7.125% Senior Notes. A significant portion of MultiPlan’s indebtedness then may become immediately due and payable. MultiPlan is not certain whether it would have, or be able to obtain, sufficient funds to make these accelerated payments. If any such indebtedness is accelerated, MultiPlan’s assets may not be sufficient to repay in full such indebtedness and MultiPlan’s other indebtedness.
MultiPlan may not be able to generate sufficient cash to service all of its indebtedness, and may be forced to take other actions to satisfy MultiPlan’s obligations under its indebtedness, which may not be successful.
MultiPlan’s ability to make scheduled payments on or to refinance its debt obligations depends on MultiPlan’s financial condition and operating performance, which in turn are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond MultiPlan’s control. MultiPlan may not be able to maintain a level of cash flows from operating activities sufficient to permit MultiPlan to pay the principal, premium, if any, and interest on its indebtedness.
If MultiPlan’s cash flows and capital resources are insufficient to fund its debt service obligations, MultiPlan could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance its indebtedness. MultiPlan’s ability to restructure or refinance its debt will depend on the condition of the capital markets and MultiPlan’s financial condition at such time. Any refinancing of MultiPlan’s debt could be at higher interest rates and may require MultiPlan to comply with more onerous covenants, which could further restrict MultiPlan’s business operations. The terms of existing or future debt instruments may restrict MultiPlan from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on MultiPlan’s outstanding indebtedness on a timely basis would likely result in a reduction of MultiPlan’s credit rating, which could harm MultiPlan’s ability to incur additional indebtedness. In the absence of such cash flows and resources, MultiPlan could face substantial liquidity problems and might be required to dispose of material assets or operations to meet its debt service and other obligations. The MPH Holdings
 
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senior secured credit facilities and the indentures that govern the Senior PIK Notes and the 7.125% Senior Notes restrict Polaris Intermediate and MPH Holdings and their respective restricted subsidiaries’ ability to dispose of assets and use the proceeds from the disposition. Polaris may not be able to consummate those dispositions or to obtain the proceeds that MultiPlan could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit MultiPlan to meet its scheduled debt service obligations.
A lowering or withdrawal of the ratings assigned to MultiPlan’s debt securities by rating agencies may increase MultiPlan’s future borrowing costs and reduce MultiPlan’s access to capital.
MultiPlan’s debt currently has a non-investment grade rating, and any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes in our performance under assorted financial metrics and other measures of financial strength, our business and financial risk, our industry or other factors determined by such rating agency, so warrant. There can be no assurances that MultiPlan’s credit ratings or outlook will not be lowered in the future in response to adverse changes in these metrics and factors caused by our operating results or by actions that we take, that reduce our profitability, or that require us to incur additional indebtedness for items such as substantial acquisitions, significant increases in costs and capital spending in security and IT systems, significant costs related to settlements of litigation or regulatory requirements, or by returning excess cash to shareholders through dividends. Consequently, real or anticipated changes in MultiPlan’s credit rating will generally affect the market value of MultiPlan’s indebtedness. Additionally, credit ratings may not reflect the potential effect of risks relating to the structure of MultiPlan’s indebtedness. Any future lowering of MultiPlan’s ratings likely would make it more difficult or more expensive for MultiPlan to obtain additional debt financing and may reduce our profitability.
Risks Related to Churchill and the Business Combination
The Sponsor and the Insiders have agreed to vote in favor of the business combination, regardless of how Churchill’s public stockholders vote.
Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, the Sponsor and the Insiders have agreed to vote any shares of common stock owned by them in favor of the business combination proposal. As of the date of this proxy statement, the Sponsor and the Insiders own shares equal to approximately 20% of Churchill’s issued and outstanding shares of common stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the business combination than would be the case if the Sponsor and the Insiders agreed to vote any shares of common stock owned by them in accordance with the majority of the votes cast by the public stockholders.
The Sponsor, certain members of the Churchill Board and certain Churchill officers have interests in the business combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the business combination proposal and approval of the other proposals described in this proxy statement.
When considering the Churchill Board’s recommendation that our stockholders vote in favor of the approval of the business combination proposal and the other proposals described in this proxy statement, our stockholders should be aware that the Sponsor and certain directors and officers of Churchill have interests in the business combination that may be different from, or in addition to, the interests of our stockholders generally. These interests include:

the fact that the Sponsor and the Insiders have agreed not to redeem any of the founder shares in connection with a stockholder vote to approve a proposed initial business combination;

the continued right of the Sponsor to hold Churchill’s Class A common stock and the shares of Churchill’s Class A common stock to be issued to the Sponsor upon exercise of its private placement warrants following the Transactions, subject to certain lock-up periods;
 
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if the trust account is liquidated, including in the event we are unable to complete an initial business combination within the completion window, the Sponsor has agreed to indemnify us to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account;

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the business combination;

the fact that the Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated within the completion window;

the fact that the Sponsor and the Insiders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete an initial business combination within the completion window;

the fact that the Sponsor paid an aggregate of approximately $23,000,000 for its 23,000,000 private placement warrants to purchase shares of Churchill’s Class A common stock and that such private placement warrants will expire worthless if a business combination is not consummated within the completion window;

the fact that Churchill entered into the Investor Rights Agreement with H&F, the Sponsor and other parties named therein, which provides for, among other things, (i) the right to designate directors to the Churchill Board, (ii) registration rights, including, among other things, customary demand, shelf and piggy-back rights, subject to certain restrictions and customary cut-back provisions and (iii) transfer restrictions on certain parties’ shares of Churchill’s Class A common stock or warrants to purchase shares of Churchill’s Class A common stock they receive in connection with the Transactions or otherwise beneficially own as of the Closing Date for certain specified time periods;

the fact that Churchill has engaged KG to act as Churchill’s financial advisor in connection with the Transactions and as a placement agent in connection with the PIPE Investment. Pursuant to this engagement, Churchill will pay KG a transaction fee of $15,000,000 and a placement fee of $15,500,000 (of which up to $15,000,000 shall be payable in shares of Churchill’s Class A common stock based on $10 per share), which shall be conditioned upon the completion of the Mergers and such engagement shall be terminated in full at such time. Therefore, KG and Michael Klein have financial interests in the completion of the Mergers in addition to the financial interest of the Sponsor. KG intends to direct Churchill to pay a portion of such fees totaling $8 million to Project Isaiah, a philanthropic entity formed to provide meals in underserved communities in the United States impacted by the COVID-19 crisis of 2020. Michael Klein is the Chairman of Project Isaiah; and

that funds affiliated with certain members of the Churchill Board have committed to invest in the PIPE Investment, including the following:

Churchill has entered into a Common Subscription Agreement with Garden State for an aggregate commitment of $85,000,000 in the Common PIPE Investment. Michael Klein manages and has an ownership interest in Garden State.

Churchill has entered into a Common Subscription Agreement with TBG for an aggregate commitment of $45,000,000 in the Common PIPE Investment. Jeremy Abson is the president of TBG.

Churchill has entered into Subscription Agreements with Oak Hill for an aggregate commitment of (i) $25,000,000 in the Common PIPE Investment and (ii) $500,000,000 in the Convertible PIPE Investment. Glenn R. August is the Founder, Senior Partner and Chief Executive Officer of Oak Hill.
The personal and financial interests of our officers and directors may have influenced their motivation in identifying and selecting MultiPlan, completing a business combination with MultiPlan and may influence
 
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their operation of the post-combination company following the business combination. This risk may become more acute as the deadline of February 19, 2022 (or May 19, 2022 if Churchill has an executed letter of intent, agreement in principle or definitive agreement for a business combination by February 19, 2022) for completing an initial business combination nears.
The Churchill Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the Churchill stockholders that they vote “FOR” the proposals presented at the special meeting
The NYSE may not continue to list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our common stock and public warrants are currently listed on the NYSE and will be listed on the NYSE upon consummation of the business combination. Our continued eligibility for listing may depend on, among other things, the number of public shares that are redeemed. There can be no assurance that Churchill will be able to comply with the continued listing standards of NYSE following the business combination. If, after the business combination, NYSE delists Churchill’s common stock fr