Subsequent Events

On June 23, 2016, we entered into an Amended and Restated Agreement and Plan of Merger (the “Restated Merger Agreement”) with Elecor Intermediate Holding II Corporation, a Delaware corporation (“Parent”), and Elecor Merger Corporation, a California corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into us, with us surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are affiliates of Platinum Equity, a Beverly Hills-based private equity firm (“Platinum Equity”). Pursuant to the Restated Merger Agreement, at the effective time of the Merger, and as a result of the Merger:


•	each outstanding share of our common stock (other than shares held by any person who properly asserts dissenters’ rights under California law) will be converted into the right to receive an amount in cash equal to $15.50 per share (the “Merger Consideration”); and


•	each restricted stock unit (whether vested or unvested) that is outstanding at the effective time of the Merger will vest in full and will convert into the right to receive an amount in cash equal to the per share Merger Consideration.

Our board, in accordance with and upon the unanimous recommendation of a special committee of independent directors, has approved the Merger Agreement and the transactions contemplated thereby, including the Merger. The Merger was approved by our shareholders at a special meeting held on August 5, 2016. We expect the Merger and the transactions contemplated thereby to close by the end of August 2016.

As a result of the Merger, we will become a wholly-owned subsidiary of Parent and our shares of common stock will no longer be publicly traded. Following closing of the Merger, we will make appropriate filings to cause our common stock to be delisted from the NASDAQ Global Select Market and to be deregistered under the Securities Exchange Act of 1934, as amended.

On June 8, 2016, following the announcement of the Merger, a shareholder class action lawsuit, entitled Chaklos, et al. v. Electro Rent Corp., et al., was filed in the Superior Court of the State of California, Los Angeles County, against us, our directors, Phillip A. Greenberg, Platinum Equity, Parent and Merger Sub. The lawsuit asserts that defendants variously breached, or aided and abetted others in breaching, state law fiduciary duties in connection with their consideration and approval of the Merger. The lawsuit seeks rescission of the Merger Agreement, an injunction barring consummation of the Merger, imposition of a constructive trust of “benefits improperly received by defendants” as a result of any breaches of duty and costs and disbursements of the action.

On June 20, 2016, following the announcement of the Merger, a shareholder class action lawsuit, entitled Wadsworth v. Electro Rent Corp., et al., was filed in the United States District Court for the Central District of California, against us, our directors, Platinum Equity, Parent and Merger Sub. The lawsuit asserts that defendants variously breached, or aided and abetted others in breaching, state law fiduciary duties in connection with their consideration and approval of the Merger. The lawsuit further asserts that the defendants violated securities law in connection with an assortment of alleged material omissions from the preliminary proxy statement. The lawsuit seeks rescission of the Merger Agreement, an injunction barring consummation of the Merger, imposition of a constructive trust of “benefits improperly received by defendants” as a result of any breaches of duty and costs and disbursements of the action.