Item 1.01. Entry into a Material Definitive Agreement.
On March 20, 2023, U.S. Xpress Enterprises, Inc., a Nevada corporation (the
"Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Knight-Swift Transportation Holdings Inc., a Delaware
corporation ("Knight-Swift"), and Liberty Merger Sub Inc., a Nevada corporation
and an indirect wholly owned subsidiary of Knight-Swift ("Merger Subsidiary").
The Merger Agreement provides, among other things, and subject to the terms and
conditions set forth therein, that Merger Subsidiary will be merged with and
into the Company, with the Company surviving as an indirect wholly owned
subsidiary of Knight-Swift (the "Merger").
As previously announced, the Company's Board of Directors (the "Board") formed a
Special Committee of the Board comprised solely of disinterested and independent
directors (the "Special Committee") to exclusively delegate to the Special
Committee the power to (i) evaluate any proposal from Knight-Swift in connection
with a potential acquisition of all, or part of, the equity interests and/or
assets of the Company and (ii) direct and oversee any preliminary discussions
between Knight-Swift and the Company prior to the receipt of an actual proposal
for a potential transaction.
At the conclusion of its review, the Special Committee unanimously (A)
determined that the Merger Agreement and the transactions contemplated thereby,
including the Merger and the Charter Amendment (as defined below), were
advisable, fair to, and in the best interests of the Company and its
stockholders; and (B) recommended that the stockholders approve the Merger
Agreement and the transactions contemplated thereby, including the Merger and
the Charter Amendment. The Special Committee directed that the Merger Agreement
and the transactions contemplated thereby, including the Merger and the Charter
Amendment be submitted to the stockholders of the Company for their adoption and
approval.
Merger Agreement
On the terms and subject to the conditions set forth in the Merger Agreement, at
the effective time of the Merger (the "Effective Time"), each share of Class A
Common Stock, par value $0.01, and Class B Common Stock, par value $0.01
(collectively, the "Company Common Stock") issued and outstanding immediately
prior to the Effective Time will be converted into the right to receive $6.15 in
cash, without interest (such amount per share, the "Per Share Price"), other
than (i) those shares of Company Common Stock owned by the Company as treasury
stock, or by Knight-Swift or Merger Subsidiary, (ii) Company Restricted Shares
(described below) and (iii) any shares of Company Common Stock owned by any
wholly owned subsidiary of Knight-Swift, Merger Subsidiary or of the Company
(including the shares subject to the Rollover Agreement described below).
The Merger Agreement provides that, in lieu of receipt of the Per Share Price
for approximately one-third of their shares of Company Common Stock, Max L.
Fuller, FSBSPE 1, LLC, FSBSPE 2, LLC, FSBSPE 3, LLC, Fuller Family Enterprises,
LLC, William E. Fuller, Max L. Fuller 2008 Irrevocable Trust FBO William E.
Fuller and Max Fuller Family Limited Partnership (collectively, the "Rollover
Holders") will, immediately prior to the Effective Time, contribute such shares
of Company Common Stock to Liberty Holdings Topco LLC, a subsidiary of
Knight-Swift ("Holdings"), in exchange for certain classes of units of Holdings,
pursuant to the Rollover Agreement described below.
The Merger Agreement also provides that at the Effective Time, each outstanding
Company equity award with respect to Company Common Stock will be treated as
follows:
· Company RSUs. Each restricted stock unit with respect to Company Common Stock
(each a "Company RSU") that is vested immediately prior to the Effective Time
(but not yet settled) or that vests solely as a result of the Merger or the
transactions contemplated by the Merger Agreement will be cancelled and
converted into the right to receive an amount in cash (without interest) equal
to (i) the number of shares of Company Common Stock subject to such Company RSU
immediately prior to the Effective Time multiplied by (ii) the Per Share Price,
less applicable taxes required to be withheld. Each Company RSU that is not
vested immediately prior to the Effective Time will be assumed by Knight-Swift
and converted into a corresponding restricted stock unit award with respect to
shares of Knight-Swift common stock, par value, $0.01 (the "Knight-Swift Common
Stock"). Each converted award will continue to have the same terms and
conditions, including with respect to vesting, acceleration and forfeiture, as
applied to the corresponding Company RSU prior to the Effective Time, except
that each such award will cover that number of shares of Knight-Swift Common
Stock equal to the product of (rounded down to the nearest whole number) (A)
the number of shares of Company Common Stock subject to the unvested portion of
the corresponding award of Company RSUs at the Effective Time multiplied by (B)
a fraction equal to the Per Share Price over the volume weighted average price
per share of Knight-Swift Common Stock for the ten consecutive trading days
ending immediately prior to the closing date of the Merger (the "Exchange
Ratio").
· Company Restricted Shares. Each outstanding award of Company Common Stock
granted under a Company equity plan that remain subject to one or more
unsatisfied vesting or vesting-equivalent forfeiture or repurchase conditions
(each a "Company Restricted Share") that is unvested immediately prior to the
Effective Time and that will not vest as a result of the consummation of
transactions contemplated by the Merger Agreement will be assumed by
Knight-Swift and converted into an award of restricted shares denominated in
shares of Knight-Swift Common Stock. Each converted award will continue to have
the same terms and conditions, including with respect to vesting, acceleration
and forfeiture, as applied to the corresponding Company Restricted Share prior
to the Effective Time, except that each such award will cover the number of
shares of Knight-Swift Common Stock equal to the product (rounded down to the
nearest whole number) of (i) the number of shares of Company Common Stock
subject to such award of Company Restricted Shares multiplied by (ii) the
Exchange Ratio.
· Company PSUs. Each restricted stock unit with respect to Company Common Stock
that is subject to outstanding performance-based vesting criteria (each a
"Company PSU") that is vested immediately prior to the Effective Time (but not
yet settled) or that vests solely as a result of the Merger or the transactions
contemplated by the Merger Agreement will be cancelled and converted into the
right to receive an amount in cash (without interest) equal to (i) the number
of shares of Company Common Stock subject to such Company PSU immediately prior
to the Effective Time multiplied by (ii) the Per Share Price, less applicable
taxes required to be withheld. Each Company PSU that is not vested immediately
prior to the Effective Time will be assumed by Knight-Swift and converted into
a corresponding restricted stock unit award with respect to shares of
Knight-Swift Common Stock. Each converted award will continue to have the same
terms and conditions, including with respect to vesting, acceleration and
forfeiture, as applied to the corresponding Company RSU prior to the Effective
Time, except that each such award will cover that number of shares of
Knight-Swift Common Stock equal to the product of (rounded down to the nearest
whole number): (A) the number of shares of Company Common Stock subject to the
unvested portion of the corresponding award of Company RSUs at the Effective
Time (with performance-based vesting conditions deemed satisfied at 100% of
target level achievement) multiplied by (B) the Exchange Ratio.
· Company Options. All options to purchase shares of Company Common Stock
outstanding immediately prior to the Effective Time will be cancelled for no
consideration or payment at the Effective Time.
The converted equity awards described in the foregoing are subject to other
immaterial adjustments to account for provisions rendered inoperative by reason
of the Merger or the transactions contemplated by the Merger Agreement and to
reflect administrative or ministerial changes as Knight-Swift's board of
directors may determine, in good faith, are appropriate.
The obligations of the parties to consummate the Merger are subject to the
satisfaction or waiver of customary closing conditions set forth in the Merger
Agreement, including:
· the adoption of the Merger Agreement and the Merger by a majority of the voting
power of the Company Common Stock entitled to vote on the Merger Agreement and
the Merger (the "Single Class Vote");
· the adoption of the Merger Agreement and the Merger by holders of a majority of
the outstanding shares of Company Class B Common Stock (voting as a single
class) entitled to vote on the Merger Agreement and the Merger (the "Class B
Vote" and together with the Single Class Vote, the "Statutory Merger
Stockholder Approvals");
· the adoption of an amendment to the Company's Third Amended and Restated
Articles of Incorporation (the "Charter Amendment") by (i) a majority of the
voting power of the Company Common Stock entitled to vote on the Charter
Amendment, (ii) the holders of a majority of the outstanding shares of Company
. . .
Item 8.01. Other Events.
On March 21, 2023, the Company and Knight-Swift issued a joint press release
announcing the entry into the Merger Agreement. A copy of the joint press
release is attached as Exhibit 99.1 and is incorporated herein by reference.
Also on March 21, 2023, the Company and Knight-Swift each posted an investor
presentation to their respective investor relations websites related to the
transactions contemplated by the Merger Agreement. The presentation is attached
hereto as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of March 20, 2023, by and
among U.S. Xpress Enterprises, Inc., Knight-Swift Transportation
Holdings Inc. and Liberty Merger Sub Inc.†
10.1 Rollover Agreement, dated as of March 20, 2023, by and among
Knight-Swift Transportation Holdings Inc., Liberty Holdings Topco LLC,
Max L. Fuller, FSBSPE 1, LLC, FSBSPE 2, LLC, FSBSPE 3, LLC, Fuller
Family Enterprises, LLC, William E. Fuller, Max L. Fuller, Max L.
Fuller 2008 Irrevocable Trust FBO William E. Fuller and Max Fuller
Family Limited Partnership.
10.2 Irrevocable Proxy and Agreement, dated as of March 20, 2023, by and
among U.S. Xpress Enterprises, Inc, the members of the Special
Committee, Max L. Fuller, FSBSPE 1, LLC, FSBSPE 2, LLC, FSBSPE 3, LLC,
Fuller Family Enterprises, LLC, William E. Fuller, Max L. Fuller, Max
L. Fuller 2008 Irrevocable Trust FBO William E. Fuller and Max Fuller
Family Limited Partnership.
10.3 Second Amendment to Stockholders' Agreement, dated as of March 20,
2023, by and among U.S. Xpress Enterprises, Inc., Max L. Fuller, Fuller
Family Enterprises, LLC, FSBSPE 1, LLC, FSBSPE 2, LLC, FSBSPE 3, LLC,
William E. Fuller, Irrevocable Trust FBO William E. Fuller, Max Fuller
Family Limited Partnership, Irrevocable Trust FBO Stephen C. Fuller and
Irrevocable Trust FBO Christopher M. Fuller.
99.1 Joint Press Release issued March 21, 2023.
99.2 Investor Presentation dated March 21, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
registrant hereby undertakes to furnish supplementally copies of any of the
omitted schedules upon request by the SEC.
Forward Looking Statements
This communication contains "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995 and other securities
laws, regarding Knight-Swift Transportation Holdings Inc. and U.S. Xpress
Enterprises, Inc., including, but not limited to, statements about the strategic
rationale and benefits of the proposed transaction between Knight-Swift
Transportation Holdings Inc. and U.S. Xpress Enterprises, Inc., including future
financial and operating results, Knight-Swift Transportation Holdings Inc.'s or
U.S. Xpress Enterprises, Inc.'s plans, objectives, expectations and intentions
and the expected timing of completion of the proposed transaction. You can
generally identify forward-looking statements by the use of forward-looking
terminology such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "explore," "evaluate," "forecast," "intend," "may," "might," "plan,"
"potential," "predict," "project," "seek," "should," "targeted," "will," or
"would," or the negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are based on each of the
companies' current plans, objectives, estimates, expectations and intentions and
inherently involve significant risks and uncertainties, many of which are beyond
Knight-Swift Transportation Holdings Inc.'s or U.S. Xpress Enterprises, Inc.'s
control. Although we believe the expectations reflected in any forward-looking
statements are based on reasonable assumptions, we can give no assurance that
our expectations will be attained, and therefore actual results and the timing
of events could differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which include, without
limitation, risks and uncertainties associated with: Knight-Swift Transportation
Holdings Inc.'s and U.S. Xpress Enterprises, Inc.'s ability to complete the
potential transaction on the proposed terms or on the anticipated timeline, or
at all, including risks and uncertainties related to securing the necessary
regulatory and U.S. Xpress Enterprises, Inc. stockholders' approvals and the
satisfaction of other closing conditions to consummate the proposed transaction;
the occurrence of any event, change or other circumstance that could give rise
to the termination of the definitive merger agreement relating to the proposed
transaction; failure to realize the expected benefits of the proposed
transaction; significant transaction costs and/or unknown or inestimable
liabilities; the risk that U.S. Xpress Enterprises, Inc.'s business will not be
integrated successfully, or that such integration may be more difficult,
time-consuming or costly than expected; Knight-Swift Transportation Holdings
Inc.'s financial ability to consummate the proposed transaction, and the
continued availability of capital and financing for Knight-Swift Transportation
Holdings Inc. following the proposed transaction; risks related to future
opportunities and plans for the combined company, including the uncertainty of
expected future regulatory filings, financial performance, supply chain
conditions, gross domestic product changes and results of the combined company
following completion of the proposed transaction; disruption from the proposed
transaction, making it more difficult to conduct business as usual or maintain
relationships with customers, employees, drivers or suppliers, including as it
relates to U.S. Xpress Enterprises, Inc.'s ability to successfully renew
existing customer contracts on favorable terms or at all and obtain new
customers; the ability of U.S. Xpress Enterprises, Inc. to retain and hire key
personnel; the diversion of management's attention from ongoing business
operations; the business, economic and political conditions in the markets in
which U.S. Xpress Enterprises, Inc. operates; the impact of new or changes in
current laws, regulations or other industry standards; effects relating to the
announcement of the proposed transaction or any further announcements or the
consummation of the potential transaction on the market price of U.S. Xpress
Enterprises, Inc.'s common stock; the risk of potential stockholder litigation
associated with the potential transaction, including resulting expense or delay;
risks that the price of U.S. Xpress Enterprises, Inc.'s common stock may decline
significantly if the Merger is not completed; the possibility that U.S. Xpress
Enterprises, Inc. could, following risks that the price of U.S. Xpress
Enterprises, Inc.'s common stock may decline significantly if the Merger is not
completed; the possibility that U.S. Xpress Enterprises, Inc. could, following
the proposed transaction, engage in operational or other changes that could
result in meaningful appreciation in its value; the possibility that U.S. Xpress
Enterprises, Inc. could, at a later date, engage in unspecified transactions,
including restructuring efforts, special dividends or the sale of some or all of
U.S. Xpress Enterprises, Inc.'s assets to one or more as yet unknown purchasers,
which could conceivably produce a higher aggregate value than that available to
U.S. Xpress Enterprises, Inc.'s stockholders in the proposed transaction;
regulatory initiatives and changes in tax laws; the impact of the COVID-19
pandemic on the operations and financial results of U.S. Xpress Enterprises,
Inc. or the combined company; general economic conditions; and other risks and
uncertainties affecting Knight-Swift Transportation Holdings Inc. and U.S.
Xpress Enterprises, Inc., including those described from time to time under the
caption "Risk Factors" and elsewhere in Knight-Swift Transportation Holdings
Inc.'s and U.S. Xpress Enterprises, Inc.'s SEC filings and reports, including
Knight-Swift Transportation Holdings Inc.'s Annual Report on Form 10-K for the
year ended December 31, 2022, U.S. Xpress Enterprises, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 2022, and future filings and reports
by either company. Moreover, other risks and uncertainties of which Knight-Swift
Transportation Holdings Inc. or U.S. Xpress Enterprises, Inc. are not currently
aware may also affect each of the companies' forward-looking statements and may
cause actual results and the timing of events to differ materially from those
anticipated. Knight-Swift Transportation Holdings Inc. and U.S. Xpress
Enterprises, Inc. caution investors that such forward-looking statements are not
guarantees of future performance and that undue reliance should not be placed on
such forward-looking statements. The forward-looking statements made in this
communication are made only as of the date hereof or as of the dates indicated
in the forward-looking statements and reflect the views stated therein with
respect to future events as at such dates, even if they are subsequently made
available by Knight-Swift Transportation Holdings Inc. or U.S. Xpress
Enterprises, Inc. on their respective websites or otherwise. Neither
Knight-Swift Transportation Holdings Inc. nor U.S. Xpress Enterprises, Inc.
undertakes any obligation to update or supplement any forward-looking statements
to reflect actual results, new information, future events, changes in its
expectations or other circumstances that exist after the date as of which the
forward-looking statements were made.
Additional Information and Where to Find It
This communication is being made in connection with the proposed transaction
between U.S. Xpress Enterprises, Inc. and Knight-Swift Transportation Holdings
Inc. In connection with the proposed transaction, U.S. Xpress Enterprises, Inc.
intends to file a proxy statement with the SEC. U.S. Xpress Enterprises, Inc.
may also file other relevant documents with the SEC regarding the proposed
transaction. The information in the preliminary proxy statement will not be
complete and may be changed. The definitive proxy statement will be delivered to
stockholders of U.S. Xpress Enterprises, Inc. This communication is not a
substitute for any proxy statement or any other document that may be filed with
the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF U.S. XPRESS ENTERPRISES, INC. ARE URGED TO
READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the
preliminary proxy statement and the definitive proxy statement (in each case, if
and when available) and other documents containing important information about
U.S. Xpress Enterprises, Inc. and the proposed transaction once such documents
are filed with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by U.S. Xpress
Enterprises, Inc. will be available free of charge on U.S. Xpress Enterprises,
Inc.'s website at www.usxpress.com under the heading "Investors" or,
alternatively, by directing a request by telephone or mail to U.S. Xpress
Enterprises, Inc. at (833) 879-7737 or 4080 Jenkins Road, Chattanooga, TN 37421,
Attention: Investor Relations.
Participants in the Solicitation
U.S. Xpress Enterprises, Inc., its directors and certain of its executive
officers and employees may be deemed to be participants in the solicitation of
proxies from U.S. Xpress Enterprises, Inc.'s stockholders in connection with the
proposed transaction. Information regarding the persons who may, under the rules
of the SEC, be deemed participants in the solicitation of U.S. Xpress
Enterprises, Inc. stockholders in connection with the proposed transaction,
including a description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement when it is filed
with the SEC. Information about these persons is included in U.S. Xpress
Enterprises, Inc.'s annual proxy statement and in other documents subsequently
filed with the SEC, and will be included in the proxy statement when filed.
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