prem14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Rule 14a-101)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
DYNAMEX INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Common Stock, par value $0.01 per share |
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(2) |
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Aggregate number of securities to which transaction applies: |
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9,725,426 shares of the Companys common stock; 324,556 options to acquire shares of the
Companys common stock with an exercise price below $25.00; 30,386 restricted shares of the
Companys common stock (excluding the restricted stock granted by the board of directors of
the Company on September 24, 2010); and performance units of the Company with respect to
64,848 shares of the Companys common stock (excluding the performance units granted by the
board of directors of the Company on September 24, 2010). |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): |
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Solely for the purpose of calculating the registration fee, the underlying value of the
transaction was calculated as the sum of (A) 9,725,426 shares of the Companys common stock,
multiplied by $25.00 per share; (B) 324,556 options to acquire common stock with an exercise
price below $25.00 multiplied by approximately $7.49 per option (which is the difference
between $25.00 and the $17.51 weighted average exercise price of such options); (C) 30,386
restricted shares of the Companys common stock, multiplied by $25.00 per share; and (D)
64,848 shares of the Companys common stock issuable in respect of the outstanding
performance units, multiplied by $25.00 per share (the amounts listed under clause (C) and
(D) exclude the restricted stock and performance units granted by the board of directors of
the Company on September 24, 2010). |
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(4) |
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Proposed maximum aggregate value of transaction: |
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$247,948,710 |
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(5) |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
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Amount Previously Paid: |
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$14,971.80 |
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Form, Schedule or Registration Statement No.: |
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Schedule 14A |
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Filing Party: |
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Dynamex Inc. |
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Date Filed: |
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October 29, 2010 |
[ ],
20[ ]
Dear Stockholder:
We cordially invite you to attend a special meeting of
stockholders of Dynamex Inc., a Delaware corporation, which we
refer to as the Company, to be held on
[ ],
2011 at [ ] a.m. local time, at the offices of
the Company, 5429 LBJ Freeway, Suite 900, Dallas, Texas.
On December 14, 2010, the Company entered into an Agreement
and Plan of Merger, dated as of December 14, 2010 (which
agreement, as it may be amended from time to time, being
referred to herein as the merger agreement), providing for the
acquisition of the Company by TransForce Inc. (which we refer to
as TransForce or Parent). At the special meeting, you will be
asked to consider and vote upon a proposal to adopt the merger
agreement. If the merger contemplated by the merger agreement is
completed, you will be entitled to receive $25.00 in cash,
without interest, less any applicable withholding taxes, for
each share of the Companys common stock owned by you
(unless you have properly exercised your appraisal rights with
respect to your shares).
On October 1, 2010, the Company entered into a merger
agreement with affiliates of Greenbriar Equity Group LLC which
was subsequently amended on November 30, 2010 (as amended,
the Greenbriar merger agreement). Prior to entering into the
merger agreement with TransForce, the Company terminated the
Greenbriar merger agreement in accordance with its terms. The
per share merger consideration offered pursuant to the merger
agreement with TransForce represents a premium of approximately
63% to the closing price of the Companys common stock on
October 1, 2010, the last trading day prior to the public
announcement of the Greenbriar merger agreement, a premium of
approximately 17.6% over the consideration provided by the
initial Greenbriar merger agreement and a premium of
approximately 4.17% to the merger consideration provided by the
amended Greenbriar merger agreement.
The board of directors of the Company, acting upon the unanimous
recommendation of the special committee, which is comprised
entirely of independent members of the board of directors of the
Company, has unanimously determined that the merger referred to
in the merger agreement is fair to, and in the best interests
of, the Company and its stockholders and approved and declared
advisable the merger agreement and the merger and the other
transactions contemplated by the merger agreement. The board of
directors of the Company made its determination after
consultation with its independent legal and financial advisors
and consideration of a number of factors. The board of
directors of the Company recommends that you vote
FOR approval of the proposal to adopt the merger
agreement and FOR approval of the proposal to
adjourn the special meeting, if necessary or appropriate, to
solicit additional proxies.
Your vote is very important. Approval of the proposal to
adopt the merger agreement requires the affirmative vote of
holders of a majority of the outstanding shares of the
Companys common stock entitled to vote thereon. Whether or
not you plan to attend the special meeting, please complete,
date, sign and return, as promptly as possible, the enclosed
proxy card in the accompanying pre-paid reply envelope, or
submit your proxy by telephone or the Internet. If you attend
the special meeting and vote in person, your vote by ballot will
revoke any proxy previously submitted. The failure to vote
will have the same effect as a vote against approval of the
proposal to adopt the merger agreement.
If your shares of the Companys common stock are held in
street name by your bank, broker, trustee or other
nominee, your bank, broker, trustee or other nominee will be
unable to vote your shares of the Companys common stock
without instructions from you. You should instruct your bank,
broker, trustee or other nominee to vote your shares of the
Companys common stock, following the procedures provided
by your bank, broker, trustee or other nominee. The failure
to instruct your bank, broker, trustee or other nominee to vote
your shares of the Companys common stock FOR
approval of the proposal to adopt the merger agreement will have
the same effect as voting against the proposal to adopt the
merger agreement.
The accompanying proxy statement provides you with detailed
information about the special meeting, the merger agreement and
the merger. A copy of the merger agreement is attached as
Annex A to the proxy statement. We encourage you to
read the entire proxy statement and its annexes, including the
merger agreement, carefully. You may also obtain additional
information about the Company from documents we have filed with
the Securities and Exchange Commission.
If you have any questions or need assistance voting your shares
of the Companys common stock, please contact our proxy
solicitor, D.F. King & Co., Inc., by telephone
toll-free at
888-887-0082
(banks, brokers, trustees or other nominees can call collect at
212-269-5550)
or by email at dynamex@dfking.com.
Thank you in advance for your cooperation and continued support.
Sincerely,
-s- James L. Welch
James L. Welch
President and Chief Executive
Officer
The proxy statement is dated
[ ],
20[ ], and is first being mailed to our stockholders
on or about
[ ],
2011.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER,
PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE PROPOSED
MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
DYNAMEX
INC.
5429 LBJ Freeway, Suite 1000
Dallas, Texas 75240
NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
[ ],
2011
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DATE: |
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[ ],
2011 |
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TIME: |
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[ ] a.m. local time |
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PLACE: |
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The offices of the Company, 5429 LBJ Freeway, Suite 900,
Dallas, Texas |
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ITEMS OF BUSINESS: |
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1. To consider and vote on a proposal to adopt the
Agreement and Plan of Merger, dated as of December 14, 2010
as it may be amended from time to time, which we refer to as the
merger agreement, by and among the Company, TransForce Inc., a
Canadian corporation, which we refer to as Parent or TransForce,
and TransForce Acquisition Corp., a Delaware corporation and an
indirect wholly-owned subsidiary of Parent, which we refer to as
Merger Sub, pursuant to which Merger Sub will be merged with and
into the Company, with the Company continuing as the surviving
corporation and becoming an indirect wholly-owned subsidiary of
Parent. A copy of the merger agreement is attached as
Annex A to the accompanying proxy statement.
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2. To consider and vote on a proposal to adjourn the
special meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement.
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3. To transact any other business that may properly come
before the special meeting, or any adjournment or postponement
of the special meeting, by or at the direction of the board of
directors of the Company.
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RECORD DATE: |
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Only stockholders of record at the close of business on
[ ],
20[ ] are entitled to notice of, and to vote at, the
special meeting. All stockholders of record are cordially
invited to attend the special meeting in person. |
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PROXY VOTING: |
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Your vote is very important, regardless of the number of
shares of the Companys common stock you own. The
merger cannot be completed unless the merger agreement is
adopted by the affirmative vote of the holders of a majority of
the outstanding shares of the Companys common stock
entitled to vote thereon. Even if you plan to attend the special
meeting in person, we request that you complete, sign, date and
return, as promptly as possible, the enclosed proxy card in the
accompanying pre-paid reply envelope or submit your proxy by
telephone or the Internet prior to the special meeting to ensure
that your shares of the Companys common stock will be
represented at the special meeting if you are unable to attend.
If you fail to return your proxy card and fail to submit your
proxy by phone or the Internet, your shares of the
Companys common stock will not be counted for purposes of
determining whether a quorum is present at the special meeting
and will be counted as a vote AGAINST the
proposal to adopt the merger agreement. |
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If you are a stockholder of record, voting by ballot at the
special meeting will revoke any proxy previously submitted. If
you hold your shares of the Companys common stock through
a bank, broker, trustee or other nominee, you should follow the
procedures provided by your bank, broker, trustee or other
nominee in order to vote. |
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RECOMMENDATION: |
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The board of directors of the Company, acting upon the unanimous
recommendation of the special committee, which is comprised
entirely of independent members of the board of directors of the
Company, has unanimously determined that the merger is fair to,
and in the best interests of, the Company and its stockholders
and approved and declared advisable the merger agreement and the
merger and the other transactions contemplated by the merger
agreement. The Companys board of directors made its
determination after consultation with its independent legal and
financial advisors and consideration of a number of factors.
The board of directors of the Company recommends that you
vote FOR approval of the proposal to adopt the
merger agreement and FOR approval of the proposal to
adjourn the special meeting, if necessary or appropriate, to
solicit additional proxies. |
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ATTENDANCE: |
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You are entitled to attend the special meeting only if you were
a holder of the Companys common stock as of the close of
business on
[ ],
20[ ], which we refer to as the record date, or hold
a valid proxy for the special meeting. Since seating is limited,
admission to the special meeting will be on a first-come,
first-served basis. You should be prepared to present photo
identification for admittance. If you are not a stockholder of
record but hold shares through a bank, broker, trustee or other
nominee (i.e., in street name), you should provide
proof of beneficial ownership as of the record date, such as
your most recent account statement prior to the record date, a
copy of the voting instruction card provided by your bank,
broker, trustee or other nominee, or similar evidence of
ownership. |
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APPRAISAL: |
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Stockholders of the Company who do not vote in favor of or
submit a proxy in favor of the proposal to adopt the merger
agreement will have the right to seek appraisal of the fair
value of their shares of the Companys common stock if they
deliver a demand for appraisal before the vote is taken on the
merger agreement and comply with all the requirements of
Delaware law, which are summarized in the accompanying proxy
statement and reproduced in their entirety in Annex C
to the accompanying proxy statement, and the merger is
consummated. |
By Order of the Board of Directors,
-s- Richard K. McClelland
Richard K. McClelland
Chairman of the Board of Directors
Dated:
[ ],
20[ ]
Dallas, Texas
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE
ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-PAID REPLY ENVELOPE,
OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU ARE A
STOCKHOLDER OF RECORD AND ATTEND THE SPECIAL MEETING AND VOTE IN
PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY
SUBMITTED.
TABLE OF
CONTENTS
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Annex A
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Agreement and Plan of Merger, dated as of December 14, 2010, by
and among TransForce Inc., TransForce Acquisition Corp. and
Dynamex Inc.
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Annex B
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Opinion of Stephens Inc., dated December 14, 2010
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Annex C
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Section 262 of the General Corporation Law of the State of
Delaware
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SUMMARY
The following summary highlights selected information in this
proxy statement and may not contain all the information that may
be important to you. Accordingly, we encourage you to read
carefully this entire proxy statement, its annexes and the
documents referred to in or incorporated by reference into this
proxy statement. Each item in this summary includes a page
reference directing you to a more complete description of that
topic. You may obtain the information incorporated by reference
in this proxy statement without charge by following the
instructions under Where You Can Find More
Information beginning on page 80 of this proxy
statement.
Parties
to the Merger (Page 19)
Dynamex Inc., or the Company, we or us, is a Delaware
corporation headquartered in Dallas, Texas. We are a leading
provider of
same-day
delivery and logistic services in the United States and Canada.
Unless the context otherwise requires, references to the
Company, we or us in this proxy statement include the Company
and our subsidiaries on a consolidated basis.
TransForce Inc., or Parent, is a Canadian corporation
headquartered in Montréal, Québec, Canada. Parent is
the leader in Canadas transportation and logistics
industry and its shares are listed on the Toronto Stock Exchange
under the symbol TFI. Under the terms of the merger
agreement, upon consummation of the proposed merger, the Company
will be an indirect wholly-owned subsidiary of Parent.
TransForce Acquisition Corp., or Merger Sub, is a
Delaware corporation that is an indirect wholly-owned subsidiary
of Parent and was organized solely for the purpose of entering
into the merger agreement and consummating the transactions
contemplated by the merger agreement. Under the terms of the
merger agreement, Merger Sub will merge with and into the
Company, with the Company continuing as the surviving
corporation. Upon consummation of the proposed merger, Merger
Sub will cease to exist.
In this proxy statement, we refer to the Agreement and Plan of
Merger, dated as of December 14, 2010, as it may be further
amended from time to time, by and among the Company, Parent and
Merger Sub, as the merger agreement or the TransForce merger
agreement, and the merger of Merger Sub with and into the
Company as the merger.
The
Special Meeting (Page 20)
Time,
Place and Purpose (Page 20)
The special meeting will be held on
[ ],
2011, starting at
[ ] a.m.
local time, at the offices of the Company, 5429 LBJ Freeway,
Suite 900, Dallas, Texas.
At the special meeting, holders of the Companys common
stock, par value $0.01 per share, will be asked to approve the
proposal to adopt the merger agreement and the proposal to
approve any adjournment of the special meeting, if necessary or
appropriate, to solicit additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement.
Record
Date and Quorum (Page 20)
You are entitled to receive notice of, and to vote at, the
special meeting if you owned shares of the Companys common
stock at the close of business on
[ ],
20[ ],
which the Company has set as the record date for the special
meeting and which we refer to as the record date. You will have
one vote for each share of the Companys common stock that
you owned on the record date. As of the record date, there were
[ ] shares
of the Companys common stock outstanding and entitled to
vote at the special meeting. A majority of the shares of the
Companys common stock outstanding at the close of business
on the record date and entitled to vote at the meeting, present
in person or represented by proxy at the special meeting
constitutes a quorum for the purposes of the special meeting.
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Vote
Required (Page 20)
Approval of the proposal to adopt the merger agreement requires
the affirmative vote of the holders of a majority of the
outstanding shares of the Companys common stock entitled
to vote thereon.
Assuming a quorum is present at the special meeting, approval of
the proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies requires the vote of
a majority of the votes cast by stockholders present in person
or represented by proxy and entitled to vote at the special
meeting. If a quorum is not present at the special meeting,
approval of a proposal to adjourn the special meeting will
require the affirmative vote of the majority of shares present
in person or represented by proxy at the special meeting and
entitled to vote on the proposal.
Proxies
and Revocation (Page 22)
Any stockholder of record entitled to vote at the special
meeting may submit a proxy by telephone, over the Internet, or
by returning the enclosed proxy card in the accompanying
pre-paid reply envelope, or may vote in person at the special
meeting. If your shares of the Companys common stock are
held in street name by your bank, broker, trustee or
other nominee you should instruct your bank, broker, trustee or
other nominee on how to vote your shares of the Companys
common stock using the instructions provided by your bank,
broker, trustee or other nominee. If you fail to submit a proxy
or vote in person at the special meeting, or abstain, or you do
not provide your bank, broker, trustee or other nominee with
instructions, as applicable, your shares of the Companys
common stock will not be voted on the proposal to adopt the
merger agreement, which will have the same effect as a vote
AGAINST approval of the proposal to adopt the
merger agreement.
You have the right to revoke a proxy, whether delivered over the
Internet, by telephone or by mail, at any time before it is
exercised, by voting at a later date through any of the methods
available to you, by giving written notice of revocation to our
Corporate Secretary, which must be filed with the Corporate
Secretary by the time the special meeting begins, or by voting
by ballot at the special meeting. Attending the special meeting,
by itself, is not enough to revoke a proxy. If you are a
beneficial owner and wish to revoke your voting instructions you
should follow the instructions provided by your bank, broker,
trustee or other nominee.
The
Merger (Page 25)
The merger agreement provides that Merger Sub will merge with
and into the Company. The Company will be the surviving
corporation in the merger and will continue to do business
following the merger. As a result of the merger, the Company
will cease to be a publicly-traded company. If the merger is
completed, you will not own any shares of the capital stock of
the surviving corporation. Assuming timely satisfaction of
necessary closing conditions, we anticipate that the merger will
be completed in the first quarter of calendar 2011.
Merger
Consideration (Page 25)
In the merger, each outstanding share of the Companys
common stock (except for certain shares held by the Company,
Parent or Merger Sub and shares held by stockholders who have
properly exercised appraisal rights) will be converted into the
right to receive $25.00 in cash, without interest, which amount
we refer to as the per share merger consideration, less any
applicable withholding taxes.
Reasons
for the Merger; Recommendation of the Board of Directors
(Page 36)
After careful consideration of various factors described in the
section entitled The Merger Reasons for the
Merger; Recommendation of the Board of Directors, and upon
the unanimous recommendation of the special committee, the board
of directors of the Company, which we refer to as the board of
directors, unanimously (i) determined that the merger, the
merger agreement and the other transactions contemplated by the
merger agreement are fair to, and in the best interests of, the
Company and its stockholders, and declared it advisable to enter
into the merger agreement, (ii) approved the execution and
delivery of the merger
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agreement, the performance by the Company of its covenants and
agreements contained in the merger agreement and the
consummation of the transactions contemplated thereby, including
the merger, upon the terms and subject to the conditions
contained in the merger agreement and (iii) resolved to
recommend that the stockholders adopt the merger agreement and
directed that such matter be submitted for consideration of the
stockholders of the Company at the special meeting.
In considering the recommendation of the board of directors with
respect to the proposal to adopt the merger agreement, you
should be aware that certain of our directors and executive
officers have interests in the merger that are different from,
or in addition to, your interests as a stockholder. The board of
directors was aware of and considered these interests, among
other matters, in evaluating and negotiating the merger
agreement and the merger, and in recommending that the merger
agreement be adopted by the stockholders of the Company. See the
section entitled The Merger Interests of
Certain Persons in the Merger beginning on page 49.
The board of directors believes that the merger is fair to, and
in the best interests of, the Company and its stockholders and
recommends that the stockholders adopt the merger agreement.
The board of directors recommends that you vote
FOR the adoption of the merger agreement.
Opinion
of Stephens Inc., Financial Advisor (Page 40)
The board of directors received a written opinion, dated
December 14, 2010, from the Companys financial
advisor, Stephens Inc., which we refer to as Stephens, to the
effect that, as of that date and based upon and subject to the
assumptions, procedures, factors, limitations and qualifications
stated in its written opinion, the $25.00 per share cash
consideration to be received by the Companys public
stockholders was fair, from a financial point of view, to the
public stockholders. The full text of Stephens written
opinion, which sets forth assumptions made, procedures followed,
matters considered and limitations on the review undertaken in
connection with the opinion is attached as Annex B
to this proxy statement.
Stephens provided the written opinion for the information and
assistance of the board of directors in connection with its
consideration of the approval of the merger agreement. Stephens
did not recommend the amount or form of consideration payable
pursuant to the merger agreement. Stephens opinion does
not address the merits of the underlying decision by the Company
to enter into the merger agreement, the merits of the merger as
compared to other alternatives potentially available to the
Company (including the Companys previously proposed merger
transactions with an affiliate of Greenbriar Equity Group
LLC) or the relative effects of any alternative transaction
in which the Company might engage, nor is it intended to be a
recommendation to any person as to how to vote on the proposal
to adopt the merger agreement.
Financing
of the Merger (Page 48)
We anticipate that the total amount of funds necessary to
complete the merger will be approximately $263 million, in
the aggregate, comprised of:
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approximately $248 million to pay our stockholders (and
holders of options, restricted stock and performance units) the
amounts due to them under the merger agreement; and
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approximately $15 million to pay related fees and expenses
in connection with the transactions contemplated by the merger
agreement.
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These payments are expected to be funded by Parent from its cash
on hand and committed availability under its credit facilities.
Interests
of Certain Persons in the Merger (Page 49)
In considering the recommendation of our board of directors that
you vote to adopt the merger agreement, you should be aware that
certain of our directors and executive officers have financial
interests in the merger that are different from, or in addition
to, those of our stockholders generally. The board of directors
was aware of and considered these interests, among other
matters, in evaluating and negotiating the merger agreement
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and the merger, and in recommending that the merger agreement be
adopted by the stockholders of the Company. These interests
include the following:
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the vesting and cash-out of all vested and unvested stock
options held by certain of our executive officers and directors,
which will result in an aggregate cash payment to such executive
officers and directors of approximately $2,143,920, based on
holdings as of December 28, 2010, and assuming that the
merger is completed on March 1, 2011;
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the lapsing of all restrictions and cash-out of all shares of
restricted stock held by certain of our executive officers and
directors (other than certain shares of restricted stock granted
under existing plans on September 24, 2010), which will
result in an aggregate cash payment to our executive officers
and directors of approximately $739,400, based on holdings as of
December 28, 2010, and assuming that the merger is
completed on March 1, 2011;
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the vesting and cash-out of all performance units held by
certain of our executive officers (other than certain
performance units granted under existing plans on
September 24, 2010), which will result in an aggregate cash
payment to our executive officers and directors of approximately
$1,621,200, based on holdings as of December 28, 2010, and
assuming that the merger is completed on March 1, 2011;
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pursuant to the retention agreement with Ray E. Schmitz, and
assuming the merger is completed on March 1, 2011 and he
experiences a termination of employment without cause, or if he
elects to terminate his employment under certain circumstances,
after the date the merger is completed, Mr. Schmitz will be
entitled to the payment of a lump sum severance amount and
18-month
continuation of certain of his employee benefits, which will
result in an aggregate cash payment to Mr. Schmitz of
approximately $1,035,000 (exclusive of the estimated value of
the continuation of certain of Mr. Schmitzs employee
benefits); and
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the receipt by each of the members of the special committee of a
fee in the amount of $10,000 per month (pro rated for partial
months) from June 15, 2010 until such time as the special
committee is dissolved (as determined by the board of directors)
for such members services on the special committee,
whether or not the merger occurs.
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See the section entitled The Merger Interests
of Certain Persons in the Merger beginning on page 49.
Material
U.S. Federal Income Tax Consequences of the Merger
(Page 52)
The exchange of shares of the Companys common stock for
cash in the merger will be a taxable transaction for
U.S. federal income tax purposes. In general, a
U.S. holder whose shares of the Companys common stock
are converted into the right to receive cash in the merger will
recognize capital gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of
cash received with respect to such shares (determined before the
deduction of any applicable withholding taxes) and the
U.S. holders adjusted tax basis in such shares.
Backup withholding of tax may apply to cash payments to which a
non-corporate U.S. holder is entitled under the merger
agreement, unless the U.S. holder or other payee provides a
taxpayer identification number, certifies that such number is
correct, and otherwise complies with the backup withholding
rules. You should read the section entitled The
Merger Material U.S. Federal Income Tax
Consequences of the Merger beginning on page 52 for
the definition of U.S. holder and a more
detailed discussion of the U.S. federal income tax
consequences of the merger. Because individual circumstances may
differ, you should also consult your tax advisor regarding the
particular effects of the merger on your federal, state, local
and/or
foreign taxes.
Regulatory
Approvals (Page 53)
Completion of the merger is subject to clearance under
(i) the
Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, or the HSR Act,
(ii) the Competition Act (Canada), R.S.C. 1985, c.
C-34 and regulations thereto, as amended, or the Competition
Act, and (iii) the Canada Transportation Act, 1996, c.10
and regulations thereto, as amended, or the Transportation Act.
Under the HSR Act, and the rules promulgated
4
thereunder by the Federal Trade Commission, or the FTC, the
merger cannot be completed until each of the Company and Parent
file a notification and report form with the FTC and the
Antitrust Division of the Department of Justice, or the DOJ,
under the HSR Act and the applicable waiting period has expired
or been terminated. The Company and Parent filed such
notification and report forms on December 21, 2010 and each
requested early termination of the waiting period. Although no
extension is anticipated in connection with the merger, the
initial
30-day
waiting period may be extended by the DOJ or FTC through the
issuance of a request for additional information and documentary
materials (so-called Second Request) which will toll
the initial waiting period until Parent and the Company certify
their substantial compliance with the Second Request. After
Parent and the Company substantially comply with the Second
Request, the merger will be subject to an additional
30-day
waiting period and the merger cannot be completed until this
waiting period has expired or been terminated.
Under the Competition Act, the merger cannot be completed until
the parties receive from the Commissioner, in respect of the
merger, an advance ruling certificate, or an ARC, pursuant to
Section 102 of the Competition Act, or a no action
letter indicating that the Commissioner has determined
that she does not at that time intend to make an application for
an order under Section 92 of the Competition Act. In the
event that neither an ARC nor a no action letter is
issued or received, the applicable waiting period under
Section 123 of the Competition Act must expire and there
must be no threatened or actual application by the Commissioner
for an order under Sections 92 or 100 of the Competition
Act. The Company and Parent filed the applicable notification
forms on December 21, 2010.
Under the Transportation Act, the merger cannot be completed
until a notice has been received from the Canadian Minister of
Transport that the merger does not raise issues with respect to
the public interest as it relates to national transportation.
The Company and Parent filed the applicable notification forms
on December 21, 2010.
Notwithstanding the regulatory filing requirements under the HSR
Act, the Competition Act and the Transportation Act, Parent has
agreed that it will sell or otherwise dispose of, hold separate,
or divest itself of all or any portion of the business or assets
of the Company or its subsidiaries to eliminate any impediment
that may be asserted under any law governing competition,
monopolies or restrictive trade practices.
Litigation
Relating to the Merger (Page 55)
To the Companys knowledge, there is no pending litigation
against the merger. On October 19, 2010, a putative class
action petition was filed in the District Court of Dallas
County, Texas, challenging the proposed transaction announced on
October 1, 2010, by which DashNow Acquisition Corp. and
DashNow Holding Corp. would acquire the Company. We refer to
this transaction as the prior proposed transaction. On
November 10, 2010, an amended petition was filed. In this
action challenging the prior proposed transaction, styled
Kaner v. Welch et al.,
No. 10-13845
(298th Judicial District Court), the plaintiff purports to
bring the action on behalf of the public stockholders of the
Company and seeks, among other things, an order enjoining the
consummation of the prior proposed transaction and awarding the
plaintiff fees and costs. In the amended petition, the plaintiff
alleges that our directors breached their fiduciary duties, by,
among other things, allegedly failing to engage in an honest and
fair sale process. The amended petition also alleges that the
disclosures contained in the October 29, 2010 preliminary
proxy are incomplete
and/or
materially misleading. The amended petition further alleges that
the Company, DashNow Acquisition Corp. and DashNow Holding Corp.
aided and abetted the directors purported breaches.
Our current deadline to respond to the amended petition is
January 21, 2011. On November 9, 2010, the plaintiff
filed a motion seeking expedited proceedings and discovery. That
motion is currently set for hearing on January 6, 2011. The
Company believes that the claims asserted in the Kaner
action are without merit and intends to vigorously defend
the action.
5
The
Merger Agreement (Page 56)
Treatment
of Common Stock, Options and Other Equity Awards
(Page 58)
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Common Stock. At the effective time of the
merger, each share of the Companys common stock issued and
outstanding (except for shares of the Companys common
stock held by the Company, Parent or Merger Sub, and shares held
by stockholders who have properly exercised appraisal rights)
will convert into the right to receive the per share merger
consideration of $25.00 in cash, without interest, less any
applicable withholding taxes.
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Options. At the effective time of the merger,
each outstanding option will become fully vested and will be
cancelled and terminated and converted into the right to receive
cash equal to the excess of the per share merger consideration
of $25.00 over the exercise price payable in respect of the
Companys common stock issuable under such option.
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Restricted Stock. At the effective time of the
merger, all restrictions on each share of outstanding restricted
stock, other than restricted stock granted under existing plans
on September 24, 2010, will immediately lapse as of the
closing of the merger, and such shares will be converted into
the right to receive the per share merger consideration of
$25.00 in cash, less any applicable withholding taxes.
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Performance Units. At the effective time of
the merger, each outstanding performance unit, other than
certain performance units granted under existing plans on
September 24, 2010, will automatically vest in accordance
with the terms of the applicable award agreement and plan
document and be settled (i) in the Companys common
stock and converted into the right to receive the per share
merger consideration of $25.00 in cash or (ii) to the
extent permitted thereby, in cash by the surviving corporation
on the date of the closing of the merger.
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No
Solicitation of Takeover Proposals (Page 62)
From and after December 14, 2010, we are not permitted to
solicit, initiate or knowingly facilitate or encourage any
inquiry or the making of any takeover proposals or engage in any
negotiations or discussions with any person relating to a
takeover proposal. Notwithstanding these restrictions, under
certain circumstances, we may, from and after December 14,
2010, and prior to the time our stockholders adopt the merger
agreement, respond to certain unsolicited bona fide takeover
proposals or engage in discussions or negotiations with the
person making such takeover proposal. If at any time before the
merger agreement is adopted by our stockholders, our board of
directors determines in good faith, after consultation with
independent financial advisors and outside legal counsel, that
(i) failure to enter into the takeover proposal would
violate the directors fiduciary duties to our stockholders
and (ii) the takeover proposal constitutes a superior
proposal, we may terminate the merger agreement and enter into
such takeover proposal, so long as we comply with certain terms
of the merger agreement, including providing Parent four
business days during which the Company would be required to
negotiate with Parent to enable Parent to revise the terms of
the merger agreement so that such takeover proposal would no
longer constitute a superior proposal, and paying the
termination fee to Parent.
See The Merger Agreement No Solicitation of
Takeover Proposals beginning on page 62 of this proxy
statement and see The Merger Agreement
Termination Fees beginning on page 70 of this proxy
statement.
Conditions
to the Merger (Page 67)
The respective obligations of the Company, Parent and Merger Sub
to consummate the merger are subject to the satisfaction or
waiver of certain customary conditions, including: (i) the
adoption of the merger agreement by our stockholders,
(ii) the receipt of required antitrust approvals and other
approvals (or termination or expiration of applicable waiting
periods), (iii) the accuracy of the representations and
warranties of the parties, (iv) compliance by the parties
with their respective obligations under the merger agreement and
(v) stockholders holding no more than 15% of the shares of
the Companys common stock having exercised appraisal
rights under the DGCL.
6
Termination
(Page 68)
We and Parent may, by mutual written consent, terminate the
merger agreement and abandon the merger at any time prior to the
effective time of the merger, whether before or after the
adoption of the merger agreement by our stockholders.
The merger agreement may also be terminated and the merger
abandoned at any time prior to the effective time of the merger
as follows:
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by either the Company or Parent, if:
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the merger has not been consummated on or before May 31,
2011 (but this right to terminate will not be available to a
party if the failure to consummate the merger on or before
May 31, 2011 was primarily due to the failure of such party
to perform any of its obligations under the merger agreement);
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a law, injunction, judgment or ruling, which we collectively
refer to as a restraint, resulting in enjoining, restraining,
preventing or prohibiting the consummation of the merger or
making the consummation of the merger illegal has become final
and nonappealable (but this right to terminate will not be
available to a party if the issuance of a restraint was
primarily due to the failure of a party to perform its
obligations under the merger agreement); or
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our stockholders meeting has been held and completed and
our stockholders have not adopted the merger agreement at such
meeting or any adjournment or postponement of such meeting.
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we have materially breached or failed to perform any of our
representations, warranties, covenants or other agreements in
the merger agreement, which breach or failure to perform
(i) would give rise to a failure of the condition to
Parents and Merger Subs obligation to close the
merger and (ii) cannot be cured by the Company by the
earlier of (x) 20 days following receipt of written
notice from Parent of such breach or failure or
(y) May 31, 2011; or
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(i) our board of directors (a) fails to recommend to our
stockholders that the stockholders adopt the merger agreement,
which we refer to as the Company recommendation, or fails to
include the Company recommendation in this proxy statement;
(b) changes, qualifies, withholds, withdraws or modifies
(or publicly proposes to do so), in a manner adverse to Parent,
the Company recommendation; (c) takes formal action or
makes any recommendation or public statement in connection with
a tender offer or exchange offer, other than a recommendation
against such offer or other permitted communications; or
(d) adopts, approves or recommends (or publicly proposes to
do so) a takeover proposal; (ii) at any time prior to the
adoption of the merger agreement by our stockholders, our board
of directors has failed to recommend against any takeover
proposal or failed to reaffirm the Company recommendation within
five business days after the public announcement of any takeover
proposal and the receipt of a request to do so from Parent;
(iii) we enter into an agreement with respect to any
takeover proposal; (iv) we fail to call our
stockholders meeting or fail to prepare and mail the proxy
statement in accordance with the merger agreement and such
breach remains uncured for 10 business days after our receipt of
written notice thereof from Parent; or (v) we or our board
of directors has publicly announced an intention to do any of
the foregoing.
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Parent or Merger Sub have materially breached or failed to
perform any of their representations, warranties, covenants or
agreements in the merger agreement, which breach or failure to
perform (i) would give rise to a failure of a condition to
the Companys obligation to close the merger and
(ii) cannot be cured by Parent by the earlier of
(x) 20 days following receipt of written notice from
the Company of such breach or failure or (y) May 31,
2011; or
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at any time prior to the adoption of the merger agreement by our
stockholders, in order to concurrently enter into an agreement
with respect to any takeover proposal that constitutes a
superior
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proposal, if (i) the Company has complied in all material
respects with our obligations described in the section entitled
The Merger Agreement No Solicitation of
Takeover Proposals beginning on page 62 of this proxy
statement and (ii) prior to or concurrently with such
termination, we pay Parent the termination fee discussed in the
section entitled The Merger Agreement
Termination Fees beginning on page 70 of this proxy
statement.
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Termination
Fees (Page 70)
If the merger agreement is terminated in certain circumstances
described under The Merger Agreement
Termination beginning on page 68 of this proxy
statement, the Company may be obligated to pay a termination fee
of approximately $7.7 million.
Remedies
(Page 70)
The Company, Parent and Merger Sub are entitled to injunctions
to prevent breaches of the merger agreement and to specifically
enforce the terms and provisions of the merger agreement, in
addition to any other remedy to which they are entitled at law
or in equity.
In the event of a willful and material breach of the merger
agreement by Parent or Merger Sub, the Companys measure of
damages may include the loss of the economic benefits of the
merger to the Companys stockholders and holders of
options, whether or not the merger agreement was validly
terminated.
Parents receipt of a termination fee will not relieve us
of liability for losses or damages suffered or incurred by
Parent or Merger Sub in connection with the merger agreement,
the merger or any matter forming the basis for termination in
the event of any willful and material breach by the Company of
the merger agreement.
Appraisal
Rights (Page 72)
You are entitled to appraisal rights under the Delaware General
Corporation Law, or the DGCL, in connection with the merger,
provided that you meet all of the conditions set forth in
Section 262 of the DGCL. If you meet all conditions
required to make a proper demand for appraisal rights, you are
entitled to have the fair value of your shares of the
Companys common stock determined by the Delaware Court of
Chancery and to receive cash payment based on that valuation
instead of receiving the per share merger consideration provided
under the merger agreement. The ultimate amount you receive in
an appraisal proceeding may be less than, equal to, or more than
the amount you would have received under the merger agreement.
To exercise your appraisal rights, you must, among other things,
submit a written demand for appraisal to the Company before the
vote is taken on the merger agreement and you must not submit a
proxy or otherwise vote in favor of the proposal to adopt the
merger agreement. Your failure to follow exactly the procedures
specified under the DGCL will result in the loss of your
appraisal rights. See Appraisal Rights beginning on
page 72 of this proxy statement and the text of the
Delaware appraisal rights statute reproduced in its entirety as
Annex C to this proxy statement. If you hold your
shares of the Companys common stock through a bank,
broker, trustee or other nominee and you wish to exercise
appraisal rights, you should consult with your bank, broker,
trustee or other nominee to determine the appropriate procedures
for the making of a demand for appraisal by the bank, broker,
trustee or other nominee. In view of the complexity of the
procedures specified under the DGCL, stockholders who may wish
to pursue appraisal rights should consult their legal and
financial advisors promptly.
Market
Prices of the Companys Common Stock and Dividend
Information (Page 76)
The closing price of the Companys common stock on the
Nasdaq Global Select Market on October 1, 2010, the last
trading day prior to the public announcement of the execution of
the Greenbriar merger agreement, was $15.31 per share. On
[ ],
2011, the most recent practicable date before this proxy
statement was mailed to our stockholders, the closing price for
the Companys common stock on the Nasdaq
8
Global Select Market was
$[ ]
per share. You are encouraged to obtain current market
quotations for common stock in connection with voting your
shares of the Companys common stock. We have never
declared or paid cash dividends on our common stock and the
terms of the merger agreement provide that, from the date of the
merger agreement until the effective time of the merger, we may
not declare, set aside or pay any dividends on shares of our
common stock.
Delisting
and Deregistration of the Companys Common Stock
(Page 78)
If the merger is completed, you will no longer be a stockholder
of our Company, and the Companys common stock will be
delisted from the Nasdaq Global Select Market and deregistered
under the Securities Exchange Act of 1934, as amended, which we
refer to as the Exchange Act. As such, we would no longer file
periodic reports with the Securities and Exchange Commission,
which we refer to as the SEC, on account of the Companys
common stock.
9
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER
The following questions and answers are intended to address
briefly some commonly asked questions regarding the merger, the
merger agreement and the special meeting. These questions and
answers may not address all questions that may be important to
you as a Company stockholder. Please refer to the
Summary and the more detailed information contained
elsewhere in this proxy statement, the annexes to this proxy
statement and the documents referred to in this proxy statement,
which you should read carefully. You may obtain the information
incorporated by reference in this proxy statement without charge
by following the instructions under Where You Can Find
More Information beginning on page 80 of this proxy
statement.
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Q.
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What is the proposed transaction and what effects will it
have on the Company?
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A.
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The proposed transaction is the acquisition of the Company by
Parent pursuant to the merger agreement. If the proposal to
adopt the merger agreement is approved by our stockholders and
the other closing conditions under the merger agreement have
been satisfied or waived, Merger Sub will merge with and into
the Company, with the Company being the surviving corporation.
We refer to this transaction as the merger. As a result of the
merger, the Company will become a subsidiary of Parent and will
no longer be a publicly-traded corporation, the Companys
common stock will be delisted from the Nasdaq Global Select
Market and deregistered under the Exchange Act, we will no
longer file periodic reports with the SEC on account of the
Companys common stock, and you will no longer have any
interest in our future earnings or growth.
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Q.
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What will I receive if the merger is completed?
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A.
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Upon completion of the merger, you will be entitled to receive
the per share merger consideration of $25.00 in cash, without
interest, less any applicable withholding taxes, for each share
of the Companys common stock that you own, unless you have
properly exercised and not withdrawn your appraisal rights under
the DGCL with respect to such shares. For example, if you own
100 shares of the Companys common stock, you will
receive $2,500 in cash in exchange for your shares of the
Companys common stock, less any applicable withholding
taxes. You will not own any shares of the capital stock in the
surviving corporation.
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Q: |
Will I own any shares of Company common stock or Parent
common stock after the merger?
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A:
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No. You will be paid cash for your shares of the
Companys common stock. Our stockholders will not have the
option to receive shares of Parent common stock in exchange for
their shares instead of cash.
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Q.
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How does the per share merger consideration compare to the
market price of the Companys common stock prior to
announcement of the merger?
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A.
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The per share merger consideration represents a premium of
approximately 63% to the closing price of the Companys
common stock on October 1, 2010, the last trading day prior
to the public announcement of the merger agreement with
affiliates of Greenbriar, which we refer to as the Greenbriar
merger agreement, a premium of approximately 86.3% to the
average price for the 30 trading days prior to October 1,
2010, a premium of approximately 17.6% over the consideration
provided by the initial Greenbriar merger agreement and a
premium of approximately 4.17% over the consideration provided
by the amended Greenbriar merger agreement.
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Q.
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What happened to the proposed merger agreement with
affiliates of Greenbriar?
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A.
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As you are aware, the Company previously entered into the
Greenbriar merger agreement with affiliates of Greenbriar. Our
board of directors determined that the proposal received from
Parent was superior to the proposed merger with affiliates of
Greenbriar. Concurrently with the entry into the merger
agreement with Parent and Merger Sub, the Company terminated the
Greenbriar merger agreement in accordance with its terms and
paid to Greenbriar the $7,729,106 termination fee as
contemplated by the Greenbriar merger agreement.
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Q.
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How does the board of directors recommend that I vote?
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A.
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The board of directors unanimously recommends that you vote
FOR approval of the proposal to adopt the
merger agreement and FOR approval of the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement.
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Q.
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What was the role of the special committee?
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A.
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Following receipt of an unsolicited offer by Greenbriar Equity
Group LLC, which we refer to as Greenbriar, to purchase all of
the outstanding shares of the Companys common stock, the
board of directors determined that it was advisable and in the
best interests of the Company and its stockholders to form a
special committee, consisting solely of non-employee,
independent directors, for the purpose of directing a full
review of the offer and engaging in discussions with Greenbriar.
The board of directors appointed each of Craig R. Lentzsch and
Stephen P. Smiley as members of the special committee. The
special committee was delegated full power and authority to
(i) review and evaluate the terms and conditions, and
determine the advisability, of a potential merger of the
Company, (ii) participate, directly or through their or the
Companys advisors, in negotiations with potentially
interested parties of the terms and conditions of a merger, and
(iii) recommend to the full board of directors whether a
merger should be approved or disapproved and any other action
that should be taken by the Company in respect of a merger
transaction. In connection with the approval of the Greenbriar
merger agreement, the board of directors determined to preserve
the special committee and maintain its previously delegated
power and authority so that it could (i) review and
evaluate the terms and conditions, and determine the
advisability of, any alternative transaction to the Greenbriar
merger agreement, including the merger, (ii) consider,
evaluate and negotiate the terms and conditions of any
alternative transaction and (iii) recommend, if
appropriate, any alternative transaction to the board of
directors as being in the best interests of the Company and our
stockholders. See the section entitled The Merger -
Background of the Merger beginning on page 25 of this
proxy statement.
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Q.
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When do you expect the merger to be completed?
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A.
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We are working towards completing the merger as soon as
possible. Assuming timely satisfaction of closing conditions, we
anticipate that the merger will be completed in the first
quarter of calendar 2011. If our stockholders vote to approve
the proposal to adopt the merger agreement, the merger will
become effective as promptly as practicable following the
satisfaction or waiver of the other conditions to the merger.
See the sections entitled The Merger Agreement
Closing and The Merger Agreement
Effective Time beginning on page 56 of this proxy
statement.
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Q.
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What happens if the merger is not completed?
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A.
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If the merger agreement is not adopted by the stockholders of
the Company or if the merger is not completed for any other
reason, the stockholders of the Company will not receive any
payment for their shares of the Companys common stock in
connection with the merger. Instead, the Company will remain an
independent public company and the Companys common stock
will continue to be listed and traded on the Nasdaq Global
Select Market. Under specified circumstances, the Company may be
required to pay to or receive from Parent a fee with respect to
the termination of the merger agreement, as described under
The Merger Agreement - Termination Fees beginning on
page 70 of this proxy statement.
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Q.
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Is the merger expected to be taxable to me?
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A.
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Yes. The exchange of shares of the Companys common stock
for cash pursuant to the merger generally will be a taxable
transaction to U.S. holders (as defined in The
Merger Material U.S. Federal Income Tax
Consequences of the Merger beginning on page 52 of
this proxy statement) for U.S. federal income tax purposes.
If you are a U.S. holder and you exchange your shares of
the Companys common stock in the merger, you will
generally recognize gain or loss in an amount equal to the
difference, if any, between the cash payments made pursuant to
the merger and your adjusted tax basis in your shares of the
Companys common stock. Backup withholding may also apply
to the cash payments made pursuant to the
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merger unless the U.S. holder or other payee provides a
taxpayer identification number, certifies that such number is
correct and otherwise complies with the backup withholding
rules. You should read The Merger Material
U.S. Federal Income Tax Consequences of the Merger
beginning on page 52 of this proxy statement for a more
detailed discussion of the U.S. federal income tax
consequences of the merger. You should also consult your tax
advisor for a complete analysis of the effect of the merger on
your federal, state and local
and/or
foreign taxes.
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Q: |
Do any of the Companys directors or officers have
interests in the merger that may differ from or be in addition
to my interests as a stockholder?
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A. |
Yes. In considering the recommendation of the board of directors
with respect to the merger agreement, you should be aware that
certain of the Companys directors and executive officers
have interests in the merger that are different from, or in
addition to, the interests of our stockholders generally. The
board of directors was aware of and considered these interests,
among other matters, in evaluating and negotiating the merger
agreement and the merger, and in recommending that the merger
agreement be adopted by the stockholders of the Company. See
The Merger Interests of Certain Persons in the
Merger beginning on page 49 of this proxy statement.
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Q: |
What happens to Company stock options in the merger?
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A: |
Upon the consummation of the merger, all outstanding options to
acquire the Companys common stock will accelerate and vest
in full and will then be cancelled. In consideration for the
cancellation of the options, the holder of any such option will
receive an amount equal to the number of shares of the
Companys common stock underlying the option multiplied by
the amount (if any) by which $25.00 exceeds the exercise price
for each share of the Companys common stock underlying the
options, without interest and less any applicable withholding
taxes. If the exercise price of the option is equal to or
exceeds $25.00, the holder of such option will not be entitled
to any payment in connection with the cancellation thereof. For
discussion of tax-related implications, see The
Merger Material U.S. Federal Income Tax
Consequences of the Merger beginning on page 52.
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Q: |
What happens to the shares of restricted stock of the Company
in the merger?
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A: |
Upon the consummation of the merger, all restrictions and
conditions on the shares of restricted stock, other than certain
shares of restricted stock granted under existing plans on
September 24, 2010, which will be cancelled without
payment, will immediately lapse and a holder of restricted stock
will be entitled to receive the per share merger consideration
of $25.00 in cash, without interest, less any applicable
withholding taxes, for each share of the Companys common
stock that the holder owns.
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Q: |
What happens to Company performance units in the merger?
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A:
|
Upon the consummation of the merger, all performance units of
the Company, other than certain performance units granted under
existing plans on September 24, 2010, which will be
cancelled without payment, will automatically vest and will be
settled in common stock of the Company in accordance with the
applicable award agreement and plan documents, or to the extent
permitted by the applicable award agreement and plan documents,
in cash. In the event that the performance units are settled in
common stock of the Company and upon completion of the merger, a
holder will be entitled to receive the per share merger
consideration of $25.00 in cash, without interest, less any
applicable withholding taxes, for each share of the
Companys common stock that the holder owns.
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Q.
|
Why am I receiving this proxy statement and proxy card or
voting instruction form?
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A.
|
You are receiving this proxy statement and proxy card or voting
instruction form because you own shares of the Companys
common stock as of
[ ],
20[ ], the record date for the
special meeting. This proxy statement describes matters on which
we urge you to vote and is intended to assist you in deciding
how to vote your shares of the Companys common stock with
respect to such matters.
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12
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Q.
|
When and where is the special meeting?
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A.
|
The special meeting of stockholders of the Company will be held
on
[ ],
2011 at [ ] a.m. local time,
at the offices of the Company, 5429 LBJ Freeway, Suite 900,
Dallas, Texas.
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Q.
|
What am I being asked to vote on at the special meeting?
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A.
|
You are being asked to consider and vote on (i) a proposal
to adopt the merger agreement that provides for the acquisition
of the Company by Parent and (ii) a proposal to adjourn the
special meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement.
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Q.
|
What vote is required for the Companys stockholders to
approve the proposal to adopt the merger agreement?
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A.
|
The adoption of the merger agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
the Companys common stock entitled to vote thereon.
|
Because the affirmative vote required to approve the proposal to
adopt the merger agreement is based upon the total number of
outstanding shares of the Companys common stock, if you
fail to submit a proxy or vote in person at the special meeting,
or you abstain, or you do not provide your bank, broker, trustee
or other nominee with instructions, as applicable, this will
have the same effect as a vote AGAINST
approval of the proposal to adopt the merger agreement.
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Q.
|
What vote of our stockholders is required to approve the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies?
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A.
|
Assuming a quorum is present, approval of the proposal to
adjourn the special meeting, if necessary or appropriate, for
the purpose of soliciting additional proxies requires the vote
of a majority of the votes cast by stockholders present in
person or represented by proxy and entitled to vote at the
special meeting. If a quorum is not present at the special
meeting, approval of a proposal to adjourn the special meeting
will require the affirmative vote of the majority of shares
present in person or represented by proxy at the special meeting
and entitled to vote on the proposal.
|
Assuming a quorum is present, abstaining will not have an effect
on the proposal to adjourn the special meeting. If a quorum is
not present, abstaining will have the same effect as a vote
AGAINST approval of the proposal to adjourn
the special meeting.
If your shares of the Companys common stock are held
through a bank, broker, trustee or other nominee and you do not
instruct your bank, broker, trustee or other nominee to vote
your shares of the Companys common stock, your shares of
the Companys common stock will not be voted, but this will
not have an effect on the proposal to adjourn the special
meeting, regardless of whether or not a quorum is present.
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Q.
|
Who can vote at the special meeting?
|
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A.
|
All of our holders of the Companys common stock of record
as of the close of business on
[ ],
20[ ], the record date for the
special meeting, are entitled to receive notice of, and to vote
at, the special meeting. Each holder of the Companys
common stock is entitled to cast one vote on each matter
properly brought before the special meeting for each share of
the Companys common stock that such holder owned as of the
record date.
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Q.
|
What is a quorum?
|
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A.
|
A majority of the shares of the Companys common stock
outstanding at the close of business on the record date and
entitled to vote at the meeting, present in person or
represented by proxy, at the special meeting constitutes a
quorum for the purposes of the special meeting. Abstentions and
broker non-votes are counted as present for the purpose of
determining whether a quorum is present. A quorum is necessary
to transact business at the special meeting.
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13
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|
Q.
|
How do I vote?
|
|
A.
|
If you are a stockholder of record as of the record date, you
may have your shares of the Companys common stock voted on
matters presented at the special meeting in any of the following
ways:
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in person you may attend the special meeting and
cast your vote there;
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|
by proxy stockholders of record can choose to vote
by proxy by signing and dating the proxy card you receive and
returning it in the accompanying pre-paid reply envelope;
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over the Internet the website for Internet voting is
identified on your proxy card; or
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by using a toll-free telephone number noted on your proxy card.
|
If you are a beneficial owner, please refer to the instructions
provided by your bank, broker, trustee or other nominee to see
which of the above choices are available to you. Please note
that if you are a beneficial owner and wish to vote in person at
the special meeting, you must provide a legal proxy from your
bank, broker, trustee or other nominee.
A control number, located on your proxy card, is designed to
verify your identity and allow you to vote your shares of the
Companys common stock, and to confirm that your voting
instructions have been properly recorded, when voting over the
Internet or by telephone. Please be aware that if you vote over
the Internet, you may incur costs such as telephone and Internet
access charges for which you will be responsible.
Even if you plan to attend the special meeting, we request that
you complete, sign, date and return, as promptly as possible,
the enclosed proxy card in the accompanying pre-paid reply
envelope or submit your proxy by telephone or the Internet prior
to the special meeting to ensure that your shares of the
Companys common stock will be represented at the special
meeting if you are unable to attend.
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|
Q.
|
What is the difference between holding shares as a
stockholder of record and as a beneficial owner?
|
|
A.
|
If your shares of the Companys common stock are registered
directly in your name with our transfer agent, Computershare
Investor Services, you are considered, with respect to those
shares of the Companys common stock, the stockholder
of record. This proxy statement and your proxy card have
been sent directly to you by the Company.
|
If your shares of the Companys common stock are held
through a bank, broker, trustee or other nominee, you are
considered the beneficial owner of shares of the
Companys common stock held in street name. In
that case, this proxy statement has been forwarded to you by
your bank, broker, trustee or other nominee who is considered,
with respect to those shares of the Companys common stock,
the stockholder of record. As the beneficial owner, you have the
right to direct your bank, broker, trustee or other nominee how
to vote your shares of the Companys common stock by
following their instructions for voting.
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|
Q.
|
If my shares of the Companys common stock are held in
street name by my bank, broker, trustee or other
nominee, will my bank, broker, trustee or other nominee vote my
shares of the Companys common stock for me?
|
|
A.
|
Your bank, broker, trustee or other nominee will only be
permitted to vote your shares of the Companys common stock
if you instruct your bank, broker, trustee or other nominee how
to vote. You should follow the procedures provided by your bank,
broker, trustee or other nominee regarding the voting of your
shares of the Companys common stock. If you do not
instruct your bank, broker, trustee or other nominee to vote
your shares of the Companys common stock, your shares of
the Companys common stock will not be voted and the effect
will be the same as a vote AGAINST approval
of the proposal to adopt the merger agreement, and your shares
of the Companys common stock will not have an effect on
the proposal to adjourn the special meeting, regardless of
whether or not a quorum is present.
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14
|
|
Q.
|
How can I change or revoke my vote?
|
|
A.
|
You have the right to revoke a proxy, whether delivered over the
Internet, by telephone or by mail, at any time before it is
exercised, by voting again at a later date through any of the
methods available to you, by giving written notice of revocation
to our Corporate Secretary, which must be filed with the
Corporate Secretary by the time the special meeting begins, or
by voting by ballot at the special meeting. Attending the
special meeting, by itself, is not enough to revoke a proxy. If
you are a beneficial owner and wish to revoke your voting
instructions, you should follow the instructions provided by
your bank, broker, trustee or other nominee.
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|
Q.
|
What is a proxy?
|
|
A.
|
A proxy is your legal designation of another person, referred to
as a proxy, to vote your shares of stock. The
written document describing the matters to be considered and
voted on at the special meeting is called a proxy
statement. The document used to designate a proxy to vote
your shares of stock is called a proxy card. Our
board of directors has designated James Welch and Wayne Kern,
and each of them, with full power of substitution, as proxies
for the special meeting.
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|
Q.
|
If a stockholder gives a proxy, how are the shares of the
Companys common stock voted?
|
|
A.
|
Regardless of the method you choose to vote, the individuals
named on the enclosed proxy card, or your proxies, will vote
your shares of the Companys common stock in the way that
you indicate. When completing the Internet or telephone
processes or the proxy card, you may specify that your shares of
the Companys common stock be voted for or against, or
abstain from voting on, all, some or none of the specific items
of business to come before the special meeting.
|
If you properly sign your proxy card but do not mark the boxes
showing how your shares should be voted on a matter, the shares
represented by your properly signed proxy will be voted
FOR approval of the proposal to adopt the
merger agreement and FOR approval of the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies if there are
insufficient votes at the time of the special meeting to approve
the proposal to adopt the merger agreement.
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|
Q.
|
How are votes counted?
|
|
A.
|
For the proposal to adopt the merger agreement, you may vote
FOR, AGAINST, or
ABSTAIN. Abstentions and broker non-votes
will have the same effect as votes AGAINST
approval of the proposal to adopt the merger agreement.
|
For the proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies, you may vote
FOR, AGAINST, or
ABSTAIN. Assuming a quorum is present,
abstaining will not have an effect on the proposal to adjourn
the special meeting. If a quorum is not present, abstaining will
have the same effect as a vote AGAINST
approval of the proposal to adjourn the special meeting. Broker
non-votes will not have an effect on the proposal, regardless of
whether or not a quorum is present.
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|
Q.
|
Who will count the votes?
|
|
A.
|
A representative of our transfer agent, Computershare Investor
Services, will count the votes and act as an inspector of
election.
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|
Q.
|
What do I do if I receive more than one proxy or set of
voting instructions?
|
|
A.
|
If you hold shares of the Companys common stock in
street name through a bank, broker, trustee or other
nominee and also directly as a record holder or otherwise, you
may receive more than one proxy
and/or set
of voting instructions relating to the special meeting.
|
These should each be voted
and/or
returned separately in accordance with the instructions provided
in this proxy statement in order to ensure that all of your
shares of the Companys common stock are voted.
15
|
|
Q.
|
What happens if I sell my shares of the Companys common
stock before the special meeting?
|
|
A.
|
The record date for stockholders entitled to vote at the special
meeting is earlier than both the date of the special meeting and
the consummation of the merger. If you transfer your shares of
the Companys common stock after the record date but before
the special meeting, you will, unless special arrangements are
made, retain your right to vote at the special meeting but will
transfer the right to receive the merger consideration to the
person to whom you transfer your shares.
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|
Q.
|
What happens if I have lost my stock certificate(s)?
|
|
A.
|
You will be sent a letter of transmittal promptly after
completion of the merger describing the procedures that you must
follow if you cannot locate your stock certificate(s). This will
include an affidavit that you will need to sign attesting to the
loss of your certificate. You may also be required to provide a
bond in order to cover any potential loss.
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|
Q.
|
Who will solicit and pay the cost of soliciting proxies?
|
|
A.
|
The Company has engaged D.F. King & Co., Inc., our
proxy solicitor, to assist in the solicitation of proxies for
the special meeting. The Company estimates that it will pay D.F.
King & Co., Inc. a fee of approximately $10,000.00,
plus $5.00 for each call made to or received from stockholders
of the Company. The Company will reimburse D.F. King &
Co., Inc. for reasonable
out-of-pocket
expenses and will indemnify D.F. King & Co., Inc. and
its affiliates against certain claims, liabilities, losses,
damages and expenses. The Company may also reimburse banks,
brokers, trustees, nominees and other fiduciaries representing
beneficial owners of shares of the Companys common stock
for their expenses in forwarding soliciting materials to
beneficial owners of the Companys common stock and in
obtaining voting instructions from those owners. Our directors,
officers and employees may also solicit proxies by telephone, by
facsimile, by mail, on the Internet or in person. They will not
be paid any additional amounts for soliciting proxies.
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|
Q.
|
What do I need to do now?
|
|
A.
|
Even if you plan to attend the special meeting, after carefully
reading and considering the information contained in this proxy
statement, including the attached annexes, please vote promptly
to ensure that your shares are represented at the special
meeting. If you hold your shares of the Companys common
stock in your own name as the stockholder of record, please vote
your shares of the Companys common stock by completing,
signing, dating and returning the enclosed proxy card in the
accompanying pre-paid reply envelope, using the telephone number
printed on your proxy card, or using the Internet voting
instructions printed on your proxy card. If you decide to attend
the special meeting and vote in person, your vote by ballot will
revoke any proxy previously submitted. If you are a beneficial
owner, please refer to the instructions provided by your bank,
broker, trustee or other nominee to see which of the above
choices are available to you.
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|
Q.
|
Should I send in my stock certificates now?
|
|
A.
|
No. You will be sent a letter of transmittal promptly after
the completion of the merger describing how you may exchange
your shares of the Companys common stock for the per share
merger consideration. If your shares of the Companys
common stock are held in street name by your bank,
broker, trustee or other nominee, you will receive instructions
from your bank, broker, trustee or other nominee as to how to
effect the surrender of your street name shares of
the Companys common stock in exchange for the per share
merger consideration. Please do NOT return your stock
certificate(s) with your proxy.
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|
Q.
|
Am I entitled to exercise appraisal rights under the DGCL
instead of receiving the per share merger consideration for my
shares of the Companys common stock?
|
|
A.
|
Yes, provided that you comply with all applicable requirements
and procedures. As a holder of shares of the Companys
common stock, you are entitled to appraisal rights under the
DGCL in connection with the merger if you take certain actions
and meet certain conditions. See the section entitled
Appraisal Rights
|
16
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|
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beginning on page 72 of this proxy statement and the text
of the Delaware appraisal rights statute reproduced in its
entirety as Annex C to this proxy statement.
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|
Q.
|
Who can help answer my other questions?
|
|
A.
|
If you have additional questions about the merger, need
assistance in submitting your proxy or voting your shares of the
Companys common stock, or need additional copies of the
proxy statement or the enclosed proxy card, please contact D.F.
King & Co., Inc., by telephone toll-free at
888-887-0082
(banks, brokers, trustees or other nominees can call collect at
212-269-5550)
or by email at dynamex@dfking.com.
|
17
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement, and the documents to which we refer you in
this proxy statement, contain forward-looking statements that
involve numerous risks and uncertainties. The statements
contained in this proxy statement that are not purely historical
are forward-looking statements within the meaning of
Section 21E of the Exchange Act, including, without
limitation, statements regarding the expected benefits and
closing of the proposed transaction and the Companys
expectations, beliefs and intentions. All forward looking
statements included in this proxy statement are based on
information available to the Company on the date hereof. There
are forward-looking statements throughout this proxy statement,
including, without limitation, under the headings
Summary, Questions and Answers about the
Special Meeting and the Merger,
Proposal 1 The Merger,
Opinion of Stephens, Financial Advisor,
Financing of the Merger, Regulatory
Approvals, and Litigation Related to the
Merger. In some cases, you can identify forward-looking
statements by terminology such as may,
can, will, could,
expects, intends,
anticipates, believes,
estimates, predicts,
projects, or variations of such words, similar
expressions, or the negative of these terms or other comparable
terminology. No assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what impact they will have on
our results of operations or financial condition. Accordingly,
actual results may differ materially and adversely from those
expressed in any forward-looking statements. There are various
important factors that could cause actual results to differ
materially from those in any such forward-looking statements,
many of which are beyond our control. In addition to other
factors and matters contained or incorporated in this document,
these statements are subject to risks, uncertainties, and other
factors, including among others:
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|
|
the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement;
|
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|
|
the inability to complete the merger due to the failure to
obtain stockholder approval or the failure to satisfy other
conditions required for the consummation of the merger;
|
|
|
|
failure or delay in consummation of the transaction for other
reasons;
|
|
|
|
that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention
as a result of the merger;
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|
|
the effect of the announcement of the merger on our customer
relationships, operating results and business generally;
|
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|
|
the diversion of our managements attention from our
ongoing business concerns;
|
|
|
|
the outcome of any legal proceedings that have been or may be
instituted against the Company
and/or
others relating to the merger agreement or the Greenbriar merger
agreement;
|
|
|
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limitations placed on our ability to operate the business by the
merger agreement;
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|
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the amounts of the costs, fees, expenses and charges related to
the merger;
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changes in laws or regulations;
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|
|
changes in the financial or credit markets or economic
conditions generally;
|
and other risks as are mentioned in reports filed by the Company
with the SEC from time to time, including our most recent filing
on
Form 10-K.
See Where You Can Find More Information beginning on
page 80 of this proxy statement. We do not undertake any
obligation to publicly release any revision to any
forward-looking statements contained in this proxy statement to
reflect events, changes and circumstances occurring after the
date of this proxy statement or to reflect the occurrence of
unanticipated events. Caution should be taken that these factors
could cause the actual results to differ from those stated or
implied in this proxy statement.
18
PARTIES
TO THE MERGER
The
Company
Dynamex Inc..
5429 LBJ Freeway, Suite 1000
Dallas, Texas 75240
(214) 560-9000
Dynamex Inc., which we refer to as the Company, we or us, is a
Delaware corporation headquartered in Dallas, Texas. We are a
leading provider of
same-day
delivery and logistic services in the United States and Canada.
References to the Company, we or us in this proxy statement
include the Company and our subsidiaries on a consolidated
basis. For more information about the Company, please visit our
website at www.dynamex.com. Our website is provided as an
inactive textual reference only. The information provided on our
website is not part of this proxy statement, and therefore is
not incorporated by reference. See also Where You Can Find
More Information beginning on page 80. The
Companys common stock is publicly traded on the Nasdaq
Global Select Market under the symbol DDMX.
Parent
TransForce Inc.
8801 Trans-Canada Highway, Suite 500
Saint-Laurent (Quebec) H4S 1Z6
Canada
(514) 331-4200
TransForce Inc., which we refer to as Parent, is a Canadian
corporation headquartered in Montréal, Québec, Canada.
Parent is the leader in Canadas transportation and
logistics industry. Upon consummation of the proposed merger,
the Company will be an indirect wholly-owned subsidiary of
Parent. For more information about Parent, please visit their
website at www.transforce.ca. Parents website is provided
as an inactive textual reference only. The information provided
on Parents website is not part of this proxy statement,
and therefore is not incorporated by reference. Parents
shares are listed on the Toronto Stock Exchange under the symbol
TFI.
Merger
Sub
TransForce Acquisition Corp.
c/o TransForce
Inc.
8801 Trans-Canada Highway, Suite 500
Saint-Laurent (Quebec) H4S 1Z6
Canada
(514) 331-4200
TransForce Acquisition Corp., which we refer to as Merger Sub,
is a Delaware corporation that is an indirect wholly-owned
subsidiary of Parent and was organized solely for the purpose of
entering into the merger agreement and consummating the
transactions contemplated by the merger agreement. Merger Sub
has not conducted any activities to date other than activities
incidental to its formation and in connection with the
transactions contemplated by the merger agreement. Under the
terms of the merger agreement, Merger Sub will merge with and
into the Company, with the Company continuing as the surviving
corporation. Upon consummation of the proposed merger, Merger
Sub will cease to exist.
19
THE
SPECIAL MEETING
Time,
Place and Purpose of the Special Meeting
This proxy statement is being furnished to our stockholders as
part of the solicitation of proxies by the board of directors
for use at the special meeting to be held on
[ ],
2011 at
[ ] a.m.
local time, at the offices of the Company, 5429 LBJ Freeway,
Suite 900, Dallas, Texas, or at any adjournment or
postponement thereof. At the special meeting, holders of the
Companys common stock will be asked to approve the
proposal to adopt the merger agreement and to approve the
proposal to adjourn the special meeting, if necessary or
appropriate, for the purpose of soliciting additional proxies if
there are insufficient votes at the time of the special meeting
to approve the proposal to adopt the merger agreement.
Our stockholders must approve the proposal to adopt the merger
agreement in order for the merger to occur. If our stockholders
fail to adopt the merger agreement, the merger will not occur. A
copy of the merger agreement is attached as Annex A
to this proxy statement, which we encourage you to read
carefully in its entirety.
Record
Date and Quorum
We have fixed the close of business on
[ ],
20[ ]
as the record date for the special meeting, and only holders of
record of the Companys common stock on the record date are
entitled to vote at the special meeting. You are entitled to
receive notice of, and to vote at, the special meeting if you
owned shares of the Companys common stock at the close of
business on the record date. On the record date, there were
[ ] shares
of the Companys common stock outstanding and entitled to
vote. Each share of the Companys common stock entitles its
holder to one vote on all matters properly coming before the
special meeting.
A majority of the shares of the Companys common stock
outstanding at the close of business on the record date and
entitled to vote at the meeting, present in person or
represented by proxy, at the special meeting constitutes a
quorum for the purposes of the special meeting. Shares of the
Companys common stock represented at the special meeting
but not voted, including shares of the Companys common
stock for which a stockholder directs an abstention
from voting, as well as broker non-votes (as
described below), will be counted for purposes of establishing a
quorum. A quorum is necessary to transact business at the
special meeting. Once a share of the Companys common stock
is represented at the special meeting, it will be counted for
the purpose of determining a quorum at the special meeting and
any adjournment of the special meeting. However, if a new record
date is set for the adjourned special meeting, then a new quorum
will have to be established. In the event that a quorum is not
present at the special meeting, it is expected that the special
meeting will be adjourned or postponed to solicit additional
proxies.
Attendance
You are entitled to attend the special meeting only if you were
a holder of the Companys common stock as of the close of
business on
[ ],
20[ ],
which we refer to as the record date, or hold a valid proxy for
the special meeting. Since seating is limited, admission to the
special meeting will be on a first-come, first-served basis. You
should be prepared to present photo identification for
admittance. If you are not a stockholder of record but hold
shares through a bank, broker, trustee or other nominee (i.e.,
in street name), you should provide proof of
beneficial ownership as of the record date, such as your most
recent account statement prior to the record date, a copy of the
voting instruction card provided by your bank, broker, trustee
or other nominee, or similar evidence of ownership.
Vote
Required
The adoption of the merger agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of
the Companys common stock entitled to vote thereon. For
the proposal to adopt the merger agreement, you may vote
FOR, AGAINST, or
ABSTAIN. Abstentions will not be counted as
votes cast in favor of the proposal to adopt the merger
agreement, but will count for the purpose of
20
determining whether a quorum is present. If you fail to
submit a proxy or vote in person at the special meeting, or if
you abstain, or you do not provide your bank, broker, trustee or
other nominee with instructions, as applicable, it will have the
same effect as a vote AGAINST the proposal to adopt
the merger agreement.
If your shares of the Companys common stock are registered
directly in your name with our transfer agent, Computershare
Investor Services, you are considered, with respect to those
shares of the Companys common stock, the stockholder
of record. This proxy statement and proxy card have been
sent directly to you by the Company.
If your shares of the Companys common stock are held
through a through a bank, broker, trustee or other nominee, you
are considered the beneficial owner of shares of the
Companys common stock held in street name. In that case,
this proxy statement has been forwarded to you by your bank,
broker, trustee or other nominee who is considered, with respect
to those shares of the Companys common stock, the
stockholder of record. As the beneficial owner, you have the
right to direct your bank, broker, trustee or other nominee how
to vote your shares by following their instructions for voting.
Brokers who hold shares in street name for customers have the
authority to vote on routine proposals when they
have not received instructions from beneficial owners. However,
brokers are precluded from exercising their voting discretion
with respect to approving non-routine matters such as the
proposal to adopt the merger agreement and, as a result, absent
specific instructions from the beneficial owner of such shares
of the Companys common stock, brokers are not empowered to
vote those shares of the Companys common stock, which we
refer to generally as broker non-votes. These broker
non-votes will be counted for purposes of determining a quorum,
but will have the same effect as a vote AGAINST
approval of the proposal to adopt the merger agreement.
Assuming a quorum is present at the special meeting, the
proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies requires the vote of
a majority of the votes cast by stockholders present in person
or represented by proxy and entitled to vote at the special
meeting. If a quorum is not present at the special meeting,
approval of a proposal to adjourn the special meeting will
require the affirmative vote of the majority of shares present
in person or represented by proxy at the special meeting and
entitled to vote on the proposal.
For the proposal to adjourn the special meeting, if necessary or
appropriate, you may vote FOR,
AGAINST, or ABSTAIN.
Assuming a quorum is present, if your shares of the
Companys common stock are present at the special meeting
but are not voted on this proposal, or if you have given a proxy
and abstained on this proposal, or there are broker non-votes on
the issue, the shares of the Companys common stock not
voted will not be counted in respect of and will not have an
effect on, the proposal to adjourn the special meeting. Assuming
a quorum is not present, if your shares of the Companys
common stock are present at the special meeting but are not
voted on this proposal, or if you have given a proxy and
abstained on this proposal, this will have the same effect as if
you voted AGAINST the proposal; however, if
there are broker non-votes on the issue this will not have an
effect on, the proposal to adjourn the special meeting.
If you are a stockholder of record, you may have your shares of
the Companys common stock voted on matters presented at
the special meeting in any of the following ways:
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in person you may attend the special meeting and
cast your vote there;
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by proxy stockholders of record can choose to vote
by proxy by signing and dating the proxy card you receive and
returning it in the enclosed pre-paid reply envelope;
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over the Internet the website for Internet voting is
identified on your proxy card; or
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by using a toll-free telephone number noted on your proxy card.
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If you are a beneficial owner, you will receive instructions
from your bank, broker, trustee or other nominee that you must
follow in order to have your shares of the Companys common
stock voted. Those instructions will identify which of the above
choices are available to you in order to have your shares voted.
21
Please note that if you are a beneficial owner and wish to vote
in person at the special meeting, you must provide a legal proxy
from your bank, broker, trustee or other nominee.
A control number, located on your proxy card, is designed to
verify your identity and allow you to vote your shares of the
Companys common stock, and to confirm that your voting
instructions have been properly recorded, when voting over the
Internet or by telephone. Please be aware that if you vote over
the Internet, you may incur costs such as telephone and Internet
access charges for which you will be responsible.
Please refer to the instructions on your proxy or voting
instruction card to determine the deadlines for voting over the
Internet or by telephone. If you choose to vote by mailing a
proxy card, your proxy card must be received by the Corporate
Secretary of the Company by the time the special meeting begins.
Please do not send in your stock certificates with your proxy
card. When and if the merger is completed, a separate letter
of transmittal will be mailed to you that will enable you to
receive the per share merger consideration in exchange for your
stock certificates.
If you vote by proxy, regardless of the method you choose to
vote, the individuals named on the enclosed proxy card, and each
of them, with full power of substitution, or your proxies, will
vote your shares of the Companys common stock in the way
that you indicate. When completing the Internet or telephone
processes or the proxy card, you may specify whether your shares
of the Companys common stock should be voted for, against,
or to abstain from voting on all, some or none of the specific
items of business to come before the special meeting.
If you properly sign and submit your proxy card but do not mark
the boxes showing how your shares of the Companys common
stock should be voted on a matter, the shares of the
Companys common stock represented by your properly signed
proxy will be voted FOR approval of the
proposal to adopt the merger agreement and
FOR approval of the proposal to adjourn the
special meeting, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement.
If you have any questions or need assistance voting your shares,
please contact our proxy solicitor, D.F. King & Co.,
Inc., by telephone toll-free at
888-887-0082
(banks, brokers, trustees or other nominees can call collect at
212-269-5550)
or by email at dynamex@dfking.com.
IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF THE
COMPANYS COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE
ACCOMPANYING PRE-PAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY
TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL
MEETING MAY REVOKE THEIR PROXIES AND VOTE BY BALLOT AT THE
SPECIAL MEETING.
Proxies
and Revocation
Any stockholder of record entitled to vote at the special
meeting may submit a proxy by telephone, over the Internet, or
by returning the enclosed proxy card in the accompanying
pre-paid reply envelope, or may vote in person at the special
meeting. If your shares of the Companys common stock are
held in street name by your bank, broker, trustee or
other nominee, you should instruct your bank, broker, trustee or
other nominee on how to vote your shares of the Companys
common stock using the instructions provided by your bank,
broker, trustee or other nominee. If you fail to submit a proxy
or vote in person at the special meeting, or abstain, or you do
not provide your bank, broker, trustee or other nominee with
instructions, as applicable, your shares of the Companys
common stock will not be voted on the proposal to adopt the
merger agreement, which will have the same effect as a vote
AGAINST approval of the proposal to adopt the
merger agreement.
You have the right to revoke a proxy, whether delivered over the
Internet, by telephone or by mail, at any time before it is
exercised, by voting at a later date through any of the methods
available to you, by giving written notice of revocation to our
Corporate Secretary, which must be received by the Corporate
Secretary by
22
the time the special meeting begins, or by voting by ballot at
the special meeting. Attending the special meeting, by itself,
is not enough to revoke a proxy. If you are a beneficial owner
and wish to revoke your voting instructions, you should follow
the instructions provided by your bank, broker, trustee or other
nominee.
Adjournments
and Postponements
Although it is not currently expected, the special meeting may
be adjourned or postponed for the purpose of soliciting
additional proxies if there are insufficient votes at the time
of the special meeting to approve the proposal to adopt the
merger agreement. Other than an announcement to be made at the
special meeting of the time, date and place of an adjourned
meeting, any adjournment may be made without notice (if the
adjournment is not for more than 30 days and a new record
date has not been fixed). Any adjournment or postponement of the
special meeting for the purpose of soliciting additional proxies
will allow the Companys stockholders who have already sent
in their proxies to revoke them at any time prior to their use
at the special meeting as adjourned or postponed.
Anticipated
Date of Completion of the Merger
We are working towards completing the merger as soon as
possible. Assuming timely satisfaction or waiver of conditions
to the merger, we anticipate that the merger will be completed
in the first quarter of calendar 2011. If our stockholders vote
to approve the proposal to adopt the merger agreement, the
merger will become effective as promptly as practicable
following the satisfaction or waiver of the other conditions to
the merger. See the sections entitled The Merger
Agreement Closing and The Merger
Agreement Effective Time beginning on
page 56 of this proxy statement.
Rights of
Stockholders Who Seek Appraisal
Stockholders are entitled to appraisal rights under the DGCL in
connection with the merger. This means that you are entitled to
have the fair value of your shares of the Companys common
stock determined by the Delaware Court of Chancery and to
receive cash payment based on that valuation instead of
receiving the per share merger consideration. The ultimate
amount you receive in an appraisal proceeding may be less than,
equal to or more than the amount you would have received under
the merger agreement.
To exercise your appraisal rights, you must submit a written
demand for appraisal to the Company before the vote is taken on
the proposal to adopt the merger agreement and you must not vote
in favor of the proposal to adopt the merger agreement. Your
failure to follow exactly the procedures specified under the
DGCL may result in the loss of your appraisal rights. See the
section entitled Appraisal Rights beginning on
page 72 and the text of the Delaware appraisal rights
statute reproduced in its entirety as Annex C to
this proxy statement. If you hold your shares of the
Companys common stock through a bank, broker, trustee or
other nominee and you wish to exercise appraisal rights, you
should consult with your bank, broker, trustee or other nominee
to determine the appropriate procedures for the making of a
demand for appraisal by the nominee. In view of the complexity
of the procedures specified under the DGCL, stockholders who may
wish to pursue appraisal rights should consult their legal and
financial advisors.
Solicitation
of Proxies; Payment of Solicitation Expenses
The Company has engaged D.F. King & Co., Inc. to
assist in the solicitation of proxies for the special meeting.
The Company estimates that it will pay D.F. King &
Co., Inc. a fee of approximately $10,000.00, plus $5.00 per each
call made to or received from stockholders of the Company. The
Company will reimburse D.F. King & Co., Inc. for
reasonable
out-of-pocket
expenses and will indemnify D.F. King & Co., Inc. and
its affiliates against all losses, claims, damages, liabilities,
disbursements and reasonable
out-of-pocket
expenses. The Company may also reimburse banks, brokers,
trustees, nominees and other fiduciaries representing beneficial
owners of shares of the Companys common stock for their
expenses in forwarding soliciting materials to beneficial owners
of the Companys common stock and in obtaining voting
instructions from those
23
owners. Our directors, officers and employees may also solicit
proxies by telephone, by facsimile, by mail, on the Internet or
in person. They will not be paid any additional amounts for
soliciting proxies.
Questions
and Additional Information
If you have more questions about the merger or how to submit
your proxy, or if you need additional copies of this proxy
statement or the enclosed proxy card or voting instructions,
please contact our proxy solicitor, D.F. King & Co.,
Inc., by telephone toll-free at
888-887-0082
(banks, brokers, trustees or other nominees can call collect at
212-269-5550)
or by email at dynamex@dfking.com.
24
PROPOSAL 1
THE MERGER
This discussion of the merger is qualified in its entirety by
reference to the merger agreement, which is attached to this
proxy statement as Annex A. You should read the
entire merger agreement carefully as it is the legal document
that governs the merger.
The merger agreement provides that Merger Sub will merge with
and into the Company. The Company will be the surviving
corporation in the merger and will continue to do business
following the merger. As a result of the merger, the Company
will cease to be a publicly-traded company. You will not own any
shares of the capital stock of the surviving corporation.
Merger
Consideration
In the merger, each outstanding share of the Companys
common stock (other than shares of the Companys common
stock held by Parent or Merger Sub or shares of the
Companys common stock held by stockholders who have
properly demanded appraisal rights under the DGCL with respect
to such shares, if any, and common stock owned by the Company,
which we refer to collectively as the excluded shares) will be
converted into the right to receive the per share merger
consideration of $25.00 in cash, without interest, less any
applicable withholding taxes.
Background
of the Merger
As part of their ongoing activities, the Companys board of
directors and the Companys senior management have
regularly evaluated the Companys continuing business
operations and growth as an independent company, as well as
long-term strategic alternatives, including prospects for
mergers and acquisitions, each with a view towards maximizing
stockholder value. These evaluations consider all aspects of the
Companys business and its financial performance and
condition, including relations with the Companys principal
customers, its prospects for new business with existing
customers and business with new customers, and the potential
deployment of the Companys available cash and borrowing
capacity for potential acquisitions and working capital
requirements for organic growth.
During the Fall of 2009, the Company considered an acquisition
of another company within the Companys industry, and in
connection with that process explored a variety of options that
might be available to finance the acquisition. Among the options
considered was a potential investment in the Company. In
exploring this option, the Companys financial advisor,
Stephens Inc., which we refer to as Stephens, contacted six
private equity firms and the Company held discussions with four
of those private equity firms, one of which was Greenbriar.
At a meeting of the Companys board of directors, held on
November 5, 2009, Stephens, which had been engaged by the
Company pursuant to an engagement letter dated October 16,
2009 to act as financial advisor in connection with the proposed
acquisition, provided the board of directors with an overview of
indications of interest to provide equity financing that had
been received from two private equity firms, one of which was
Greenbriar. The board of directors concluded that the Company
should continue discussions with Greenbriar, and the Company
entered into a confidentiality agreement with Greenbriar on
November 10, 2009.
From mid-November until mid-December 2009, Greenbriar
participated in multiple discussions with the Companys
senior management regarding the Companys business and
financial strategy, those of the target and the prospects of the
combined operations. Greenbriar, the Companys senior
management and Stephens jointly participated in a management
presentation hosted by the target on November 12, 2009. The
Company submitted a non-binding indication of interest on
December 11, 2009, which included a source of financing
provided, in part, by Greenbriar. The Company was informed on
December 22, 2009 that the target was not willing to
further consider the Companys overtures in its sales
process.
On February 10, 2010, Mr. James Welch, a director and
the Companys Chief Executive Officer, met with a
representative of Greenbriar where Greenbriar expressed interest
in continuing a relationship with the Company despite the
discontinuance of the proposed acquisition of the target.
Greenbriar also expressed
25
interest in a potential investment in or acquisition of the
Company. Mr. Welch advised Greenbriar that he would inform
the board of directors of Greenbriars interest in the
Company.
On March 2, 2010, at a meeting of the board of directors,
Mr. Welch discussed his meeting with a representative from
Greenbriar and described Greenbriars interest to continue
a relationship with the Company
and/or its
interest in a possible investment in or acquisition of the
Company. The board of directors advised senior management to
(i) re-establish communications with Stephens to request
that Stephens provide the board of directors an analysis of the
value of the Company and (ii) arrange a meeting with
Greenbriar.
On March 29, 2010, certain members of the board of
directors and the Companys senior management had a meeting
with representatives from Stephens to discuss certain strategic
alternatives of the Company, including potential acquisitions
that could be pursued by the Company. On March 30, 2010,
certain members of the board of directors and the Companys
senior management met with representatives of Greenbriar and
Greenbriar expressed its interest in participating with the
Company in potential acquisitions by the Company and in the
possibility of Greenbriar acquiring the Company.
On April 5, 2010, a telephonic meeting of the board of
directors was held with certain of the Companys senior
management and a representative of Weil, Gotshal &
Manges LLP, the Companys special legal counsel, in
attendance. The representative from Weil provided an overview of
the board of directors duties and responsibilities in
respect of its consideration of any proposal received from a
third party to acquire the Company. Certain members of the board
of directors then provided a summary of their earlier meeting
with Greenbriar and the board of directors determined to allow
Greenbriar access for due diligence to determine the extent of
its interest in the Company.
On April 7, 2010, the Company entered into a
confidentiality agreement with Greenbriar in connection with
discussions regarding one or more alternatives to enhance the
Companys stockholder value.
On April 8, 2010, a telephone conference was held between
the Companys senior management and Greenbriar for the
purpose of outlining Greenbriars due diligence review.
During the month of April 2010, eight site visits were made by
Greenbriar
and/or its
consultants to Company locations, and between April 16,
2010 and June 2, 2010, the Companys senior management
provided additional financial and operational data, responded to
inquiries made by Greenbriar and participated in various
diligence meetings and telephone conferences with Greenbriar and
their advisors.
On April 29, 2010, certain of the Companys senior
management met with representatives of Stephens to discuss a
stand-alone acquisition strategy of the Company and on
May 1, 2010, the board of directors convened a telephonic
meeting to discuss the recent conversations with Greenbriar. At
that meeting, the board of directors determined to instruct
Stephens to complete a financial valuation of the Company,
including identifying potential incremental acquisitions that
might be available and otherwise would be consistent with the
Companys business strategy. At this meeting, the board of
directors also evaluated Greenbriars request to meet with
management of the Company. However, because the discussions were
still in the preliminary stages, the board of directors
determined to deny Greenbriars request, which
Mr. Welch subsequently communicated to Greenbriar.
On June 2, 2010, the board of directors convened a
telephonic meeting to discuss the status of the discussions with
Greenbriar. At this meeting, Mr. Welch and Mr. Ray
Schmitz, the Companys Chief Financial Officer, led the
board of directors through a discussion of the Companys
current financial performance, together with a summary of
alternate growth strategies for the Company over the next three
to five years, assuming varying levels of organic growth and
acquisition opportunities, and the challenges that the Company
would face in executing its strategy. Also at this meeting,
Stephens led a discussion of the analysis that they had provided
to the board of directors in advance of the meeting regarding
their views on the Companys potential organic growth and
acquisition strategies and the potential market reaction under
certain scenarios. Following Stephens presentation, and
discussion among the members of the board of directors, the
board of directors, in an executive session of the members of
the board of directors in which Mr. Welch was not present,
determined that the Company should not continue to pursue a
potential transaction with Greenbriar at
26
this time, and rather should focus managements time and
attention on aggressively pursuing its business strategy in the
near term. Mr. Welch then communicated this determination
to a representative of Greenbriar.
On June 9, 2010, Greenbriar submitted to Mr. Richard
McClelland, the Companys chairman of the board of
directors, an unsolicited, non-binding proposal to acquire the
Company for $20.00 per share of common stock, subject to the
satisfactory results of its due diligence, the negotiation of a
definitive merger agreement, and receipt by it of debt financing
for the proposed transaction.
On June 10, 2010, the board of directors convened a
telephonic meeting to discuss Greenbriars June 9 proposal.
The board of directors discussed the Greenbriar proposal, as
well as potential alternative courses of action for the Company
in the event that it decided not to pursue the transaction
proposed by Greenbriar. At the request of the board of
directors, representatives from Weil then provided an overview
of the board of directors duties and responsibilities in
respect of its consideration of Greenbriars proposal to
acquire the Company. The board of directors then went into
executive session and, after discussion, determined to adjourn
the meeting until June 15, 2010 to permit further
consideration of the Greenbriar proposal by each director.
On June 15, 2010, the board of directors reconvened in
executive session to discuss Greenbriars June 9, 2010
proposal. The board of directors discussed a draft response to
Greenbriars proposal, but decided to defer further
discussion on the topic until after Stephens could provide the
board of directors with additional information with regard to
the valuation of the Company. At this meeting the board of
directors created a special committee, which we refer to as the
special committee, comprised of Mr. Craig Lentzsch and
Mr. Steve Smiley, to review and evaluate, and if
applicable, participate in the negotiation of and make
recommendations to the board of directors with respect to, a
potential sale of the Company to Greenbriar. In appointing the
special committee, the board of directors determined that
neither Mr. Lentzsch nor Mr. Smiley had any
relationships with either the Company or Greenbriar that would
interfere with their consideration of a potential transaction.
By a letter dated June 17, 2010, the Company formally
engaged Stephens to serve as financial advisor to the board of
directors, and any of its committees as directed by the board of
directors, in connection with a possible sale transaction.
On June 22, 2010, the special committee participated in a
telephone conference with Greenbriar during which the special
committee requested that Greenbriar provide an outline of any
remaining due diligence that would be required in order for
Greenbriar to be able to complete a possible transaction with
the Company. The following day, Greenbriar submitted a letter to
the special committee outlining such remaining diligence.
From June 22, 2010 to June 29, 2010, the special
committee had several telephone conferences and meetings with
Weil and Stephens to discuss the contents of Greenbriars
diligence letter and to review an updated analysis of the
Companys valuation prepared by Stephens.
On June 29, 2010, the board of directors held a telephonic
meeting for the purpose of further considering Greenbriars
June 9 proposal, as well as a formal response to that proposal.
The special committee updated the board of directors on their
activities and communications since the June 15 meeting of the
board of directors. At this meeting, representatives of Stephens
led a discussion of the updated valuation materials that had
been prepared for the board of directors at the request of the
special committee. In addition, at the request of the board of
directors, representatives from Weil led the board of directors
through a discussion of the proposed due diligence process
outlined in Greenbriars June 23 letter, as well as the
contents of a potential response to Greenbriars proposal.
Following Stephens and Weils presentations, and
further discussion among the full board of directors, the
special committee recommended that the board of directors
authorize it to continue negotiations with Greenbriar with the
goal of seeking a higher price per share. The board of directors
unanimously authorized the special committee to continue
negotiations as recommended.
On June 30, 2010, the special committee had a telephone
conference with representatives of Greenbriar during which the
special committee informed Greenbriar that its offer of $20.00
per share of common stock was inadequate, and that the Company
would be willing to entertain discussions of a transaction at a
price per share that was more reflective of the value of the
Company. The special committee also denied Greenbriars
request to permit Greenbriars potential lenders to attend
meetings with the Companys management and to
27
extend exclusivity to Greenbriar until there was an agreement in
principle with respect to price and other material terms. The
special committee further agreed to facilitate meetings with
management so that Greenbriar could further consider its
valuation of the Company.
During the month of July 2010, Greenbriar submitted additional
due diligence requests to which the Company responded, and the
parties agreed upon a schedule for Greenbriars meeting
with the Companys senior management.
On July 14, 2010, representatives from Greenbriar met with
members of the Companys senior management, including
Mr. Welch, Mr. Schmitz and Maynard Skarka, the
Companys Chief Operating Officer. Stephens,
Mr. Smiley and Mr. Lentzsch attended the meeting as
well. The meetings with the Companys senior management
included discussions on sales and marketing strategy,
operations, the Companys independent contractor model and
the Companys financials.
On July 16, 2010, Greenbriar requested a telephonic
conference with the Company and Stephens to discuss its
valuation of the Company and the additional factors to consider
in determining whether to increase its proposed offer price.
On July 19, 2010, in advance of a call scheduled with
Greenbriar and Jefferies & Company, Inc.,
Greenbriars financial advisor, which we refer to as
Jefferies, for July 20, 2010, the special committee met by
telephone with representatives from Weil and Stephens to discuss
expectations with regard to Greenbriars response. At the
request of the special committee, Stephens presented to the
special committee updated valuation materials with respect to
the Company, which materials were discussed on the call among
the members of the special committee and Stephens.
On July 20, 2010, the special committee, Weil and Stephens
participated in a telephone conference with Greenbriar and
Jefferies to discuss Greenbriars and the Companys
views with regard to valuation, the parties respective
considerations in arriving at these valuations, and expectations
regarding process.
During the remainder of July 2010, certain members of the
Companys senior management, the special committee,
Stephens, Greenbriar and Jefferies continued to have discussions
regarding due diligence, including due diligence with respect to
the Companys customer relations.
On August 3, 2010, representatives from Greenbriar had a
telephone conference with the special committee to discuss the
terms of the non-binding proposal to acquire the Company that
Greenbriar planned to submit to the Company later in the day. As
discussed on the telephone conference with the special
committee, later on the day of August 3, 2010, Greenbriar
submitted a non-binding proposal to acquire the Company for
$21.00 per share of common stock. The proposal from Greenbriar
provided for (i) a 20 day go-shop period,
(ii) a
break-up fee
payable by the Company in the amount of 2% of the transaction
value (plus reimbursement of expenses) during the
go-shop period and 4% (plus reimbursement of
expenses) during the no-shop period and (iii) a reverse
break-up fee
payable by Greenbriar in the amount of 2.5% of the transaction
value if Greenbriar failed to close as a result of its debt
financing being unavailable at the closing. The proposal was
subject to confirmatory due diligence and negotiation of a
mutually satisfactory definitive merger agreement, in customary
form for private equity sponsored acquisitions of public
companies.
On August 5, 2010, the board of directors held a telephonic
meeting to discuss Greenbriars August 3, 2010
proposal. At this meeting, the special committee briefed the
board of directors with regard to its discussions with
Greenbriar and Stephens regarding valuation. In addition,
representatives from Weil provided the board of directors with
an overview of (i) the terms of the potential transaction
from a legal perspective, (ii) the process for moving
forward with a transaction should the board of directors choose
to do so and (iii) go-shop periods,
break-up
fees and reverse
break-up
fees for other comparable public transactions. Representatives
from Stephens made a presentation to the board of directors
regarding its view of Greenbriars modified proposal from a
financial perspective. Following discussion, the board of
directors unanimously instructed the special committee to
continue to negotiate with Greenbriar for a higher price per
share, which, after discussions with Weil and Stephens with
regard to the other terms included in Greenbriars
proposal, including the proposed
break-up fee
and reverse
break-up fee
amounts, the special committee communicated
28
to Greenbriar on August 10, 2010. Greenbriar indicated that
it would need to discuss the Companys response internally
and revert back.
On August 11, 2010, representatives from Stephens
participated in a telephone conference with representatives of
Jefferies to discuss valuation of the Company.
On August 12, 2010, Greenbriar and the special committee
participated in a telephone conference on which Greenbriar
indicated that its final and best offer for the Company would be
$21.25 per share, subject to confirmatory due diligence.
Greenbriar indicated on this call that, assuming the parties
could agree on valuation, an agreement could be reached on the
other principal terms and conditions that had been the subject
of the parties discussions namely, the length of the
go-shop period, the amount of the
break-up
fees and reverse
break-up
fees, and the circumstances under which the reverse
break-up fee
would be payable. The special committee indicated that it would
consider Greenbriars revised offer and revert to
Greenbriar after discussing the proposal with the board of
directors.
On August 17, 2010, in advance of a meeting of the board of
directors scheduled for later that morning, the special
committee met by telephone with representatives from Weil to
further discuss the valuation of the Company and
Greenbriars final offer.
On August 17, 2010, the board of directors met
telephonically to discuss Greenbriars final proposal. The
special committee summarized its discussions with Greenbriar
concerning its $21.25 per share proposal. After discussion, the
chairman of the board of directors solicited the opinion of each
member of the board of directors and from the members of
management present at the meeting as to the adequacy of
Greenbriars proposal and the transaction generally. The
board of directors then discussed the other material terms and
conditions contained in Greenbriars proposal, and changes
that would be required to those terms and conditions in the
event agreement could be reached on valuation, including
establishing a go-shop period of at least
40 days, reaching agreement on
break-up
fees payable by the Company in an amount not to exceed 2% of the
transaction value during the go-shop period and 3%
during the no-shop period (in each case without expense
reimbursement), and reaching agreement on reverse
break-up
fees payable by Greenbriar in the amount of 3.75% of the
transaction value in the event Greenbriar fails to close as a
result of its debt financing not being available and 6% in the
event Greenbriar fails to close and is in material breach of its
obligations under the agreement (including in the event it fails
to close notwithstanding that the debt financing is otherwise
available). Following an executive session of the board of
directors, during which the non-employee directors engaged in
further discussion of the Greenbriar proposal, Mr. Welch
re-joined the meeting and the board of directors unanimously
resolved to authorize the special committee to negotiate an
agreement for the acquisition of the Company by Greenbriar at a
price of $21.25 per share of common stock, subject to the
further review and approval of the board of directors.
On August 17, 2010, following the meeting of the board of
directors, the special committee participated in a telephone
conference with Greenbriar during which the special committee
stated that they would be willing to engage in discussions with
respect to a transaction with Greenbriar at price of $21.25 per
share, contingent on the parties coming to agreement on the
other terms, including agreement with regard to the scope of
Greenbriars remaining due diligence prior to the execution
of a merger agreement, the length of the go-shop
period and the amount of the
break-up
fees and reverse
break-up
fees payable pursuant to the transaction.
During the remainder of August 2010, the special committee and
Greenbriar held a series of telephone conferences during which
the parties discussed the material terms of an agreement, and on
August 24, 2010, the parties reached agreement in principle
with respect to (i) a go-shop period of
40 days, (ii) a
break-up fee
payable by the Company of 2% of the transaction value (with no
expense reimbursement) during the go-shop period and
3% (with no expense reimbursement) during the no-shop period and
(iii) a two-tiered reverse
break-up fee
payable by Greenbriar of 3.75% of the transaction value for a
failure to close as a result of Greenbriars debt financing
not being available at closing and 6% in the event Greenbriar
fails to close and is in material breach of its obligations
under the agreement (including in the event it fails to close
notwithstanding that the debt financing is otherwise available).
29
On August 25, 2010, the special committee convened a
telephone conference with Weil and Stephens to discuss next
steps for the transaction, including preparation and negotiation
of the merger agreement and related disclosure schedules. The
special committee also directed Stephens to establish an
electronic dataroom and populate it with the due diligence
materials that would be required by Greenbriar and any other
potential bidder that may participate in the go-shop
process.
On August 26, 2010, representatives from the Company,
Stephens, Weil, Greenbriar and Hughes Hubbard & Reed
LLP, counsel to Greenbriar, participated in a telephone
conference on which Greenbriar requested that the Company grant
to Greenbriar a
30-day
period of exclusivity during which the Company would negotiate
exclusively with Greenbriar, and late in the day on
August 27, 2010, the Company entered into an exclusivity
agreement with Greenbriar that provided for exclusive
negotiations until September 27, 2010, subject to a
fiduciary out for unsolicited bona fide transaction
proposals received by the Company.
Commencing August 27, 2010 and continuing through
October 1, 2010, the Company, with the assistance from
representatives of Stephens and Weil, populated an electronic
data room to provide due diligence information to Greenbriar and
its representatives, and, on August 27, 2010, Greenbriar
and its representatives were provided access to the data room.
On September 1, 2010, Weil distributed an initial draft of
the merger agreement with affiliates of Greenbriar, or the
Greenbriar merger agreement, to Hughes Hubbard. Also on
September 1, 2010, representatives from Greenbriar met with
members of the Companys management and representatives of
Stephens in Dallas, Texas to prepare for a meeting to be held
the following day in the Dallas offices of Weil with potential
lenders to Greenbriar.
On September 2, 2010, representatives from Greenbriar held
a meeting for potential lenders to Greenbriar in respect of the
proposed transaction at the Dallas offices of Weil. Members of
the Companys management attended and made presentations to
the prospective lenders at the meeting. Representatives from
Stephens and Weil were also in attendance and Mr. Smiley
and Mr. McClelland participated by telephone conference.
Following the lender presentation, certain of the lenders,
representatives from Greenbriar and Stephens and members of the
Companys management visited one of the Companys
business centers in Dallas.
On September 6, 2010, Hughes Hubbard sent a revised draft
of the Greenbriar merger agreement to Weil.
On September 7, 2010, members of the Companys
management participated in a due diligence meeting with
representatives from Greenbriar, Ernst & Young,
Greenbriars accountants, and Stephens at the offices of
Stephens in Dallas, Texas. Members of the Companys
management also participated in a due diligence meeting relating
to the Companys information technology systems with
Ernst & Young and representatives from Greenbriar.
Additionally, on September 7, 2010, Weil distributed a
draft of the limited guarantee, as referred to in the Greenbriar
merger agreement, to Hughes Hubbard.
On September 8, 2010, members of the Companys
management participated in telephone conferences regarding
(i) tax and employee benefits diligence with
representatives from Ernst & Young and
(ii) insurance diligence with representatives from
Marsh & McLennan Companies, Greenbriars
insurance advisors.
On September 9, 2010, members of the Companys
management and Mr. Lentzsch participated in a meeting with
representatives from Scopelitis, Garvin, Light,
Hanson & Feary, special legal counsel to Greenbriar,
to discuss the Companys independent contractor model.
Representatives from Greenbriar were also present at the
meeting. Additionally, during the afternoon of September 9,
2010, Weil had a telephone conference with Hughes Hubbard to
discuss the draft Greenbriar merger agreement distributed by
Hughes Hubbard on September 6, 2010. Immediately after the
telephone conference, Weil updated the special committee on the
results of the negotiations. During the evening of
September 9, 2010, Weil distributed a revised draft of the
Greenbriar merger agreement to Hughes Hubbard.
From September 9, 2010 until September 29, 2010, the
Company participated in various
follow-up
due diligence meetings and telephone conferences with
representatives of Greenbriar, Hughes Hubbard and other
Greenbriar advisors.
30
On September 10, 2010, representatives from Greenbriar held
a meeting for potential lenders to Greenbriar in respect of the
transaction with the Company at the offices of Weil in Dallas,
Texas. Members of the Companys senior management attended
and presented at the meeting. Mr. Lentzsch and
representatives from Stephens and Weil were also in attendance,
and Mr. Smiley participated by telephone conference.
Following the lender presentation, certain of the lenders,
representatives from Greenbriar and Stephens and members of the
Companys management visited one of the Companys
business centers in Dallas.
On September 15, 2010, representatives from Weil and Hughes
Hubbard had a telephone conference to discuss outstanding issues
on the Greenbriar merger agreement, the status of due diligence
and the limited guarantee. From that day until the Greenbriar
merger agreement and related transaction documents were executed
on the afternoon of October 1, 2010, the parties and their
respective representatives negotiated the terms of the
definitive documents (including, without limitation, the
Greenbriar merger agreement, disclosure schedules, limited
guarantees and debt and equity commitment letters) and exchanged
drafts of such definitive documents. Significant issues
discussed included, but were not limited to, the conditions to
closing of the Greenbriar merger agreement, the circumstances
under which the termination fees would be payable, the
definition of superior proposal, the definition of material
adverse effect and restrictions on the Companys ability to
engage in certain activities between signing and closing. During
the same period, representatives of Greenbriar continued their
due diligence investigation of the Company.
On September 17, 2010, the special committee had a
telephone conference with Weil and Stephens to discuss the
material open issues of the Greenbriar merger agreement, which
included, among other items, the termination provisions of the
Greenbriar merger agreement, the definition of material adverse
effect and superior proposal and the restrictions on the
Companys ability to engage in certain activities between
signing and closing.
On September 21, 2010, Hughes Hubbard distributed a revised
draft of the Greenbriar merger agreement and a list of open
material issues to Weil.
On September 22, 2010, the special committee convened a
meeting with representatives from Weil to discuss open issues in
the Greenbriar merger agreement and regarding the proposed
transaction generally.
On September 23, 2010, Mr. Welch met in New York with
certain representatives from Greenbriar to discuss the business
and opportunities of the Company.
On the morning of September 24, 2010, the special committee
had a telephone conference with representatives from Greenbriar
to discuss open issues remaining in the Greenbriar merger
agreement. After discussion, the special committee and
Greenbriar agreed to reconvene the meeting in the afternoon to
revisit the remaining open issues. At 12:00 p.m. Central
Time on September 24, 2010, the special committee held a
telephone conference with representatives from Weil and Stephens
to discuss the resolution of certain open issues on the
Greenbriar merger agreement and to discuss the remaining open
issues. At 4:00 p.m. Central Time on September 24,
2010, the special committee had another telephone conference
with representatives from Greenbriar to discuss and resolve
additional open issues in the Greenbriar merger agreement.
Immediately after the meeting with Greenbriar concluded, the
special committee held another telephone conference with
representatives from Weil to discuss the resolution of open
issues discussed with representatives from Greenbriar. Following
the meeting, a draft of the Greenbriar merger agreement
incorporating the discussions between the special committee and
representatives from Greenbriar was delivered to Hughes Hubbard
by Weil.
On September 24, 2010 and on September 25, 2010,
Hughes Hubbard delivered drafts of the debt commitment letter
and equity commitment letters to Weil.
All parties to the transaction worked through the weekend of
September 25 and 26, 2010 to negotiate and finalize the
Greenbriar merger agreement, the limited guarantees, the debt
commitment letter, the equity commitment letters and related
transaction documents, including several extended telephone
conversations and negotiations during this period.
At 4:00 pm Central Time on September 26, 2010,
representatives from Weil had a telephone conference with
representatives from Hughes Hubbard to discuss the last
remaining issues concerning the Greenbriar
31
merger agreement and the disclosure schedules to the Greenbriar
merger agreement. Immediately after the telephone conference,
representatives from Weil updated the special committee on the
outstanding issues, which primarily related to the closing
conditions in the Greenbriar merger agreement. The special
committee concluded that it would call a full meeting of the
board of directors the following morning to determine its course
of action regarding the remaining issues.
On September 27, 2010, the board of directors convened a
telephonic meeting at which the special committee provided the
board of directors with an update on the status of the
transaction generally, and certain issues that had arisen in the
Greenbriar merger agreement negotiations, the disclosure
schedules, and the terms of the debt commitment letter and
equity commitment letters. At this meeting, the board of
directors, on recommendation of the special committee,
authorized the special committee to provide Greenbriar until the
end of the day on Friday, October 1, 2010, to finalize its
due diligence and come to agreement on all remaining issues. The
board of directors also determined not to formally extend
Greenbriars
30-day
exclusivity period, which was set to expire at 11:59 p.m.
Eastern Time on September 27, 2010.
The special committee, Weil, Greenbriar and Hughes Hubbard
negotiated and finalized the terms of the Greenbriar merger
agreement, disclosure schedules, the debt commitment letter, the
equity commitment letters, the limited guarantees and other
transaction documents, and on October 1, 2010, the board of
directors and its legal and financial advisors met to review the
proposed Greenbriar merger agreement. The special committee
discussed the process it had undertaken to negotiate a
transaction with Greenbriar, including the Greenbriar merger
agreement and other definitive documents. Representatives from
Weil reviewed with the board of directors its fiduciary duties,
the terms of the Greenbriar merger agreement, the terms of the
debt commitment letter, the terms of the equity commitment
letters and the terms of the limited guarantees. The board of
directors asked questions of Weil throughout its presentation.
Representatives from Stephens presented the board of directors
with its financial analyses of the proposed transaction with
Greenbriar. The board of directors asked questions throughout
the presentation. Stephens then delivered the board of directors
its opinion that, as of October 1, 2010, and based upon and
subject to the factors and assumptions set forth in such
opinion, the $21.25 per share in cash to be received by the
holders of outstanding shares of the Companys common stock
pursuant to the Greenbriar merger agreement was fair from a
financial point of view to the Companys public
stockholders. The members of the special committee unanimously
recommended to the board of directors that it approve the
Greenbriar merger agreement and the merger with an affiliate of
Greenbriar. The board of directors then voted unanimously to
approve the Greenbriar merger agreement and the merger with an
affiliate of Greenbriar on the terms set forth therein.
Immediately after the conclusion of the board meeting on
October 1, 2010, DashNow Holding Corp., DashNow Acquisition
Corp. and the Company executed the Greenbriar merger agreement
and the Company and Greenbriar issued a joint press release
announcing the execution of the Greenbriar merger agreement.
The Greenbriar merger agreement provided that, until
12:01 p.m., New York City time, on November 10, 2010,
the Company would be allowed to initiate, solicit and encourage
takeover proposals from third parties and to provide non-public
information and participate in discussions and negotiate with
third parties with respect to takeover proposals. At the
direction of the board of directors, Stephens conducted this
go-shop process on behalf of the Company.
Beginning on October 1, 2010, pursuant to the
go-shop provision of the Greenbriar merger
agreement, representatives of Stephens began contacting
potential buyers that were believed to be capable of, and might
be interested in, consummating an acquisition of the Company at
a price greater than $21.25 per share. Representatives of
Stephens contacted 129 separate parties, including 38 potential
strategic buyers, one of which was Parent, and 91 potential
financial buyers. Of the 129 parties contacted, 7 parties (of
which 1 was a potential strategic buyer and 6 were potential
financial buyers), including Parent, entered into
confidentiality agreements and were given access to confidential
information regarding the Company.
During the go-shop period, the Company and its
representatives continued to work to consummate the transactions
contemplated by the Greenbriar merger agreement in light of the
uncertain outcome of the go-shop process and as
required by the Greenbriar merger agreement. Among the actions
taken by the Company
32
and its representatives in connection with the Greenbriar merger
agreement, the Company filed for and received antitrust
clearance under the HSR Act and prepared and filed a preliminary
proxy statement with the SEC.
During the go-shop period, the special committee
periodically met with representatives from Stephens and Weil for
updates on the activities of the Companys representatives
related to the go-shop process.
On November 3, 2010 members of Parents management met
with a member of the special committee and members of the
Companys senior management in Dallas, Texas and discussed
various diligence matters. Representatives from Weil and
Stephens were present at the meeting.
On November 9, 2010, prior to the end of the
go-shop period, Parent submitted a written,
non-binding indication of interest regarding a potential
acquisition of the Company, which stated that Parent was
prepared to acquire the Company at a price per share of $23.50
in cash. Later in the day on November 9, 2010, a telephonic
meeting of the board of directors was held. Certain of the
Companys senior management and representatives of Weil and
Stephens were in attendance. At the meeting, the board of
directors resolved to designate Parent as an excluded
party as such term is defined in the Greenbriar merger
agreement.
On November 10, 2010, the Company sent a notice to
Greenbriar notifying it that Parent had submitted a written
takeover proposal as such term is defined in the
merger agreement and that the board of directors had designated
Parent as an excluded party and intended to continue
to engage in discussions and negotiations with Parent with
respect to the takeover proposal beyond the conclusion of the
go-shop period. The notice included copies of all
written materials provided by Parent (including a copy of the
takeover proposal submitted by Parent) and a summary of the
reasons for determining that Parent was an excluded
party.
Commencing on November 10, 2010 and continuing until
November 22, 2010, representatives from Parent continued
their due diligence investigation of the Company and the special
committee and the Companys advisors participated in
various diligence meetings and telephone conferences with Parent
and its advisors.
On November 16, 2010, Morgan, Lewis & Bockius
LLP, United States legal counsel to Parent, which we refer to as
Parents U.S. legal counsel, sent Weil an initial
draft of a merger agreement, which we refer to as the merger
agreement, which was based on the Greenbriar merger agreement
except that it revised or added certain provisions, including,
among other things, (i) increasing the merger consideration
to be received by the Companys stockholders to $23.50 per
share, (ii) eliminating the reverse
break-up
fee, (iii) providing the Company with the right of specific
performance under certain circumstances and (iv) including
language pursuant to which Parent agreed to dispose of, hold
separate or divest itself of all or any portion of its business
or assets in order to eliminate any impediment to closing the
merger transaction with respect to laws relating to competition
and restrictive trade practices.
On November 17, 2010, the Company sent the merger agreement
to Greenbriar and Hughes Hubbard as required by the Greenbriar
merger agreement.
On November 18, 2010, Weil had a telephone conference with
the special committee regarding the draft merger agreement.
Later that day, Weil sent a revised draft of the merger
agreement to Parents U.S. legal counsel. The revised
draft included a provision that the Company may seek damages
from Parent that may include the loss of premium to the
Companys stockholders.
On November 22, 2010, Parent delivered a formal binding
offer, which we refer to as the Formal Proposal, for the
acquisition of all of the outstanding shares of the Company in a
merger transaction in which the Companys stockholders
would receive $23.50 in cash per share of the Companys
common stock on the terms set forth in the draft merger
agreement sent by Parents U.S. legal counsel on
November 16, 2010 to Weil, which included substantially all
of the changes set forth in the revised draft sent by Weil on
November 18, 2010. The Formal Proposal included a copy of
the merger agreement which was fully executed by all parties
other than the Company and provided that it would remain open
until 6:00 p.m. New York City time on December 1, 2010.
33
On November 23, 2010, a telephonic meeting of the board of
directors was held at which the board of directors determined
that the Formal Proposal constituted a superior
proposal as such term is defined in the Greenbriar merger
agreement. Also on November 23, 2010, the Company sent a
notice to Greenbriar notifying it that the board of directors
had determined that the Formal Proposal constituted a
superior proposal and that the four business day
period had commenced during which the Company would be required
to negotiate with Greenbriar to enable Greenbriar to revise the
terms of the Greenbriar merger agreement and related agreements
such that the Formal Proposal would no longer constitute a
superior proposal. Included with the notice was a
copy of the Formal Proposal.
On November 26, 2010, Greenbriar delivered a proposed
amendment to the Greenbriar merger agreement that, among other
things, increased the merger consideration to be received by the
Companys stockholders to $23.50 per share. Greenbriar also
submitted revised equity commitment letters, which included
increased equity commitments from affiliates of Greenbriar, and
revised limited guarantees.
Commencing on November 26, 2010 and continuing until
November 28, 2010, the Company and Greenbriar and their
respective representatives negotiated the terms of the amendment
to the Greenbriar merger agreement, the revised equity
commitment letters and the limited guarantees. During this time
period, the members of the special committee and the
Companys advisors participated in numerous telephone
conferences.
On the afternoon of November 29, 2010, Parent submitted a
revised formal binding offer (including a copy of the merger
agreement, which was fully executed by all parties other than
the Company), which we refer to as the Revised Formal Proposal,
for the acquisition of all of the outstanding shares of the
Company in a merger transaction in which the Companys
stockholders would receive $24.00 in cash per share of the
Companys common stock. The Revised Formal Proposal
indicated that it would remain open until 11:59 p.m. New
York City time on December 6, 2010. Also on
November 29, 2010, the Company sent a notice to Greenbriar
notifying Greenbriar that the Company had received the Revised
Formal Proposal and that a new four business day period had
commenced during which the Company would be required to
negotiate with Greenbriar to enable it to further revise the
terms of the Greenbriar merger agreement (including the proposed
amendment to the Greenbriar merger agreement) and related
agreements such that the Revised Formal Proposal would no longer
constitute a superior proposal. Included with the
notice was a copy of the Revised Formal Proposal.
On November 30, 2010, Greenbriar submitted a revised
amendment to the Greenbriar merger agreement that, among other
things, increased the merger consideration to be received by the
Companys stockholders to $24.00 per share, increased the
termination fee payable by the Company to $7.7 million,
increased the reverse
break-up fee
payable by affiliates of Greenbriar if the merger fails to close
because the debt financing is unavailable to $14.3 million,
increased the reverse
break-up fee
payable by affiliates of Greenbriar if the Greenbriar merger
agreement is terminated as the result of Greenbriars
material breach to $21.4 million and provided the Company
the right of specific performance under certain circumstances,
which together with the Greenbriar merger agreement we refer to
as the Revised Greenbriar Proposal. Greenbriar also submitted
revised equity commitment letters, which included increased
equity commitments up to $175 million from affiliates of
Greenbriar, and amended and restated limited guarantees. Later
in the morning on November 30, 2010, the board of directors
and its legal and financial advisors held a telephonic meeting
to review the Revised Greenbriar Proposal and the Revised Formal
Proposal. Weil and the special committee discussed the process
they had undertaken in respect of the two proposals, including
the negotiations with Greenbriar with respect to the Revised
Greenbriar Proposal. The board of directors considered whether,
in light of the Revised Greenbriar Proposal, the Revised Formal
Proposal continued to constitute a superior
proposal. The board of directors considered the terms and
conditions of the Revised Greenbriar Proposal and the Revised
Formal Proposal as well as the relative risks associated with
each and concluded that the Revised Formal Proposal no longer
constituted a superior proposal. The factors
considered by the board of directors included, among other
things, the estimated time required to consummate each proposal
and the relative certainty and timing of closing, taking into
account requisite remaining regulatory approvals and the status
of DashNow Holding Corp.s debt financing. Representatives
from Stephens then delivered to the board of directors its oral
opinion that, based upon and subject to the factors and
assumptions set forth in a written opinion to be delivered to
the
34
board of directors after the meeting, the $24.00 per share in
cash to be received by the holders of outstanding shares of the
Companys common stock pursuant to the Revised Greenbriar
Proposal was fair from a financial point of view to the
Companys public stockholders. The members of the special
committee unanimously recommended to the board of directors that
it approve the revised amendment to the Greenbriar merger
agreement. The board of directors then voted unanimously to
approve the revised amendment to the Greenbriar merger agreement
on the terms set forth therein.
Later in the day on November 30, 2010, DashNow Holding
Corp., DashNow Acquisition Corp. and the Company executed the
revised amendment to the Greenbriar merger agreement (which, as
amended, we continue to refer to as the Greenbriar merger
agreement), and the Company issued a press release announcing
the execution of the revised amendment to the Greenbriar merger
agreement.
On December 6, 2010, Parent delivered a new formal binding
offer, which we refer to as the Final Proposal, for the
acquisition of all of the outstanding shares of the Company in a
merger transaction in which the Companys stockholders
would receive $25.00 in cash per share of the Companys
common stock. The Final Proposal included a copy of the merger
agreement which was fully executed by all parties other than the
Company and provided that it would remain open until
11:59 p.m. New York City time on December 13, 2010.
On December 7, 2010, a telephonic meeting of the board of
directors was held at which the board of directors determined
that the Final Proposal constituted a superior
proposal as such term is defined in the Greenbriar merger
agreement. Immediately after the board meeting and at the
request of the Company, Parent revised its Final Proposal to
provide that it would remain open until 11:59 a.m. New
York City time on December 14, 2010. Also on
December 7, 2010, the Company sent a notice to Greenbriar
notifying it that the board of directors had determined that the
Final Proposal constituted a superior proposal and
that the four business day period had commenced during which the
Company would be required to negotiate with Greenbriar to enable
Greenbriar to revise the terms of the Greenbriar merger
agreement and related agreements such that the Final Proposal
would no longer constitute a superior proposal.
Included with the notice was a copy of the Final Proposal.
On December 13, 2010, Greenbriar informed the Company that
it would not be increasing the merger consideration under the
Greenbriar merger agreement or making any other changes to the
Greenbriar merger agreement.
On the morning of December 14, 2010, the board of directors
and its legal and financial advisors held a telephonic meeting
to review the Final Proposal. The board of directors unanimously
determined that the Final Proposal continued to constitute a
superior proposal as compared to the terms of the
Greenbriar merger agreement. Representatives from Stephens
presented the board of directors with its financial analyses of
the proposed transaction with Parent. Stephens then delivered
the board of directors its opinion that, as of December 14,
2010, and, based upon and subject to the factors and assumptions
set forth in such opinion, the $25.00 per share in cash to be
received by the holders of outstanding shares of the
Companys common stock pursuant to the TransForce merger
agreement was fair from a financial point of view to the
Companys public stockholders. The full text of the written
opinion of Stephens, dated December 14, 2010, which sets
forth the assumptions made, matters considered and limitations
on the review undertaken in connection with the opinion, is
attached as Annex B to this proxy statement. The
members of the special committee unanimously recommended to the
board of directors that it approve the merger with TransForce,
the TransForce merger agreement and the termination of the
Greenbriar merger agreement. The board of directors then voted
unanimously to approve the merger and the TransForce merger
agreement on the terms set forth therein and the termination of
the Greenbriar merger agreement.
Later in the day on December 14, 2010, the Company sent
notice to Greenbriar terminating the Greenbriar merger agreement
and paid the termination fee to DashNow Holding Corp. in the
amount of $7,729,106. Concurrently with the termination of the
Greenbriar merger agreement, the Company executed the TransForce
merger agreement, which had been executed by Parent and Merger
Sub at the time of its delivery of the Final Proposal.
Thereafter, the Company issued a press release announcing the
merger, the execution of TransForce merger agreement and the
termination of the Greenbriar merger agreement.
35
Reasons
for the Merger; Recommendation of the Board of
Directors
Special
Committee
The special committee, consisting solely of non-employee
independent directors and acting with the advice and assistance
of the Companys legal and financial advisors, evaluated
and negotiated the acquisition proposal by Parent, including the
terms and conditions of the merger agreement. The special
committee determined that the TransForce merger agreement is
superior to the Greenbriar merger agreement and the merger is
fair to and in the best interests of the Company and its
stockholders, approved and declared it advisable to enter into
the merger agreement and unanimously recommended that the board
of directors (i) approve the execution, delivery and
performance of the merger agreement and the transactions
contemplated by the merger agreement, including the merger, and
(ii) resolve to recommend that the stockholders of the
Company adopt the merger agreement and the transactions
contemplated by the merger agreement, including the merger.
In the course of reaching its determination, the special
committee considered the following factors and potential
benefits of the merger, each of which the members of the special
committee believed supported its decision:
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the current and historical market prices of the Companys
common stock and the fact that the price of $25.00 per share of
the Companys common stock represented a premium of
approximately 63% to the closing price of the Companys
common stock on October 1, 2010, the last trading day prior
to the public announcement of the Greenbriar merger agreement, a
premium of approximately 86.3% to the average price for the 30
trading days prior to October 1, 2010, a premium of
approximately 17.6% over the consideration provided by the
initial Greenbriar merger agreement and a premium of
approximately 4.17% over the consideration provided by the
amended Greenbriar merger agreement;
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at no time in the twenty-two months prior to the execution and
announcement of the Greenbriar merger agreement had the market
price for the Companys common stock equaled or exceeded
$25.00 per share;
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the prospect that the following factors negatively affecting the
Companys stock price would continue to negatively affect
the Companys stock price in the future:
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inconsistent earnings performance as compared to the
Companys and analysts projections;
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the Companys financial performance, including revenue
growth and earnings per share, will likely remain consistent
with the performance of the transportation sector in general,
which will remain negatively impacted by sluggish economic
growth;
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°
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coverage by only five industry analysts;
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°
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a low market capitalization relative to its publicly-traded peer
group; and
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°
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given the Companys size, the costs of being a public
company outweighing the benefits of being a public company;
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the special committees understanding of the business,
operations, financial condition, earnings and prospects of the
Company, including the prospects of the Company on a stand-alone
basis including:
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°
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the execution of an organic growth strategy based on increasing
the size of the sales force, improved training for the sales
force and focus on key industries;
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°
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the possible execution of an acquisition strategy with its
attendant execution and operational risks; and
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°
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unusual or non-recurring changes to historic operations that may
not occur in future operations;
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the possible alternatives to the sale of the Company, including
continuing to operate the Company on a stand-alone basis, and
the significant risks and uncertainties associated with such
alternatives, including the risks associated with the
Companys ability to meet its projections for future
results of operations,
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36
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compared to the certainty of realizing in cash a fair value for
the Companys stockholders through the merger;
|
the terms of the merger agreement and the related
agreements, including:
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°
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the limited number and nature of the conditions to Parents
obligation to consummate the merger;
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°
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the Companys ability, under certain circumstances
specified in the merger agreement, at any time prior to the time
the Company stockholders adopt the merger agreement, to consider
and respond to written takeover proposals or provide non-public
information to or engage in discussions or negotiations with the
person making such proposals if the board of directors, prior to
taking any such actions, determines in good faith after
consultation with financial advisors and legal counsel that
(i) failure to take action would violate the
directors fiduciary duties to the Companys
stockholders and (ii) the takeover proposal either
constitutes a superior proposal or could reasonably be expected
to result in a superior proposal;
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°
|
the Companys ability, under certain circumstances
specified in the merger agreement, to terminate the merger
agreement in order to accept a superior proposal, subject to
paying Parent a termination fee of approximately
$7.7 million;
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°
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the board of directors ability, under certain
circumstances specified in the merger agreement, to withhold,
withdraw, qualify or modify its recommendation that the
Companys stockholders vote to adopt the merger agreement,
subject to Parents subsequent right to terminate the
merger agreement and the Companys subsequent obligation to
pay a termination fee of approximately $7.7 million;
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°
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the fact that the merger agreement provides that the Company may
seek specific performance to require Parent and Merger Sub to
complete the merger and permits the Company to seek as damages
the lost economic benefit of the transactions contemplated by
the merger agreement to the Companys stockholders and
option holders rather than limiting damages to the amount of the
termination fee;
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°
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the fact that the consummation of the merger is not conditioned
on Parents ability to secure debt financing or equity
financing in order to pay the merger consideration; and
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°
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the fact that the termination date of May 31, 2011 under
the merger agreement allows for sufficient time to complete the
merger;
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the fact that the merger consideration is all cash, allowing the
Companys stockholders to immediately realize a fair value
for their investment, while also providing the stockholders
certainty of value for their shares of the Companys common
stock, while avoiding long-term business risk;
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the financial presentation of Stephens, including its written
opinion to the board of directors dated December 14, 2010,
to the effect that, as of that date and based upon and subject
to the factors and assumptions set forth in the opinion, the
$25.00 per share in cash to be received by the holders of
outstanding shares of the Companys common stock pursuant
to the merger agreement was fair from a financial point of view
to the Companys public stockholders (see the section
entitled Opinion of Stephens, Financial Advisor,
beginning on page 40);
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the availability of appraisal rights to holders of the
Companys common stock who comply with all of the required
procedures under the DGCL, which allows holders of the
Companys common stock to seek appraisal of the fair value
of their shares as determined by the Delaware Court of Chancery
and to receive cash payment based on that valuation instead of
receiving the per share merger consideration provided under the
merger agreement;
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the fact that, for six months following the closing of the
merger, the surviving corporation will provide employees of the
Company and its subsidiaries during their employment with the
same level of base salary in effect on the date of the closing
of the merger and employee benefit plans and arrangements, other
than equity-based plans, that are no less favorable, in the
aggregate, than similar employee benefit plans and arrangements
provided by the Company and its subsidiaries prior to the
closing;
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37
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the fact that, subsequent to the announcement of the transaction
with affiliates of Greenbriar and prior to the execution of the
merger agreement, at the direction of the board of directors and
under the supervision of the special committee, Stephens
contacted 129 parties that might be interested in acquiring the
Company to solicit their interest in making a takeover proposal,
and of the 129 parties, only Parent submitted either a
non-binding or a binding proposal;
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the fact that the negotiations of the transaction with Parent,
including the merger agreement and the merger, were conducted
under the oversight of the special committee, which:
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°
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is comprised solely of independent directors who are not
employees of the Company and who have no material financial
interest in the merger that is different from that of the
Companys stockholders;
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°
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retained and received advice and assistance from the
Companys financial and legal advisors in evaluating,
negotiating and recommending the terms of the merger agreement;
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°
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was delegated the power and authority to review and evaluate,
participate in the negotiations of, and make recommendations to
the board of directors with respect to a transaction or any
alternative thereto; and
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°
|
the terms of the merger agreement were based on the terms of the
Greenbriar merger agreement, which resulted from extensive
negotiations between the special committee and its legal and
financial advisors, on the one hand, and Greenbriar and its
legal and financial advisors, on the other hand, with only
limited modifications requested by Parent that were generally
favorable to the Company and its stockholders;
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°
|
the consideration for the merger represented a 4.17% premium to
the merger consideration set forth in the Greenbriar merger
agreement, as amended, which resulted from extensive
negotiations between the special committee and its legal and
financial advisors, on the one hand, and Greenbriar and its
legal and financial advisors, on the other hand; and
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the fact that the merger is subject to the approval of the
Companys stockholders.
|
The special committee also considered a variety of risks and
other potentially negative factors concerning the merger
agreement and the merger, including the following:
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the current uncertain state of the economy and general
uncertainty surrounding forecasted economic conditions in both
the near-term and the long-term;
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the risks that the regulatory approvals required by the merger
may delay consummation of the transaction;
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the risks and costs to the Company if the merger does not close,
including the diversion of management and employee attention,
potential employee attrition and the potential effect on the
Companys business and its relationships with customers;
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the risk of a material decline in the Companys share price
or damage to the Companys relationship with its customers
if the merger does not close;
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the fact that the Companys stockholders will not
participate in any future earnings or growth of the Company and
will not benefit from any appreciation in value of the Company,
including any appreciation in value that could be realized as a
result of acquisitions or improvements to the Companys
operations;
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the requirement that the Company pay Parent a termination fee of
approximately $7.7 million if the Company enters into a
definitive agreement as the result of a superior proposal, which
may discourage other potential bidders from making a competing
bid to acquire us;
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the cost of terminating the Greenbriar merger agreement,
including the payment to certain affiliates of Greenbriar of a
termination fee of approximately $7.7 million;
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38
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|
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the restrictions on the conduct of the Companys business
prior to the completion of the merger, requiring the Company to
conduct its business only in the ordinary course, subject to
specific limitations, which may delay or prevent the Company
from undertaking business opportunities that may arise pending
completion of the merger;
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the fact that certain of the Companys directors and
executive officers have financial interests in the merger that
are different from, or in addition to, those of the
Companys stockholders generally (see the section entitled
The Merger Interests of Certain Persons in the
Merger beginning on page 49);
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the fact that the closing of the merger is conditioned upon
there being demands for appraisal from not more than 15% of the
outstanding shares of the Companys common stock;
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|
the fact that, even if the merger is not completed, the Company
will be required to pay its legal and accounting fees, a portion
of the Companys investment banking fees, and other
miscellaneous fees;
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|
the fact that, for U.S. federal income tax purposes, the
transaction would be taxable to the Companys stockholders
that are U.S. holders; and
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the fact that, while the Company expects that the merger will be
consummated, there can be no assurance that all conditions to
the parties obligations to complete the merger agreement
will be satisfied, and, as a result, the merger may not be
consummated,
|
This discussion summarizes the material factors considered by
the special committee in its consideration of the merger but is
not meant to be an exhaustive list of the factors considered by
the special committee. After considering these factors, the
special committee concluded that the positive factors relating
to the merger agreement and the merger significantly outweighed
the potential negative factors. In view of the wide variety of
factors considered by the special committee, and the complexity
of these matters, the special committee did not find it
practicable to quantify or otherwise assign relative weights to
the foregoing factors. In addition, individual members of the
special committee may have assigned different weights to various
factors. The special committee unanimously approved and
recommended the merger agreement and the merger based upon the
totality of the information presented to and considered by it.
The special committee believes that the merger is fair to, and
in the best interests of, the Company and its stockholders.
Board
of Directors
The board of directors, acting upon the unanimous recommendation
of the special committee, unanimously determined that merger
agreement is superior to the Greenbriar merger agreement, that
the Greenbriar merger agreement should be terminated, and that
the required termination fee should be paid to DashNow Holding
Corp. The board of directors, acting upon the unanimous
recommendation of the special committee, also unanimously
(i) determined that the merger, the merger agreement and
the other transactions contemplated by the merger agreement are
fair to, and in the best interests of, the Company and its
stockholders, and declared it advisable to enter into the merger
agreement; (ii) approved the execution and delivery of the
merger agreement, the performance by the Company of its
covenants and agreements contained in the merger agreement and
the consummation of the transactions contemplated thereby,
including the merger, upon the terms and subject to the
conditions contained in the merger agreement; and
(iii) resolved to recommend that the stockholders adopt the
merger agreement and directed that such matter be submitted for
consideration of the stockholders of the Company at the special
meeting.
In reaching these determinations, the board of directors
considered (i) a variety of business, financial and market
factors; (ii) the financial presentation of Stephens,
including the written opinion of Stephens to the board of
directors dated December 14, 2010 as to the fairness, from
a financial point of view, to the Companys public
stockholders of the consideration to be received as a result of
the merger; (iii) each of the positive and negative factors
considered by the special committee in its unanimous
recommendation, as described above; and (iv) the unanimous
recommendation of the special committee.
The foregoing discussion summarizes the material factors
considered by the board of directors in its consideration of the
merger. In view of the wide variety of factors considered by the
board of directors, and
39
the complexity of these matters, the board of directors did not
find it practicable to quantify or otherwise assign relative
weights to the foregoing factors. In addition, individual
members of the board of directors may have assigned different
weights to various factors. The board of directors unanimously
approved and recommended the merger agreement and the merger
based upon the totality of the information presented to and
considered by it.
The board of directors believes that the merger is fair to, and
in the best interests of, the Company and its stockholders and
recommends that the stockholders adopt the merger agreement.
The board of directors recommends that you vote
FOR the adoption of the merger agreement.
Opinion
of Stephens, Financial Advisor
Stephens was retained to assist the Company in analyzing
potential strategic alternatives that may lead to a possible
sale and, in such capacity, acted as the financial advisor to
the Company. As part of its engagement, the Company requested
the opinion of Stephens as to the fairness, from a financial
point of view, to the Companys public stockholders of the
$25.00 per share cash consideration to be received by the
Companys public stockholders in the merger pursuant to the
merger agreement. For the purposes of Stephens opinion,
the public stockholders of the Company means the
holders of outstanding shares of the Companys common
stock, other than Parent and its directors, officers and
affiliates and the directors, officers, managers and affiliates
of the Company. On December 14, 2010, Stephens delivered
its oral opinion to the board of directors of the Company and
subsequently confirmed in a written opinion, dated
December 14, 2010, that, as of that date and based upon and
subject to the assumptions, procedures, factors, limitations and
qualifications stated in its written opinion, the $25.00 per
share cash consideration to be received by the Companys
public stockholders was fair, from a financial point of view, to
the public stockholders.
Stephens provided the opinion described above for the
information and assistance of the board of directors in
connection with its consideration of the approval of the merger
agreement. The terms of the merger agreement, including the
amount and form of the consideration payable pursuant to the
merger agreement to the Companys public stockholders, were
determined through negotiations between the Company and
TransForce, and were approved by the board of directors.
Stephens did not recommend the amount or form of consideration
payable pursuant to the merger agreement. Stephens has consented
to the inclusion within the proxy statement of its opinion and
the description of its opinion appearing under this subheading
Opinion of Stephens, Financial Advisor. The full
text of the written opinion of Stephens, dated December 14,
2010, which sets forth assumptions made, procedures followed,
matters considered and limitations on the review undertaken in
connection with the opinion is attached as Annex B
to this proxy statement.
Stephens opinion does not address the merits of the
underlying decision by the Company to enter into the merger
agreement, the merits of the merger as compared to other
alternatives potentially available to the Company or the
relative effects of any alternative transaction in which the
Company might engage, nor is it intended to be a recommendation
to any person as to how to vote on the proposal to adopt the
merger agreement. In addition, except as explicitly set forth in
Stephens opinion, Stephens was not asked to address, and
Stephens opinion does not address, the fairness to, or any
other consideration of, the holders of any class of securities,
creditors or other constituencies of the Company other than the
public stockholders. Stephens was not asked to express any
opinion, and does not express any opinion, as to the fairness of
the amount or nature of the compensation to any of the
Companys officers, directors or employees, or to any group
of such officers, directors or employees, relative to the
compensation to other shareholders of the Company.
Stephens fairness opinion committee has approved
Stephens opinion.
In connection with its opinion, Stephens has:
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analyzed certain publicly available financial statements and
reports regarding the Company;
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|
analyzed certain internal financial statements and other
financial and operating data (including the financial forecast
for fiscal years 2011 2015) concerning the
Company prepared by the management of the Company;
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|
reviewed the reported prices and trading activity for the
Companys common stock;
|
40
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|
compared the financial performance of the Company and the prices
and trading activity of the Companys common stock with
that of certain other comparable publicly-traded companies and
their securities;
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|
reviewed the financial terms, to the extent publicly available,
of certain comparable transactions;
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|
reviewed the forecasted potential future cash flows of the
Company;
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|
reviewed the most recent draft provided to Stephens of the
merger agreement and related documents;
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|
discussed with management of the Company the operations of and
future business prospects for the Company;
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|
assisted in the board of directors deliberations regarding
the material terms of the merger agreement and in the
Companys negotiations with TransForce; and
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|
performed such other analyses and provided such other services
as Stephens has deemed appropriate.
|
As described within the proxy statement under The
Merger Background of the Merger, subsequent to
rendering its opinion and following the public announcement of
the initial merger agreement with Greenbriar on October 1,
2010 (initial Greenbriar merger agreement), at the
direction of the board of directors, Stephens aggressively
solicited the interest of other third parties with respect to a
possible business combination transaction with the Company in
accordance with the terms of the merger agreement.
In rendering its opinion, Stephens relied on the accuracy and
completeness of the information and financial data provided to
it by the Company and of the other information reviewed by it in
connection with the preparation of its opinion, and
Stephens opinion is based upon such information. Stephens
has not assumed any responsibility for independent verification
of the accuracy or completeness of any of such information or
financial data. The management of the Company has assured
Stephens that they are not aware of any relevant information
that has been omitted or remains undisclosed to Stephens.
Stephens has not assumed any responsibility for making or
undertaking an independent evaluation or appraisal of any of the
assets or liabilities of the Company or Parent, and it has not
been furnished with any such evaluations or appraisals; nor has
it evaluated the solvency or fair value of the Company or Parent
under any laws relating to bankruptcy, insolvency or similar
matters. Stephens has not assumed any obligation to conduct any
physical inspection of the properties or facilities of the
Company. With respect to the financial forecasts for fiscal
2011-2015
prepared by the management of the Company, Stephens has assumed
they have been reasonably prepared and reflected the best
currently available estimates and judgments of the management of
the Company as to the future financial performance of the
Company. Stephens opinion is necessarily based upon
market, economic, and other conditions as they existed and could
be evaluated, and on the information made available to them, as
of the date of its opinion. Stephens has also assumed that the
representations and warranties contained in the merger agreement
and all related documents are true, correct and complete in all
material respects.
The following is a summary of the material financial analyses
performed and material factors considered by Stephens in
connection with its opinion. Stephens performed certain
procedures, including each of the financial analyses described
below, and reviewed with the board of directors the assumptions
upon which the analyses were based, as well as other factors.
Although the summary does not purport to describe all of the
analyses performed or factors considered by Stephens within this
regard, it does set forth those considered by Stephens to be
material in arriving at its opinion. The order of the summaries
of analyses described does not represent the relative importance
or weight given to those analyses by Stephens. It should be
noted that in arriving at its opinion, Stephens did not
attribute any particular weight to any analysis or factor
considered by it, but rather made qualitative judgments as to
the significance and relevance of each analysis and factor.
Accordingly, Stephens believes that its analysis must be
considered as a whole and that considering any portion of such
analyses and factors, without considering all analyses and
factors as a whole, could create a misleading or incomplete view
of the process underlying its opinion.
Premium Analysis. Stephens analyzed the
consideration to be received by holders of the Companys
common stock pursuant to the merger agreement in relation to the
consideration to be received pursuant to the
41
initial Greenbriar merger agreement, the amended Greenbriar
merger agreement, the closing price of the Companys common
stock on September 28, 2010 (prior to announcement of the
initial Greenbriar merger agreement), and the average closing
prices of the Companys common stock for the
7-day,
30-day and
year-to-date
(YTD) periods ended September 28, 2010. This
analysis indicated that the price per share to be paid to the
holders of shares of the Companys common stock pursuant to
the merger agreement represented a premium of:
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17.6% based on the consideration to be received in the initial
Greenbriar merger agreement of $21.25 per share
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4.17% based on the consideration to be received in the amended
Greenbriar merger agreement of $24.00 per share
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62.5% based on the closing stock price on September 28,
2010 of $15.38 per share
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|
|
65.2% based on the
7-day
average closing price of $15.13 per share
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|
85.8% based on the
30-day
average closing price of $13.46 per share
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|
63.8% based on the YTD average closing price of $15.26 per share
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27.2% based on the 52 week high closing stock price of
$19.66 per share
(10/22/09)
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105.8% based on the 52 week low closing stock price of
$12.15 per share
(6/29/10)
|
Implied Transaction Multiples. Stephens
calculated select implied transaction multiples for the Company
based upon the merger and financial information provided by
Company management. Stephens calculated an implied equity value
by multiplying $25.00 by the aggregate number of shares of the
Companys common stock on a fully diluted basis (including
restricted stock, performance units and stock options on a net
exercise basis). Stephens then calculated an implied enterprise
value based on the implied equity value plus
(i) indebtedness, minus (ii) cash, cash equivalents
and marketable securities, which we refer to as Enterprise
Value. As used within the description of Stephens
financial analyses, EBITDA means earnings before
interest, taxes, depreciation and amortization, EBIT
means earnings before interest and taxes, EPS means
earnings per share, LTM means last twelve months,
and CY means calendar year; provided that EBITDA,
EBIT and EPS have been adjusted to reflect non-recurring
expenses. Unless otherwise noted, for the purposes of this
section, The Merger Opinion of Stephens,
Financial Advisor, EBITDA, EBIT and EPS of the Company
have been adjusted to reflect $4.4 million and
$3.8 million of non-recurring expenses identified by the
management of the Company for the LTM and CY periods,
respectively.
The results of these analyses are summarized in the table below:
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Company Multiple
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|
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(Based on $25.00 Offer Price)
|
|
Enterprise Value to:
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|
|
LTM EBITDA
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|
|
9.6x
|
|
CY2010 EBITDA Estimate
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|
|
9.3x
|
|
Offer Price to:
|
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|
|
LTM EPS
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|
|
19.6x
|
|
CY2010 EPS Estimate
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|
|
18.9x
|
|
Comparable Companies Analysis. Stephens
analyzed the public market statistics of certain comparable
companies to the Company and examined various trading statistics
and information relating to those companies. Stephens selected
the companies below because their businesses and operating
profiles are reasonably similar to the Company. No selected
company identified below is identical to the Company. A complete
analysis involves complex considerations and qualitative
judgments concerning differences in financial and operating
characteristics of the selected companies and other factors that
could affect the public trading values of those selected
companies. Mathematical analysis (such as determining the mean
or the median) is not in itself a meaningful method of using
selected company data.
42
In choosing similar companies to analyze, Stephens selected the
following companies:
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C. H. Robinson Worldwide, Inc.
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Expeditors International of Washington, Inc.
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Forward Air Corp.
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Hub Group Inc.
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J.B. Hunt Transport Services Inc.
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Landstar System Inc.
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Universal Truckload Services Inc.
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UTi Worldwide Inc.
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Stephens examined the historical market trading multiples of the
selected companies to the Company, including the average market
trading multiples of Enterprise Value to LTM EBITDA and of price
to LTM EPS for the
2-year and
5-year
periods ending September 28, 2010. Stephens noted the
historical disparity between the market trading multiples of the
selected companies and the Company.
The results of these analyses are summarized in the table below:
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Percent Discount of
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Company to
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Selected Companies
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Selected
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Mean
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|
Company
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|
Companies Mean
|
|
Enterprise Value to:
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LTM EBITDA Multiple 2 Year Average
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11.2
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x
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6.5
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x
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|
(42.2
|
)%
|
LTM EBITDA Multiple 5 Year Average
|
|
|
12.8
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x
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|
8.9
|
x
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(30.7
|
)%
|
Price to:
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|
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|
LTM EPS 2 Year Average
|
|
|
25.1
|
x
|
|
|
13.4
|
x
|
|
|
(46.6
|
)%
|
LTM EPS 5 Year Average
|
|
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25.6
|
x
|
|
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17.1
|
x
|
|
|
(33.5
|
)%
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In addition, Stephens examined the market trading multiples for
each company based on the September 28, 2010 closing price
and information publicly available at that time, including the
multiple of Enterprise Value to LTM and estimated CY 2010 EBITDA
and of price to LTM and estimated CY 2010 EPS. For the purposes
of the September 28, 2010 trading multiples for the Company
presented below, EBITDA and EPS of the Company have been
adjusted to reflect $2.6 million and $1.8 million of
non-recurring expenses for the LTM and CY periods, respectively.
Stephens noted the disparity between the market trading
multiples of the selected companies and the Company.
Additionally, Stephens noted the market trading multiples of the
selected companies based on December 10, 2010 closing
prices.
The results of these analyses are summarized in the table below:
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Based on 9/28/10 Closing Price
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|
|
Selected Companies
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Percent Discount
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|
|
Mean
|
|
Selected
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|
|
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of Company to
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(Based on 12/10/10
|
|
Companies
|
|
|
|
Selected
|
|
|
Closing Price)
|
|
Mean
|
|
Company
|
|
Companies Mean
|
|
Enterprise Value to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM EBITDA
|
|
|
14.5
|
x
|
|
|
14.2
|
x
|
|
|
5.3
|
x
|
|
|
(62.7
|
)%
|
CY2010 EBITDA Estimate
|
|
|
12.9
|
x
|
|
|
12.1
|
x
|
|
|
5.3
|
x
|
|
|
(56.2
|
)%
|
Price to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTM EPS
|
|
|
32.2
|
x
|
|
|
29.2
|
x
|
|
|
12.2
|
x
|
|
|
(58.2
|
)%
|
CY2010 EPS Estimate
|
|
|
26.9
|
x
|
|
|
25.1
|
x
|
|
|
12.3
|
x
|
|
|
(51.0
|
)%
|
43
Based on this data and its understanding of the relative
operating, financial and trading characteristics of the selected
comparable companies and of the Company, Stephens derived a
range for the implied value per share of the Companys
common stock of $18.31$26.79. Stephens noted that the
merger consideration of $25.00 per share for the Companys
common stock was within the range.
Comparable Transactions Analysis. Stephens
reviewed the financial terms of selected logistics services
acquisition transactions announced since January 1, 2002.
The following transactions were reviewed by Stephens (in each
case, the first named company was the acquiror and the second
named company was the acquired company and the transaction date
is noted parenthetically):
|
|
|
|
|
GENCO Distribution System, Inc. / ATC Technology
Corporation
(7/19/10)
|
|
|
|
Harbour Group / Fleetgistics
(3/23/10)
|
|
|
|
CPP Investment Board and Sterling
Partners / Livingston International Income Fund
(10/8/09)
|
|
|
|
Global Logistics Acquisition Corporation / The Clark
Group
(5/21/07)
|
|
|
|
TransForce Income Fund / Century II Holdings Inc.
(8/29/07)
|
|
|
|
Oak Hill Capital Partners / Jacobson Companies
(6/4/07)
|
|
|
|
Investcorp and Hicks Holdings LLC / Greatwide
Logistics Services
(12/19/06)
|
|
|
|
Velocity Express Corporation / CD&L, Inc.
(7/5/06)
|
|
|
|
UTi Worldwide Inc. / Market Industries
(3/7/06)
|
|
|
|
Charterhouse Group Inc. / Towne Holdings Inc.
(11/30/05)
|
|
|
|
Welsh, Carson, Anderson &
Stowe / Ozburn-Hessey Logistics
(6/27/05)
|
|
|
|
Fenway Partners Inc. / Panther II Transportation,
Inc.
(6/13/05)
|
|
|
|
SUPERVALU / Total Logistics, Inc.
(2/7/05)
|
|
|
|
Arsenal Capital Partners / Priority Air Express, Ltd.
(8/24/04)
|
|
|
|
Exel plc / Tibbett & Britten Group plc
(8/4/04)
|
|
|
|
PBB Global Logistics Income Fund / Clarke
Inc. Logistics Division
(7/5/04)
|
|
|
|
American Capital Strategies / Roadrunner
(7/30/03)
|
|
|
|
UTi Worldwide Inc. / Standard Corp.
(10/11/02)
|
Stephens considered these selected logistics services
acquisition transactions to be reasonably similar, but not
identical, to the merger. A complete analysis involves complex
considerations and qualitative judgments concerning differences
in the selected transactions and other factors that could affect
the transaction values in those selected transactions to which
the merger is being compared. Mathematical analysis (such as
determining the mean or the median) is not in itself a
meaningful method of using selected transaction data.
For the selected transactions listed above, Stephens used
publicly available financial information to determine the
multiple of Enterprise Value to LTM EBITDA and of Enterprise
Value to LTM EBIT.
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Median Selected
|
|
|
(Based on $25.00 Offer Price)
|
|
Transactions
|
|
Enterprise Value to:
|
|
|
|
|
|
|
|
|
LTM EBITDA
|
|
|
9.6x
|
|
|
|
8.4x
|
|
LTM EBIT
|
|
|
11.7x
|
|
|
|
10.0x
|
|
Based on this data, its understanding of the relative operating
and financial characteristics of the target company and of the
Company, and its understanding of the market, economic and other
conditions as they existed as of the date of the selected
transactions and of its opinion, Stephens derived an implied
value range
44
of approximately $19.06$23.66 per share of the
Companys common stock. Stephens noted that the merger
consideration of $25.00 per share for the Companys common
stock was above the range.
Discounted Cash Flow Analysis. Stephens
performed a discounted cash flow analysis on the Company using
projections developed by management for fiscal years
20112015. The projections included assumptions, among
others, of revenue increasing at a compound annual growth rate
of 7.3% from fiscal year 2010 to 2015 and EBITDA margins
expanding from 5.7% in fiscal year 2010 to 8.3% in 2015.
Utilizing these projections, Stephens calculated a range of
implied price per share based upon the discounted net present
value of the sum of the projected stream of unlevered free cash
flows for the nine months ending July 31, 2011 and years
ending July 31, 2012 to July 31, 2015 and a projected
terminal value at July 31, 2015. Stephens considered
discount rates ranging from 18.0% to 20.0% (based on a weighted
average cost of capital analysis) and EBITDA exit multiples
ranging from 7.09.0x. The weighted average cost of capital
was determined by the sum of (a) the market value of equity
as a percentage of the total market value of the Companys
capital multiplied by the Companys estimated cost of
equity, and (b) the market value of debt as a percentage of
the total market value of the Companys capital multiplied
by the Companys estimated after-tax market cost of debt.
The Companys estimated cost of equity was calculated using
the Capital Asset Pricing Model which took into account the risk
free rate, the Companys beta, betas of comparable
companies, and applicable risk premia. Utilizing the ranges of
discount rates and exit multiples, Stephens derived an implied
valuation range of $22.44$28.19. Stephens noted that the
merger consideration of $25.00 per share for the Companys
common stock was within the range.
Leveraged Buyout Analysis. Stephens performed
a leveraged buyout analysis on the Company using projections
developed by management for fiscal years 20112015,
adjusted for annual public company expenses of approximately
$1.0 million. This analysis calculates current values for
the Company based on the value that a hypothetical new equity
investor would be willing to pay for the Company in order to
generate acceptable internal rates of return. Based on a range
of target internal rates of return of 25.0% to 35.0% for the
hypothetical equity investor, a range of leverage of
3.04.0x LTM EBITDA and a five-year EBITDA exit multiple of
8.0x, the analysis yielded values for the Companys common
stock of $18.15$23.55. Stephens noted that the merger
consideration of $25.00 per share for the Companys common
stock was above the range.
Premiums Paid Analysis. Stephens performed a
premiums paid analysis based upon the premiums paid in 75
precedent public merger and acquisition transactions. The
transactions utilized within the analysis were completed or
announced between December 10, 2008 and December 10,
2010 and involved U.S. targets with pre-deal market
capitalization greater than $50 million, transaction value
between $100 million and $1 billion, and LTM EBITDA
greater than $0. The analysis excluded targets in the oil, gas
and consumable fuels, banking and real estate industries. In the
premiums paid analysis, Stephens analyzed the premiums paid
based on (i) the closing stock price of the target one day
prior to announcement of the transaction; (ii) the average
of the closing stock prices of the target for the seven days
prior to announcement of the transaction; and (iii) the
average of the closing stock prices of the target for the thirty
days prior to announcement of the transaction. The means for the
one day, seven day average and thirty day average premiums were
38.0%, 36.7% and 40.3%, respectively.
45
In addition, Stephens calculated the percentage of the examined
transactions completed where the premium paid was between 0 and
100% in 10% increments. The results of this analysis are set
forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Transactions
|
Premium
|
|
1 Day
|
|
7 Day Avg.
|
|
30 Day Avg.
|
|
> 100%
|
|
|
2.7
|
%
|
|
|
1.3
|
%
|
|
|
2.7
|
%
|
90.0% 100.0%
|
|
|
2.7
|
%
|
|
|
1.3
|
%
|
|
|
1.3
|
%
|
80.0% 90.0%
|
|
|
0.0
|
%
|
|
|
2.7
|
%
|
|
|
4.0
|
%
|
70.0% 80.0%
|
|
|
4.0
|
%
|
|
|
6.7
|
%
|
|
|
4.0
|
%
|
60.0% 70.0%
|
|
|
6.7
|
%
|
|
|
4.0
|
%
|
|
|
4.0
|
%
|
50.0% 60.0%
|
|
|
6.7
|
%
|
|
|
5.3
|
%
|
|
|
9.3
|
%
|
40.0% 50.0%
|
|
|
16.0
|
%
|
|
|
13.3
|
%
|
|
|
14.7
|
%
|
30.0% 40.0%
|
|
|
26.6
|
%
|
|
|
22.7
|
%
|
|
|
25.3
|
%
|
20.0% 30.0%
|
|
|
17.2
|
%
|
|
|
18.7
|
%
|
|
|
14.7
|
%
|
10.0% 20.0%
|
|
|
6.7
|
%
|
|
|
13.3
|
%
|
|
|
12.0
|
%
|
0.0% 10.0%
|
|
|
10.7
|
%
|
|
|
10.7
|
%
|
|
|
8.0
|
%
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephens noted that the merger consideration of $25.00 per share
represented a premium of 62.5% over the closing share price of
the Company on September 28, 2010, a premium of 65.2% over
the average of the closing share prices of the 7 days prior
to September 28, 2010 and a premium of 85.8% over the
average of the closing share prices of the 30 days ended
September 28, 2010.
Historical Trading Analysis. Stephens analyzed
the historical daily closing prices per share of the
Companys common stock for the one-year period ending
September 28, 2010. Stephens noted that during this period,
the 52-week low (reached on June 29, 2010) and 52-week
high (reached on October 22, 2009) closing prices per
share of the Companys common stock were $12.15 and $19.66,
respectively. Stephens further noted that the merger
consideration of $25.00 per share for the Companys common
stock was above the upper end of the 52-week range for the
closing prices per share of the Companys common stock for
the one-year period ended September 28, 2010.
As part of Stephens investment banking business, Stephens
regularly issues fairness opinions and is continually engaged in
the valuation of companies and their securities in connection
with business reorganizations, private placements, negotiated
underwritings, mergers and acquisitions and valuations for
estate, corporate and other purposes. Stephens is familiar with
the Company and regularly provides investment banking services
to the Company and issues research reports regarding the
Company. During the two years preceding September 28, 2010,
Stephens provided investment banking services to the Company,
but did not receive investment banking revenues from the
Company. Stephens expects to pursue future investment banking
services assignments from participants in the merger. In the
ordinary course of business, Stephens and its affiliates at any
time may hold long or short positions, and may trade or
otherwise effect transactions as principal or for the accounts
of customers, in debt or equity securities or options on
securities of the Company or of any other participant in the
merger.
Fee
Arrangements
The Company retained Stephens based on its qualifications and
expertise and its reputation as a nationally recognized
investment banking firm. Pursuant to a letter agreement dated
June 17, 2010, Stephens received a fee of $600,000 for the
delivery of its opinion on October 1, 2010, a fee in the
amount of $50,000 for the delivery of its opinion on
November 30, 2010 and a fee of $600,000 for its opinion
delivered on December 14, 2010. Under the terms of the
June 17, 2010 letter agreement, Stephens will be entitled
to receive an additional fee of approximately $2.4 million
upon consummation of the merger. The Company has also agreed to
reimburse Stephens for certain of its
out-of-pocket
expenses (including fees and expenses of its counsel)
46
reasonably incurred by it in connection with its services and
will indemnify Stephens against potential liabilities arising
out of its engagement, including certain liabilities under the
U.S. federal securities laws.
Certain
Company Forecasts
While the Company provides public guidance in September or
October of each year for its financial performance for the
subsequent fiscal year, and periodically updates such guidance
during the course of the subsequent fiscal year, it does not, as
a matter of course, publicly disclose financial projections as
to future financial performance, earnings or other results for
longer than one year. The Company is especially cautious of
making financial projections for periods longer than one fiscal
year due to unpredictability of the underlying assumptions and
estimates. However, in connection with the evaluation of a
possible transaction involving the Company, the Companys
senior management prepared and provided to Parent, the board of
directors, the special committee and Stephens certain non-public
financial projections covering multiple years that were not
prepared with a view toward public disclosure. The financial
projections were utilized by Stephens, at the direction of the
Company, for purposes of the financial analyses it rendered to
the special committee and the board of directors during the
process of evaluating the merger and its analyses in connection
with its opinion. See The Merger Opinion of
Stephens, Financial Advisor beginning on page 40.
A summary of these financial projections is not being included
in this proxy statement to influence your decision whether to
vote for or against the proposal to adopt the merger agreement,
but because these financial projections were made available to
Parent, the board of directors, the special committee and
Stephens. The inclusion of these projections or any other
projections provided in connection with the transaction should
not be regarded as a representation by the Company, Merger Sub,
the board of directors, the special committee, Parent, Stephens
or any other person that it considered, or now considers, the
projections to be necessarily representative of actual future
results.
The Company believes that the assumptions its senior management
used as a basis for the projections were reasonable at the time
the projections were prepared, given information the
Companys senior management had at the time. However,
except to the extent required by applicable federal securities
laws, the Company does not intend, and expressly disclaims any
responsibility, to update or otherwise revise the projections to
reflect circumstances existing after the date when prepared or
to reflect the occurrence of future events even in the event
that any of the assumptions underlying the projections are shown
to be in error. The assumptions upon which these projections
were based are subjective in many respects and are subject to
various interpretations.
Although the projections are presented with numerical
specificity, the projections reflect numerous assumptions with
respect to industry performance, general business, economic,
market, regulatory and financial conditions and other matters,
all of which are difficult to predict and many of which are
beyond the Companys control. The projections are also
subject to significant uncertainties in connection with changes
to the Companys business and its financial condition and
results of operations, and include numerous estimates and
assumptions related to the Companys business that are
inherently subject to significant economic, political and
competitive uncertainties, including those factors described
under Risk Factors incorporated herein by reference
from the Companys
10-K, filed
on September 22, 2010, all of which are difficult to
predict and many of which are beyond the Companys control.
As a result, although the projections set forth below were
prepared in good faith based upon assumptions believed to be
reasonable at the time the projections were prepared, there can
be no assurance that the projected results will be realized or
that actual results will not be significantly higher or lower
than projected. Since the projections below cover multiple
years, such information by its nature becomes less reliable with
each successive year. For the foregoing reasons, the inclusion
of projections in this proxy statement should not be regarded as
an indication that such projections will be necessarily
predictive of actual future events, and they should not be
relied on as such.
The projections were not prepared with a view to compliance with
published guidelines of the SEC regarding projections, the
guidelines established by the American Institute of Certified
Public Accountants for preparation and presentation of
prospective financial information or GAAP. Furthermore, the
Companys independent auditor has not examined, compiled or
otherwise applied procedures to the projections and,
47
accordingly, assumes no responsibility for, and expresses no
opinion on, them. The Company has made no representation to
Parent, Merger Sub or any other person in the merger agreement
or otherwise concerning these financial projections.
The financial projections are forward-looking statements. For
information on factors that may cause the Companys future
financial results to materially vary, see Cautionary
Statements Concerning Forward-Looking Information
beginning on page 18 of this proxy statement.
The following is a summary of the financial projections prepared
by the Companys senior management and provided to Parent,
the board of directors, the special committee and Stephens:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending July 31,
|
|
|
|
2011E
|
|
|
2012E
|
|
|
2013E
|
|
|
2014E
|
|
|
2015E
|
|
|
|
($ in thousands, other than EBITDA Margin and Earning Per
Share)
|
|
|
Revenue(1)
|
|
$
|
438,481
|
|
|
$
|
469,829
|
|
|
$
|
503,439
|
|
|
$
|
539,473
|
|
|
$
|
578,106
|
|
EBITDA(2)
|
|
$
|
25,132
|
|
|
$
|
30,115
|
|
|
$
|
35,603
|
|
|
$
|
41,594
|
|
|
$
|
48,127
|
|
EBITDA Margin
|
|
|
5.7%
|
|
|
|
6.4%
|
|
|
|
7.1%
|
|
|
|
7.7%
|
|
|
|
8.3%
|
|
Earnings Per Share(3)
|
|
$
|
1.33
|
|
|
$
|
1.64
|
|
|
$
|
1.99
|
|
|
$
|
2.44
|
|
|
$
|
2.88
|
|
Net Cash Provided by Operating Activities
|
|
$
|
20,490
|
|
|
$
|
21,330
|
|
|
$
|
24,276
|
|
|
$
|
26,625
|
|
|
$
|
30,471
|
|
Net Cash Used in Investing Activities
|
|
$
|
2,285
|
|
|
$
|
2,294
|
|
|
$
|
2,409
|
|
|
$
|
2,530
|
|
|
$
|
2,656
|
|
Note: The financial projections were developed as of
July 8, 2010, and:
exclude the impact from any future acquisitions;
include certain non-recurring charges of
approximately $0.3 million in fiscal year 2011;
include estimated annual public company expenses of
approximately $1.3 million; and
|
|
|
|
|
include stock option expense of approximately $1.4 million
in fiscal year 2011 and 10% annual growth in the expense
thereafter.
|
(1) Annual revenue growth, net of estimated customer churn,
is assumed to be approximately 7.9% in fiscal year 2011 and
approximately 7.2% in the years thereafter.
(2) EBITDA is defined as income excluding interest, taxes,
depreciation and amortization. EBITDA is presented because
management believes that it is a widely accepted and useful
financial indicator regarding our results of operations.
Management believes EBITDA assists in analyzing and benchmarking
the performance and value of our business. Although our
management uses EBITDA as a financial measure to assess the
performance of our business compared to that of others in our
industry, the use of EBITDA is limited because it does not
include certain costs that are material in amount, such as
interest, taxes, depreciation and amortization, which are
necessary to operate our business. EBITDA is not a recognized
term under generally accepted accounting principles and, when
analyzing our operating performance, investors should use EBITDA
in addition to, not as an alternative for, operating income, net
income and cash flows from operating activities.
(3) Earnings per share for all periods are based on diluted
shares outstanding as of July 31, 2010.
Readers of this proxy statement are cautioned not to place undue
reliance on the summary of the financial projections set forth
above. No one has made or makes any representation to you
regarding the information included in these projections or the
future financial results of the Company.
Financing
of the Merger
We anticipate that the total amount of funds necessary to
complete the merger will be approximately $263 million, in
the aggregate, comprised of:
|
|
|
|
|
approximately $248 million to pay our stockholders (and
holders of options, restricted stock and performance units) the
amounts due to them under the merger agreement; and
|
48
|
|
|
|
|
approximately $15 million to pay related fees and expenses
in connection with the transactions contemplated by the merger
agreement.
|
These payments are expected to be funded by Parent from its cash
on hand and committed funding under its credit facilities.
Interests
of Certain Persons in the Merger
In considering the recommendation of our board of directors that
you vote to adopt the merger agreement, you should be aware that
certain of our directors and executive officers have financial
interests in the merger that are different from, or in addition
to, those of our stockholders generally. The board of directors
was aware of and considered these interests, among other
matters, in evaluating and negotiating the merger agreement and
the merger, and in recommending that the merger agreement be
adopted by the stockholders of the Company. For the purposes of
all of the agreements and plans described below, the completion
of the transactions contemplated by the merger agreement will
constitute a change in control.
Equity
Compensation and Incentive Awards
At the effective time of the merger, (i) each outstanding
option to purchase shares of the Companys common stock
that is outstanding and unexercised as of immediately prior to
the effective time of the merger, whether vested or unvested,
will automatically vest and be converted into the right to
receive a cash payment equal to the number of shares of the
Companys common stock subject to such option multiplied by
the amount (if any) by which $25.00 exceeds the exercise price
per share of such option, less any applicable withholding taxes,
(ii) the restrictions on each share of restricted stock
(other than the shares of restricted stock granted under
existing plans on September 24, 2010, which will be
cancelled without payment) will lapse and be converted into the
right to receive a cash payment equal to $25.00, less any
applicable withholding taxes and (iii) each outstanding
performance unit (other than performance units granted under
existing plans on September 24, 2010, which will be
cancelled without payment) will vest and each share of the
Companys common stock issued in respect of the performance
units will be converted into the right to receive a cash payment
equal to $25.00, less any applicable withholding taxes.
The following table sets forth, as of December 28, 2010,
the equity compensation award holdings of the Companys
directors and executive officers and the gross value of such
holdings assuming the merger is completed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
Value of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
Company
|
|
|
Number of
|
|
|
|
|
|
Outstanding
|
|
|
Value of
|
|
|
|
of Company
|
|
|
Restricted
|
|
|
Outstanding
|
|
|
Value of
|
|
|
Company
|
|
|
Company
|
|
|
|
Restricted
|
|
|
Common
|
|
|
Company
|
|
|
Company
|
|
|
Performance
|
|
|
Performance
|
|
Name
|
|
Stock*
|
|
|
Stock
|
|
|
Stock Options
|
|
|
Stock Options
|
|
|
Units**
|
|
|
Units
|
|
|
Brian Hughes
|
|
|
-0-
|
|
|
|
|
|
|
|
15,000
|
|
|
$
|
70,980
|
|
|
|
-0-
|
|
|
|
|
|
Gilbert Jones
|
|
|
-0-
|
|
|
|
|
|
|
|
10,079
|
|
|
$
|
19,957
|
|
|
|
3,149
|
|
|
$
|
78,725
|
|
Wayne Kern
|
|
|
-0-
|
|
|
|
|
|
|
|
20,000
|
|
|
$
|
120,330
|
|
|
|
-0-
|
|
|
|
|
|
Craig Lentzsch
|
|
|
-0-
|
|
|
|
|
|
|
|
9,000
|
|
|
$
|
50,130
|
|
|
|
-0-
|
|
|
|
|
|
Richard McClelland
|
|
|
6,537
|
|
|
$
|
163,425
|
|
|
|
114,558
|
|
|
$
|
479,590
|
|
|
|
13,939
|
|
|
$
|
348,475
|
|
Bruce Ranck
|
|
|
-0-
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
230,005
|
|
|
|
-0-
|
|
|
|
|
|
Ray Schmitz
|
|
|
3,039
|
|
|
$
|
75,975
|
|
|
|
112,684
|
|
|
$
|
839,979
|
|
|
|
13,770
|
|
|
$
|
344,250
|
|
Stephen Smiley
|
|
|
-0-
|
|
|
|
|
|
|
|
20,000
|
|
|
$
|
120,330
|
|
|
|
-0-
|
|
|
|
|
|
James Welch
|
|
|
20,000
|
|
|
$
|
500,000
|
|
|
|
54,993
|
|
|
$
|
212,620
|
|
|
|
33,990
|
|
|
$
|
849,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
29,576
|
|
|
$
|
739,400
|
|
|
|
381,314
|
|
|
$
|
2,143,920
|
|
|
|
64,848
|
|
|
$
|
1,621,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Excludes Company restricted stock granted on September 24,
2010, which will be automatically cancelled without payment (and
without becoming vested and/or exercisable) upon a change in
control with Parent. |
49
|
|
|
** |
|
Excludes Company performance units granted on September 24,
2010, which will be automatically cancelled without payment (and
without becoming vested and/or exercisable) upon a change in
control with Parent. |
Retention
Agreements
We previously entered into retention agreements with Ray E.
Schmitz, our Chief Financial Officer, and several other
non-executive employees of the business. Mr. Schmitzs
retention agreement provides for the payment of certain
severance amounts if Mr. Schmitzs employment is
terminated without cause after a change in control.
Under Mr. Schmitzs agreement, any (i) material
diminution of the scope of his duties and responsibilities for
the Company, (ii) reduction in his base salary and employee
benefits or (iii) required relocation of more than
30 miles, gives Mr. Schmitz the right to terminate his
employment with the Company and such termination is deemed to be
a termination by the Company without cause.
In the event of a qualifying termination during the term of
Mr. Schmitzs retention agreement, Mr. Schmitz is
entitled to receive: (i) a lump sum payment equal to two
times the sum of (a) his annualized base salary as of the
date of such termination and (b) an amount equal to the
greater of: (x) his target bonus during either of the two
years preceding the change in control or (y) his target
bonus for the year in which he was terminated;
(ii) continued participation in all life, health and
disability benefits and programs in which he was a participant
immediately prior to such termination of employment, for a
period terminating on the earlier of (a) 18 months
after the date of such termination and (b) his obtaining
full-time employment with a new employer; and (iv) a
gross-up
payment for the excise taxes imposed under Section 4999 of
the Internal Revenue Code, if any, plus any federal, state or
local income tax or excise tax amount upon the gross up payment.
Based on Mr. Schmitzs compensation level as of
December 28, 2010, and assuming that the merger is
completed on March 1, 2011, and Mr. Schmitz
experiences a qualifying termination thereafter, the amount of
the cash severance payment (including the applicable target
bonus payment) that would be payable to Mr. Schmitz is
approximately $1,035,000, and the estimated value of the life,
health and disability benefits and programs he would continue to
receive is $19,482.
Arrangements
with the Surviving Corporation
As of the date of this proxy statement, we have been advised
that no members of our current management team have entered into
any agreement, arrangement or understanding with Parent, Merger
Sub or their affiliates regarding employment with, or the right
to convert into or reinvest or participate in the equity of, the
surviving corporation or Parent or any of its subsidiaries.
Certain members of our current management team may continue to
be employed by the Company following the merger and some of
these members may enter into new arrangements with Parent or its
affiliates, regarding future employment. Parent and its
affiliates have not entered into, or negotiated the terms of,
any such arrangements with any members of our management, and
Parents and Merger Subs obligations to consummate
the merger are not conditioned upon entry into any such
arrangements with members of our management team.
Except as disclosed in this proxy statement, there is no present
or proposed material agreement, arrangement, understanding or
relationship between Parent, Merger Sub, or any of their
respective executive officers, directors, controlling persons or
subsidiaries, on the one hand, and the Company or any of its
executive officers, directors, controlling persons or
subsidiaries, on the other hand.
Indemnification
and Insurance
Parent has agreed to, and has agreed to cause the Company and
the surviving corporation to, (i) until six years after the
effective time of the merger or, if longer, until all claims for
indemnification in respect of any claims made prior to the end
of such six year period have been finally resolved,
(a) indemnify and hold harmless our present and former
directors and officers against all claims, liabilities, losses,
damages, judgments, fines, penalties, costs (including amounts
paid in settlement or compromise) and reasonable
50
expenses (including reasonable fees and expenses of legal
counsel) in connection with any claim, suit, action, proceeding
or investigation (whether civil, criminal, administrative or
investigative), whenever asserted, based on or arising out of
the fact that such director or officer was a director or officer
of the Company or our subsidiaries (or acts or omissions by such
director or officer in his capacity as a director, officer,
employee or agent of the Company or such subsidiary or taken at
the request of the Company or such subsidiary) at or prior to
the effective time of the merger (including in connection with
the merger agreement or the transactions contemplated by the
merger agreement) to the fullest extent permitted by law and
(b) advance to such present and former directors and
officers all such expenses that are incurred to the fullest
extent permitted by law, and (ii) assume all obligations of
the Company and our subsidiaries to our present and former
directors and officers in respect of indemnification and
exculpation from liabilities for acts or omissions occurring at
or prior to the effective time of the merger as provided in our
governing documents and our indemnification agreements with our
present or former directors and officers. From and after the
effective time of the merger until six years after the effective
time of the merger or, if longer, until all claims for
indemnification in respect of any claims made prior to the end
of such six year period have been finally resolved, Parent will
cause the certificate of incorporation and by-laws of the
surviving corporation to contain provisions no less favorable to
our present and former directors and officers with respect to
limitation of liability and indemnification of directors and
officers than those set forth in the merger agreement and our
governing documents as of the date of the merger agreement,
which provisions will not be amended, repealed or otherwise
modified in a manner that would adversely affect the rights of
our present and former officers and directors.
The merger agreement provides that at our election, (i) we
may obtain, prior to the effective time of the merger, a
tail insurance policy with a claims period of at
least six years from the effective time of the merger with
respect to the directors and officers liability
insurance in amount and scope no less favorable than our
existing policy for claims arising from facts or events that
occurred on or prior to the effective time of the merger at a
cost that does not exceed 250% of the annual premium currently
paid by the Company for directors and officers
insurance or (ii) Parent will provide or cause the
surviving corporation to provide, for at least six years after
the effective time of the merger, our present and former
directors and officers who are insured under our current
directors and officers insurance and indemnification
policy with an insurance and indemnification policy that
provides coverage for events occurring at or prior to the
effective time of the merger that is no less favorable than our
existing policy. However, Parent and the surviving corporation
are not required to pay an aggregate amount in excess of 250% of
the annual premium currently paid by the Company for such
insurance and if the annual premiums of such insurance coverage
exceed 250% of the annual premium currently paid, Parent or the
surviving corporation will be obligated to obtain a policy with
the greatest coverage available for a cost not exceeding such
amount.
Continued
Salary and Benefits
For a period of six months following the effective time of the
merger, Parent has agreed to cause the surviving corporation and
its subsidiaries to:
provide employees of the Company and its subsidiaries
during their employment:
|
|
|
|
°
|
the same level of base salary as in effect on the closing of the
merger; and
|
|
|
°
|
employee benefit plans, programs, contracts and arrangements,
other than equity-based plans, that are no less favorable, in
the aggregate, than similar employee benefit plans, programs,
contracts and arrangements provided by the Company and its
subsidiaries to Company employees prior to the Closing
Date; and
|
|
|
|
|
|
recognize the service of Company employees with the Company
prior to the closing of the merger as service with Parent and
its affiliates in connection with any tax-qualified pension
plan, 401(k) savings plan, welfare benefit plans and policies
(including vacations and holiday policies) maintained by Parent
or one of its affiliates which is made available following the
closing of the merger by Parent or one of its affiliates for
purposes of any waiting period, vesting, eligibility and benefit
entitlement (but excluding benefit accruals other than in the
case of severance pay and vacation entitlement), except to the
extent such credit would result in a duplication of benefits or
is prohibited under law.
|
51
Special
Committee Fees
In accordance with the resolutions of the board of directors,
each member of the special committee is entitled to receive as
compensation a fee in the amount of $10,000 per month (pro rated
for partial months) from June 15, 2010 until such time as
the special committee is dissolved (as determined by the board
of directors), whether or not the merger occurs.
Accounting
Treatment
The merger will be accounted for as a purchase
transaction for financial accounting purposes.
Material
U.S. Federal Income Tax Consequences of the Merger
The following is a summary of the material U.S. federal
income tax consequences of the merger to U.S. holders (as
defined below) whose shares of the Companys common stock
are converted into the right to receive cash in the merger. This
summary does not purport to consider all aspects of
U.S. federal income taxation that might be relevant to our
stockholders. For purposes of this discussion, we use the term
U.S. holder to mean a beneficial owner of
shares of the Companys common stock that is, for
U.S. federal income tax purposes:
|
|
|
|
|
an individual who is a citizen or resident of the United States;
|
|
|
|
a corporation (or other entity taxable as a corporation for
U.S. federal income tax purposes) created or organized
under the laws of the United States or any of its political
subdivisions;
|
|
|
|
a trust that (i) is subject to the supervision of a court
within the United States and the control of one or more
U.S. persons or (ii) has a valid election in effect
under applicable U.S. Treasury regulations to be treated as
a U.S. person; or
|
|
|
|
an estate that is subject to U.S. federal income tax on its
income regardless of its source.
|
If a partnership (including an entity treated as a partnership
for U.S. federal income tax purposes) holds common stock,
the tax treatment of a partner generally will depend on the
status of the partner and the activities of the partnership. A
partner of a partnership holding common stock should consult the
partners tax advisor regarding the U.S. federal
income tax consequences of the merger to such partner.
This discussion is based upon the Internal Revenue Code of 1986,
as amended, which we refer to in this proxy statement as the
Code, and Treasury regulations, Internal Revenue Service rulings
and judicial decisions now in effect, all of which are subject
to change (possibly with retroactive effect) or different
interpretations. The discussion applies only to beneficial
owners who hold shares of the Companys common stock as
capital assets within the meaning of Section 1221 of the
Code, and does not apply to shares of the Companys common
stock received in connection with the exercise of employee stock
options or otherwise as compensation, stockholders who hold an
equity interest, actually or constructively, in Parent or the
surviving corporation after the merger, stockholders who validly
exercise their rights under the DGCL to object to the merger or
to certain types of beneficial owners who may be subject to
special rules (such as insurance companies, banks, tax-exempt
organizations, financial institutions, broker-dealers,
partnerships, S corporations or other pass-through
entities, mutual funds, traders in securities who elect the
mark-to-market
method of accounting, stockholders subject to the alternative
minimum tax, stockholders that have a functional currency other
than the U.S. dollar or stockholders who hold common stock
as part of a hedge, straddle, constructive sale or conversion
transaction). This discussion also does not address the
U.S. tax consequences to any stockholder who, for
U.S. federal income tax purposes, is a non-resident alien
individual, foreign corporation, foreign partnership or foreign
estate or trust, and does not address the receipt of cash in
connection with the cancellation of options to purchase shares
of the Companys common stock or any other matters relating
to equity compensation or benefit plans. This discussion does
not address any aspect of state, local, foreign, estate or gift
tax laws.
52
Exchange
of Shares of the Companys Common Stock for Cash Pursuant
to the Merger Agreement
The exchange of shares of the Companys common stock for
cash in the merger will be a taxable transaction for
U.S. federal income tax purposes. In general, a
U.S. holder whose shares of the Companys common stock
are converted into the right to receive cash in the merger will
recognize capital gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of
cash received with respect to such shares (determined before the
deduction of any applicable withholding taxes) and the
U.S. holders adjusted tax basis in such shares. A
U.S. holders adjusted tax basis will generally equal
the price the U.S. holder paid for such shares. Gain or
loss will be determined separately for each block of shares of
the Companys common stock (i.e., shares of the
Companys common stock acquired at the same cost in a
single transaction). Such gain or loss will be long-term capital
gain or loss provided that the U.S. holders holding
period for such shares of the Companys common stock is
more than 12 months at the time of the completion of the
merger. Long-term capital gains of non-corporate
U.S. holders recognized in taxable years before
January 1, 2013 are eligible for a maximum tax rate equal
to 15%. There are limitations on the deductibility of capital
losses.
Backup
Withholding and Information Reporting
Backup withholding of tax may apply to cash payments to which a
non-corporate U.S. holder is entitled under the merger
agreement, unless the U.S. holder or other payee provides a
taxpayer identification number, certifies that such number is
correct, and otherwise complies with the backup withholding
rules. Each of our U.S. holders should complete and sign,
under penalty of perjury, the Substitute
Form W-9
included as part of the letter of transmittal that will be sent
promptly after the completion of the merger (but in no event
more than five business days thereafter) and return it to the
paying agent, in order to provide the information and
certification necessary to avoid backup withholding, unless an
exemption applies and is established in a manner satisfactory to
the paying agent.
Backup withholding is not an additional tax. Any amounts
withheld from cash payments to a U.S. holder pursuant to
the merger under the backup withholding rules will be allowable
as a refund or a credit against such U.S. holders
U.S. federal income tax liability provided the required
information is timely furnished to the Internal Revenue Service.
Cash payments made pursuant to the merger will also be subject
to information reporting unless an exemption applies.
The U.S. federal income tax consequences described above are
not intended to constitute a complete description of all tax
consequences relating to the merger. Because individual
circumstances may differ, each stockholder should consult the
stockholders tax advisor regarding the applicability of
the rules discussed above to the stockholder and the particular
tax effects to the stockholder of the merger in light of such
stockholders particular circumstances, the application of
federal, state, local and foreign tax laws, and, if applicable,
the tax consequences of the receipt of cash in connection with
the cancellation of options, restricted stock and/or performance
units, including the transactions described in this proxy
statement relating to our other equity compensation and benefit
plans.
Regulatory
Approvals
Under the terms of the merger agreement, the merger cannot be
completed until the waiting period (and any extension thereof)
applicable to the merger under the HSR Act and any other
applicable foreign competition, merger control, antitrust or
similar law has been terminated or has expired.
Completion of the merger is subject to clearance under
(i) the
Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, or the HSR Act,
(ii) the Competition Act (Canada), R.S.C. 1985, c.
C-34 and regulations thereto, as amended, or the Competition
Act, and (iii) the Canada Transportation Act, 1996, c.10
and regulations thereto, as amended, or the Transportation Act.
Under the HSR Act, and the rules promulgated thereunder by the
Federal Trade Commission, or the FTC, the merger cannot be
completed until each of the Company and Parent file a
notification and report form with
53
the FTC and the Antitrust Division of the Department of Justice,
or the DOJ, under the HSR Act and the applicable
30-day
waiting period has expired or been terminated. The Company and
Parent filed such notification and report forms on
December 21, 2010 and each requested early termination of
the waiting period. Although no extension is anticipated in
connection with the merger, the initial
30-day
waiting period may be extended by the DOJ or FTC through the
issuance of a request for additional information and documentary
materials (so-called Second Request) which will toll
the initial waiting period until Parent and the Company certify
their substantial compliance with the Second Request. After
Parent and the Company substantially comply with the Second
Request, the merger will be subject to an additional
30-day
waiting period and the merger cannot be completed until this
waiting period has expired or been terminated.
Under the Competition Act, the merger cannot be completed until
the parties receive from the Commissioner, in respect of the
merger, an advance ruling certificate, or an ARC, pursuant to
Section 102 of the Competition Act, or a no action
letter indicating that the Commissioner has determined
that she does not at that time intend to make an application for
an order under Section 92 of the Competition Act. In the
event that neither an ARC nor a no action letter is
issued or received, the
30-day
waiting period under Section 123 of the Competition Act
must expire without the issuance of a supplementary information
request, in which case the Company and Parent would be in a
legal position to close under the Competition Act, despite the
non-issuance of an ARC or no-action letter. Where a
supplementary information request is issued, the waiting period
is extended until 30 days after both parties comply with
it, unless an ARC or a no-action letter is issued
before such time. The Company and Parent filed the applicable
pre-merger notification forms on December 21, 2010. Parent
filed a request for an ARC on December 17, 2010.
Under the Transportation Act, the merger cannot be completed
until a notice has been received from the Canadian Minister of
Transport that the merger does not raise issues with respect to
the public interest as it relates to national transportation,
which notice may be issued within an initial 42 day review
period. Further review periods apply where such a notice is not
issued within the initial 42 day review period. The Company
and Parent filed the applicable materials under the
Transportation Act on December 21, 2010.
Notwithstanding the regulatory filing requirements under the HSR
Act, the Competition Act and the Transportation Act, Parent has
agreed that it will sell or otherwise dispose of, hold separate,
or divest itself of all or any portion of the business or assets
of the Company or its subsidiaries to eliminate any impediment
that may be asserted under any law governing competition,
monopolies or restrictive trade practices.
At any time before or after consummation of the merger,
notwithstanding the termination or expiration of the waiting
period under the HSR Act, the DOJ or the FTC could take such
action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin
the completion of the merger or seeking divestiture of
substantial assets of the Company or Parent. At any time before
or after the completion of the merger, and notwithstanding the
termination or expiration of the waiting period under the HSR
Act, any state could take such action under antitrust laws as it
deems necessary or desirable in the public interest as it
relates to national transportation. Such action could include
seeking to enjoin the completion of the merger or seeking
divestiture of substantial assets of the Company or Parent.
Private parties may also seek to take legal action under
antitrust laws under certain circumstances.
At any time before or within one year of the consummation of the
merger, notwithstanding the waiver or expiration of the waiting
period under the Competition Act, the Commissioner of
Competition could take such action under the Competition Act as
she deems necessary or desirable to avoid a prevention or
lessening, or likely prevention or lessening, of competition
substantially in any relevant market, including seeking to
enjoin the completion of the merger or seeking divestiture of
substantial assets of the Company or Parent. At any time before
the consummation of the merger, the Minister of Transport,
Infrastructure and Communities could take such action under the
Canada Transportation Act as he deems necessary or desirable in
the public interest. Such action could include enjoining the
completion of the merger or seeking revisions to the merger to
address any public interest concerns.
There can be no assurance as to the absence of any litigation
challenging the regulatory approvals described above. There can
also be no assurance that the DOJ, the FTC, or any other
governmental entity or
54
any private party will not attempt to challenge the merger on
antitrust grounds, and, if such a challenge is made, there can
be no assurance as to its result.
Litigation
Relating to the Merger
To the Companys knowledge, there is no pending litigation
against the merger. On October 19, 2010, a putative class
action petition was filed in the District Court of Dallas
County, Texas, challenging the proposed transaction announced on
October 1, 2010, by which DashNow Acquisition Corp. and
DashNow Holding Corp. would acquire the Company. We refer to
this transaction as the prior proposed transaction. On
November 10, 2010, an amended petition was filed. In this
action challenging the prior proposed transaction, styled
Kaner v. Welch et al.,
No. 10-13845
(298th Judicial District Court), the plaintiff purports to
bring the action on behalf of the public stockholders of the
Company and seeks, among other things, an order enjoining the
consummation of the prior proposed transaction and awarding the
plaintiff fees and costs. In the amended petition, the plaintiff
alleges that our directors breached their fiduciary duties, by,
among other things, allegedly failing to engage in an honest and
fair sale process. The amended petition also alleges that the
disclosures contained in the October 29, 2010 preliminary
proxy are incomplete
and/or
materially misleading. The amended petition further alleges that
the Company, DashNow Acquisition Corp. and DashNow Holding Corp.
aided and abetted the directors purported breaches.
Our current deadline to respond to the amended petition is
January 21, 2011. On November 9, 2010, the plaintiff
filed a motion seeking expedited proceedings and discovery. That
motion is currently set for hearing on January 6, 2011. The
Company believes that the claims asserted in the Kaner
action are without merit and intends to vigorously defend the
action.
55
THE
MERGER AGREEMENT
The following summary describes the material terms of the
merger agreement but does not purport to describe all of the
terms of the merger agreement. This summary of the merger
agreement is qualified by reference to the full text of the
merger agreement, a copy of which is attached as
Annex A, and is incorporated by reference
into, this proxy statement. The merger agreement has been
included to provide you with information regarding its terms. We
encourage you to read the merger agreement carefully and in its
entirety because it is the legal document that governs the
merger. It is not intended to provide you with any factual
information about us. Such information can be found elsewhere in
this proxy statement and in the public filings we make with the
SEC, as described in the section entitled, Where You Can
Find More Information, beginning on page 80 of this
proxy statement.
The
Merger
The merger agreement provides for the merger of Merger Sub with
and into the Company upon the terms and subject to the
conditions set forth in the merger agreement. As the surviving
corporation, the Company will continue to exist following the
merger.
Closing
The closing of the merger will take place no later than the
fourth business day following the date on which the conditions
to the closing of the merger (described in the section entitled
The Merger Agreement Conditions to the
Merger beginning on page 67 of this proxy statement)
have been satisfied or waived (other than the conditions that by
their nature are to be satisfied at the closing of the merger,
but subject to the fulfillment or waiver of those conditions),
unless another date is agreed to in writing by Parent and the
Company.
Effective
Time
The effective time of the merger will occur upon the filing of a
certificate of merger with the Secretary of State of the State
of Delaware (or at such later date as we and Parent may agree
and specify in the certificate of merger).
Directors
and Officers of Surviving Corporation
The board of directors of the surviving corporation will, from
and after the effective time of the merger, consist of the
directors of Merger Sub until their successors have been duly
elected or appointed and qualified or until their earlier death,
resignation or removal. The officers of the Company at the
effective time of the merger will, from and after the effective
time of the merger, be the officers of the surviving corporation
until their successors have been duly appointed and qualified or
until their earlier death, resignation or removal.
Organizational
Documents of Surviving Corporation
The certificate of incorporation of the surviving corporation
will be in the form of the certificate of incorporation of
Merger Sub (except with respect to the name of the Company),
until amended in accordance with its terms or by applicable law.
The bylaws of the surviving corporation will be in the form of
the bylaws of Merger Sub (except with respect to the name of the
Company) until amended in accordance with the merger agreement
or by applicable law.
Effect of
the Merger on the Capital Stock of the Parties
At the effective time of the merger,
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each issued and outstanding share of capital stock of Merger Sub
will become one share of the Companys common stock of the
surviving corporation;
|
56
|
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|
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any shares of the Companys common stock that are owned by
us as treasury stock or by Parent or Merger Sub will be canceled
and no consideration will be delivered in exchange for those
shares; and
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each issued and outstanding share of the Companys common
stock (other than those canceled as above and shares of the
Companys common stock of stockholders who have properly
exercised appraisal rights) will be converted into the right to
receive $25.00 in cash, without interest and less any applicable
withholding taxes, which we refer to as the per share
merger consideration.
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Shares of the Companys common stock owned by stockholders
who have perfected and not withdrawn a demand for, or lost the
right to, appraisal rights under the DGCL will be cancelled
without payment of the per share merger consideration. Such
stockholders will instead be entitled to the appraisal rights
provided under the DGCL as described in the section entitled
Appraisal Rights beginning on page 72 of this
proxy statement.
Exchange
and Payment Procedures
As soon as practicable following the effective time of the
merger, Parent will deposit, or will cause to be deposited, with
the paying agent a cash amount necessary for the paying agent to
make payment of the aggregate per share merger consideration to
the holders of shares of the Companys common stock.
Not later than five business days after the effective time of
the merger, each record holder of shares of the Companys
common stock will be sent a letter of transmittal and
instructions describing how the stockholder may exchange his,
her or its shares of the Companys common stock for the per
share merger consideration promptly after the completion of the
merger.
You should not return your stock certificates with the
enclosed proxy card, and you should not forward your stock
certificates to the paying agent without a letter of
transmittal.
You will not be entitled to receive the per share merger
consideration until you deliver a duly completed and validly
executed letter of transmittal to the paying agent. If your
shares are certificated, you must also surrender your stock
certificate or certificates to the paying agent along with your
letter of transmittal.
No interest will be paid or accrued on the cash payable as the
per share merger consideration. Parent, the surviving
corporation and the paying agent will be entitled to deduct and
withhold any applicable taxes from the per share merger
consideration. Any amount that is withheld and paid over to the
appropriate taxing authority will be deemed to have been paid to
the person with regard to whom it is withheld.
From and after the effective time of the merger, there will be
no transfers on our stock transfer books of shares of the
Companys common stock that were outstanding immediately
prior to the effective time of the merger. If, after the
effective time of the merger, any person presents to the
surviving corporation any certificates for any reason, such
certificates must be cancelled and exchanged for the per share
merger consideration as provided above to the extent that the
per share merger consideration has not already been paid in
respect of the shares of the Companys common stock
represented by such certificates.
Any portion of the per share merger consideration deposited with
the paying agent that remains unclaimed by former record holders
of the Companys common stock nine months after the
effective time of the merger will be delivered to the surviving
corporation. Record holders of the Companys common stock
who have not complied with the above-described exchange and
payment procedures will thereafter only look to Parent and the
surviving corporation for payment of the per share merger
consideration. None of the surviving corporation, Parent or the
paying agent will be liable to any person for any cash delivered
to a public official pursuant to any applicable abandoned
property, escheat or other similar laws.
If you have lost a certificate, or if it has been stolen or
destroyed, then before you will be entitled to receive the per
share merger consideration, you must make an affidavit of the
loss, theft or destruction, and if required by Parent, post a
bond in an amount sufficient to provide a full indemnity against
any claim that may be made against it with respect to such
certificate. These procedures will be described in the letter of
transmittal that you will receive, which you should read
carefully in its entirety.
57
Company
Stock Options; Other Equity Awards
Options
At the effective time of the merger, each outstanding option
will be cancelled and terminated and converted into the right to
receive cash equal to the excess, if any, of the per share
merger consideration over the exercise price payable in respect
of the Companys common stock issuable under such option.
Restricted
Stock
At the effective time of the merger, all restrictions and
conditions on each outstanding share of restricted stock granted
under our Amended and Restated 1996 Stock Option Plan and our
2008 Equity Compensation Plan, other than restricted stock
granted under existing plans on September 24, 2010, will
immediately lapse as of, and conditioned upon, the closing of
the merger, and the restricted stock will be converted into the
right to receive the per share merger consideration.
Performance
Units
At the effective time of the merger, each outstanding
performance unit granted under our Amended and Restated 1996
Stock Option Plan and our 2008 Equity Compensation Plan, other
than certain performance units granted under existing plans on
September 24, 2010, will automatically vest in accordance
with the terms of the applicable award agreement and plan
document and be settled (i) in the Companys common
stock, which will be converted into the right to receive the per
share merger consideration, or (ii) to the extent permitted
by the applicable award agreement or plan document, in cash by
the surviving corporation on the date of the closing of the
merger.
Representations
and Warranties
We made customary representations and warranties in the merger
agreement that are subject, in some cases, to specified
exceptions and qualifications contained in the merger agreement,
in the disclosure schedules to the merger agreement or, subject
to certain exception, in certain documents filed with the SEC.
These representations and warranties relate to, among other
things:
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corporate matters, including our due organization, existence,
good standing and requisite corporate power;
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our capitalization;
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our corporate power and authority to execute, and consummate the
transactions under, the merger agreement, and the enforceability
of the merger agreement against us;
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the approval and declaration of the advisability of the merger
agreement and the merger by our board of directors, the
determination that the merger agreement and the merger are fair
to, and in the best interests of, us and our stockholders and
the resolution to recommend that our stockholders adopt the
merger agreement;
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the absence of violations of, or conflicts with, our governing
documents, applicable law and certain agreements as a result of
our entering into and performing our obligations under the
merger agreement;
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the vote of our stockholders required to adopt the merger
agreement and approve the transactions contemplated by the
merger agreement;
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required governmental consents, approvals and filings;
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the timely filing of required reports and other filings with the
SEC since July 31, 2007, material compliance of our filings
with securities laws and our financial statements with
accounting standards, and maintenance of internal controls;
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the absence of (i) claims regarding our accounting
practices and securities laws and (ii) employee reports of
violations of laws;
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the absence of certain undisclosed liabilities;
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the conduct of our business in the ordinary course of business
consistent with past practice and the absence of a Company
material adverse effect (defined below) since July 31, 2010;
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the absence of any pending or threatened investigation, legal or
administrative proceeding or action that would reasonably be
expected to have a material adverse effect on the Company;
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compliance with applicable laws and possession of required
licenses and permits;
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the absence of untrue statements of material fact or omissions
of material fact in information contained in certain filings;
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tax matters;
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employee benefits and labor matters;
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environmental matters;
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intellectual property;
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material contracts and the absence of any default under any
material contract;
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real property, including title to, or leasehold interests in,
real property;
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insurance;
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the absence of certain unlawful payments;
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the receipt of an opinion from Stephens;
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the absence of any undisclosed brokers or advisor fees;
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the absence of the applicability of antitakeover statutes to the
merger;
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the compliance of our contracts with independent contractors
with certain applicable laws; and
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the absence of any confidentiality agreement which would
prohibit us from providing certain information to Parent.
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Many of our representations and warranties made in the merger
agreement are qualified by a material adverse effect standard.
For purposes of the merger agreement, material adverse
effect means any change, event, occurrence or effect which
has had or would reasonably be expected to have a material
adverse effect on the results of operations, condition
(financial or otherwise), business, assets or liabilities of the
Company and our subsidiaries, taken as a whole; provided,
however, that none of the following will constitute a material
adverse effect:
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changes, events, occurrences or effects generally affecting:
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the industry of the Company and our subsidiaries (provided that
such changes, events, occurrences or effects do not
disproportionately affect us and our subsidiaries); or
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the economy, or financial or capital markets, including changes
in interest or exchange rates; or
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changes, events, occurrences or effects arising out of,
resulting from or attributable to:
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changes in law, GAAP or in accounting standards, or changes in
general legal, regulatory or political conditions;
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acts of war, sabotage or terrorism, or any escalation or
worsening of any such acts of war, sabotage or terrorism
threatened or underway as of December 14, 2010;
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earthquakes, hurricanes, tornadoes or other natural disasters;
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the negotiation, execution, announcement or performance of the
merger agreement or the consummation of the merger, including
the impact thereof on our relationships with customers,
suppliers,
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distributors, partners or employees, or any litigation arising
from allegations of breach of fiduciary duty or violation of
laws relating to the merger agreement or the merger;
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any action taken by the Company or our subsidiaries as
contemplated by the merger agreement or with Parents
consent, or any failure by the Company to take any action as a
result of restrictions contained in the merger agreement; or
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any decline in the market price, or change in trading volume, of
the capital stock of the Company or any failure to meet publicly
announced revenue or earnings projections (except that the facts
and circumstances giving rise to such change in market price or
trading volume or failure to meet projections that are not
otherwise excluded from the definition of material adverse
effect may be taken into account in determining whether
there has been a material adverse effect);
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provided, that the exceptions provided in the first three
sub-bullet
points immediately above do not disproportionately affect the
Company and our subsidiaries.
Material adverse effect also means any change,
event, occurrence or effect which would reasonably be expected
to materially impair the ability of the Company to perform our
obligations under the merger agreement or prevent or materially
delay the consummation of the merger.
The merger agreement also contains customary representations and
warranties made by Parent and Merger Sub that are subject, in
some cases, to specified exceptions and qualifications contained
in the merger agreement. The representations and warranties of
Parent and Merger Sub relate to, among other things:
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corporate matters, including their due organization, existence
and good standing;
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their corporate power and authority to execute, and consummate
the transactions under, the merger agreement, and the
enforceability of the merger agreement against them;
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the absence of violations of, or conflicts with, their governing
documents, applicable law and certain agreements as a result of
entering into and performing their obligations under the merger
agreement;
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required governmental consents, approvals and filings;
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the absence of untrue statements of material fact or omissions
of material fact in information provided for certain filings;
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the ownership and operations of Merger Sub;
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sufficiency of funds to consummate the merger;
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solvency of the surviving corporation immediately following
consummation of the merger;
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the absence of certain agreements between Parent and Merger Sub,
on the one hand, and any member of our management or directors,
on the other hand;
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the absence of pending or threatened legal proceedings against
Parent and Merger Sub; and
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the absence of any undisclosed brokers or advisors
fees.
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The representations and warranties in the merger agreement of
each of the Company, Parent and Merger Sub will terminate upon
the consummation of the merger or the termination of the merger
agreement pursuant to its terms, except that any provision in
the merger agreement which contemplates performance after the
effective time of the merger will survive indefinitely,
including certain provisions regarding exchange of stock
certificates, indemnification and insurance, fees and expenses
and employee matters.
Stockholders
Meeting
We agreed to establish a record date for, call, give notice of,
convene and hold a meeting of our stockholders for the purpose
of obtaining stockholder approval of the merger agreement.
Subject to the provisions of the merger agreement described in
the section entitled The Merger Agreement No
Solicitation of Takeover Proposals beginning on
page 62 of this proxy statement, the board of directors
will recommend
60
that our stockholders vote to adopt the merger agreement. We may
adjourn or postpone the stockholders meeting to the extent
necessary to ensure that any required supplement or amendment to
this proxy statement is provided to our stockholders or, if as
of the time for which the stockholders meeting is
originally scheduled there are insufficient shares of the
Companys common stock represented to constitute a quorum
necessary to conduct business at such meeting.
Conduct
of Our Business Pending the Merger
Under the merger agreement, we have agreed that, subject to
certain exceptions in the merger agreement or as required by
applicable law or as contemplated by the disclosure schedules to
the merger agreement, between December 14, 2010 and the
effective time of the merger, unless Parent gives its consent
(which, in certain cases, will not be unreasonably withheld or
delayed), we and our subsidiaries will conduct our business in
all material respects in the ordinary course of business
consistent with past practice, comply in all material respects
with applicable laws and the Companys material contracts,
and use our commercially reasonable efforts to preserve intact
our business organization and the goodwill of those having
business relationships with us and retain the services of our
present officers and key employees, so that our goodwill and
ongoing business will be unimpaired at the effective time of the
merger.
Subject to certain exceptions set forth in the merger agreement
and the disclosure schedules to the merger agreement, between
December 14, 2010 and the effective time of the merger we
will not, and we will not permit our subsidiaries to:
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subject to certain exceptions, (i) issue, sell or grant any
shares of our capital stock (or securities convertible into,
exchangeable or exercisable for, capital stock, or any rights,
warrants or options to purchase shares of capital stock),
(ii) redeem, purchase or otherwise acquire any shares of
our outstanding capital stock, (iii) declare, set aside
payment for or pay any dividend or (iv) split, combine,
subdivide or reclassify any share of our capital stock;
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subject to certain exceptions, incur or assume any indebtedness;
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subject to certain exceptions, sell, transfer, lease, mortgage
or encumber any of our properties or assets that are material to
us and our subsidiaries taken as a whole;
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make capital expenditures except as budgeted in our current
capital expenditure plan;
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make acquisitions of the capital stock or assets of any other
entity for consideration in excess of $2,000,000;
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subject to certain exceptions, make any investment in, or loan
or advance to, any person or entity other than a direct
subsidiary of the Company in the ordinary course of business
consistent with past practice;
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terminate or amend any of the Companys material contracts
or enter into any contract that would be material to the Company
or that would be breached by, or require the consent of any
third party in order to continue in full force following, the
merger, other than in the ordinary course of business consistent
with past practice;
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subject to certain exceptions, increase the compensation of any
director, officer, or employee or enter into, amend or terminate
any employment agreement or benefit plan with any current or
former stockholder, director, officer, other employee or
affiliate;
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make elections or certain changes relating to taxes or tax
returns;
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make changes in financial accounting methods, principles or
practices, except as required by GAAP or applicable law;
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amend our or our subsidiarys governing documents;
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adopt a plan or agreement of liquidation, restructuring, merger
or other reorganization, other than transactions exclusively
between our wholly-owned subsidiaries;
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pay or settle any liabilities, other than those reflected in our
most recent financial statements included in documents filed
with the SEC or incurred since the date of those financial
statements in the ordinary course of business or that do not
require the payment by us or our subsidiaries of $100,000 for
any such payment or settlement or $500,000 for all such payments
and settlements;
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issue any broadly distributed communication to employees or
customers without the prior approval of Parent, except for those
in the ordinary course of business consistent with past practice
not relating to the merger;
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subject to certain exceptions, settle any legal action or
investigation;
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amend the terms of any contract with an independent contractor
to increase the amounts payable under such contract, other than
in the ordinary course of business consistent with past
practice; or
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agree to take any of the foregoing actions.
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No
Solicitation of Takeover Proposals
From and after the date of the merger agreement, we and our
subsidiaries and representatives agreed to cease any
solicitation, encouragement, discussions or negotiations with
any persons that were ongoing with respect to any takeover
proposal and with any persons who made or indicated an intention
to make a takeover proposal and request that such persons
promptly return or destroy all confidential information
concerning the Company and our subsidiaries. From and after date
of the merger agreement until the effective time of the merger
or, if earlier, the termination of the merger agreement, we, our
subsidiaries and our representatives may not, directly or
indirectly:
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solicit, initiate or knowingly facilitate or encourage
(including by way of furnishing non-public information) any
inquiry regarding or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, a
takeover proposal;
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engage in, continue or otherwise participate in discussions or
negotiations regarding, or furnish to any other party
information in connection with or for the purpose of encouraging
or facilitating any takeover proposal;
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approve, endorse or recommend any takeover proposal;
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enter into any letter of intent, agreement or agreement in
principal or other contract with respect to any takeover
proposal; or
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propose to do any of the foregoing.
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Notwithstanding the foregoing, at any time on or after date of
the merger agreement and prior to the time our stockholders
adopt the merger agreement, if the Company receives a bona
fide written unsolicited takeover proposal from any person
that did not result from a breach of the merger agreement, and
if our board of directors, prior to taking any action described
below, determines in good faith after consultation with
independent financial advisors and outside legal counsel that
(i) failure to take action would violate the
directors fiduciary duties to our stockholders and
(ii) the takeover proposal either constitutes a superior
proposal or is reasonably likely to result in a superior
proposal, we may:
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furnish to such third party requested information pursuant to a
confidentiality agreement (provided that, within 24 hours,
we provide to Parent any material non-public information
provided orally and any non-public information provided in
writing to any person given such information which was not
previously provided to Parent or its representatives); and
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engage in and otherwise participate in discussions or
negotiations with the person (provided that, within
24 hours, we notify Parent of the identity of the party
that submitted the takeover proposal).
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Following the date of the merger agreement, we must keep Parent
reasonably informed of material developments, discussions or
negotiations regarding any takeover proposal on a current basis
and provide to
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Parent within 24 hours (i) a written summary of the
terms of any takeover proposal not made in writing and
(ii) copies of any written materials provided by any person
making a takeover proposal.
Except as permitted by the merger agreement, our board of
directors may not (i) fail to recommend the merger to our
stockholders or fail to include the recommendation in the proxy
statement, (ii) change, qualify, withhold, withdraw or
modify (or publicly propose to do so), in a manner adverse to
Parent, its recommendation to our stockholders that the
stockholders adopt the merger agreement, (iii) take any
action or make any recommendation or public statement in
connection with a tender offer or exchange offer other than a
recommendation against such offer or a temporary stop,
look and listen communication by the board of directors,
(iv) adopt, approve or recommend to our stockholders a
takeover proposal, (v) authorize the Company to enter into
any agreement with respect to a takeover proposal or
(vi) terminate the merger agreement in order to enter into
an agreement with respect to a takeover proposal. However, prior
to the time our stockholders adopt the merger agreement, our
board of directors may effect a change of recommendation or
terminate the merger agreement in order to enter into an
agreement with respect to a takeover proposal if, prior to
taking such action, our board of directors determines in good
faith, after consultation with independent financial advisors
and outside legal counsel, that (i) failure to do so would
violate the directors fiduciary duties to our stockholders
and (ii) the takeover proposal constitutes a superior
proposal. In the case of any change of recommendation that is
the result of a superior proposal or termination of the merger
agreement by us to enter into an agreement with respect to a
superior proposal:
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we must provide at least four business days prior written
notice to Parent of our intention to effect a change of
recommendation or terminate the merger agreement to enter into
an agreement with respect to a superior proposal specifying the
material terms and conditions of any such superior proposal,
including the identity of the person making such superior
proposal;
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we must provide a copy to Parent of the relevant proposed
transaction agreements with the party making such proposal;
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prior to taking any such action, we must negotiate during the
four business day notice period with Parent in good faith (to
the extent Parent desires to negotiate) to enable Parent to
revise the terms of the merger agreement such that it would
cause such superior proposal not to constitute a superior
proposal;
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our board of directors must have considered in good faith any
changes to the merger agreement proposed in writing by Parent
and must have determined that the superior proposal would still
constitute a superior proposal if such changes were given
effect; and
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we must deliver to Parent any change to the terms of a superior
proposal other than changes that are, individually or in the
aggregate, inconsequential and, in such case, provide Parent an
additional four business days prior written notice and
comply with the provisions above.
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Except to the extent provided in certain provisions of the
merger agreement, nothing in the provisions of the merger
agreement relating to takeover proposals prevents us from
complying with our disclosure obligations under
U.S. federal or state law with regard to a takeover
proposal, including taking and disclosing to our stockholders a
position contemplated by
Rule 14e-2(a),
Rule 14d-9
or Item 1012(a) of
Regulation M-A
under the Exchange Act.
For purposes of the merger agreement, takeover
proposal means any inquiry, proposal or offer from any
person or group with respect to any (i) acquisition of
assets of the Company and our subsidiaries equal to more than
20% of the Companys consolidated assets or to which more
than 20% of the Companys revenues or earnings on a
consolidated basis are attributable, (ii) acquisition of
more than 20% of the Companys outstanding common stock,
(iii) tender offer or exchange offer that if consummated
would result in any person beneficially owning more than 20% of
the Companys outstanding common stock, (iv) merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving the Company or (v) any combination of
the foregoing if the sum of the percentage of consolidated
assets, consolidated revenues or earnings and the Companys
common stock involved is more than 20%, in each case, other than
the transactions contemplated by the merger agreement.
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Superior proposal means any bona fide written
takeover proposal (i) that includes consideration per share
of the Companys common stock that is greater than the per
share merger consideration and that the board of directors has
determined in its good faith judgment (after consultation with
independent financial advisors and outside legal counsel) is
reasonably likely to be consummated in accordance with its terms
without unreasonable delay, taking into account all legal,
regulatory and financial aspects of the proposal (including
certainty of financing) and the person making the proposal, and
if consummated, would result in a transaction more favorable to
our stockholders from a financial point of view than the
transaction contemplated by the merger agreement (including any
changes to the terms of the merger agreement proposed by Parent
in response to such proposal or otherwise) and
(ii) accompanied by executed customary financing
commitments from recognized financing sources not subject to any
due diligence conditions and that, together with available cash,
are sufficient to fund the cash portion of such takeover
proposal; provided that for purposes of the definition of
superior proposal, the references to 20% in the
definition of takeover proposal will be deemed references to 50%.
Agreement
to Use Commercially Reasonable Efforts
We and Parent will cooperate and use our respective commercially
reasonable efforts to promptly take or cause to be taken all
actions and do or cause to be done all things necessary, proper
or advisable to cause the conditions to closing to be satisfied
and to consummate the merger and the other transactions
contemplated by the merger agreement in the most expeditious
manner practicable and to prepare and file promptly and fully
all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of
information, applications and other documents (including
effecting the regulatory filings under applicable antitrust
laws) and obtain all approvals, consents, expirations of waiting
periods, registrations, permits, authorizations and other
confirmations from any governmental authority or third party
necessary, proper and advisable to consummate the transactions
contemplated by the merger agreement.
We and Parent agreed to make a filing pursuant to the HSR Act
and all applicable foreign antitrust laws with respect to the
transactions contemplated by the merger agreement within five
business days of the date of the merger agreement and use
commercially reasonable efforts to supply as promptly as
practicable any additional information that may be requested
necessary to cause the expiration or termination of the waiting
periods under the HSR Act and all applicable foreign antitrust
laws.
We and Parent also agreed, subject to certain exceptions, to use
commercially reasonable efforts to:
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take all action necessary to ensure that no state takeover
statute applies to the merger;
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if any state takeover statute becomes applicable to the merger,
ensure that the merger may be consummated as promptly as
practicable on the terms contemplated by the merger agreement;
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cooperate in all respects with each other in connection with any
filing or submission with a governmental authority in connection
with the transactions contemplated by the merger agreement and
in any investigation or other inquiry by a governmental
authority (including any legal action initiated by a private
party) and to contest or resist any legal action by or before
any government authority (including any securityholder
litigation arising as a result of the transactions contemplated
by the merger agreement) and to have vacated, lifted, reversed
or overturned any order that is in effect and that prohibits,
prevents or restricts the consummation of the transactions
contemplated by the merger agreement; and
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keep the other party informed in all material respects and on a
reasonably timely basis of any material communication received
by such party from, or given by such party to, the FTC, the DOJ,
the Canadian Competition Bureau or any other governmental
authority and of any material communication received or given in
connection with any proceeding by a private party, regarding the
transactions contemplated by the merger agreement.
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Parent and its affiliates are also obligated to sell or
otherwise dispose of, hold separate (through the establishment
of a trust or otherwise), or divest itself of all or any portion
of the business or assets of the
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Company or our subsidiaries to eliminate any impediment that may
be asserted under any law governing competition, monopolies or
restrictive trade practices.
Parent will pay all fees associated with the filings made by
Parent, Merger Sub and the Company in accordance with this
covenant.
Termination
of the Companys Credit Facility
The Company has agreed to use commercially reasonable efforts to
obtain such consents, approvals, authorizations and instruments
which may be reasonably requested by Parent or Merger Sub in
connection with the termination of its credit facility at the
effective time of the merger, including customary payoff
letters, lien releases and instruments of termination or
discharge.
Other
Covenants and Agreements
Public
Announcements
The parties agreed that the initial press release with respect
to the execution of the merger agreement would be a joint press
release to be agreed upon by Parent and the Company. We and
Parent agreed not to issue any further public announcement with
respect to the merger without the prior consent of the other
party, except as required by law or agreement with the Nasdaq
Stock Market LLC or the Toronto Stock Exchange as determined in
the good faith judgment of the party proposing to make such
public announcement.
Access
to Information; Confidentiality
We agreed to give Parent and its representatives reasonable
access during normal business hours to our properties, books,
contracts, commitments, records, correspondence, officers,
employees, accountants, counsel, financial advisors and other
representatives. We also agreed to furnish to Parent a copy of
each report filed pursuant to securities laws, communications
received from the SEC and all other information concerning our
business, properties and personnel as Parent reasonably
requests. Neither the Company nor our subsidiaries are obligated
to provide any such access or information to the extent that it
would (x) require disclosure by the Company or such
subsidiary of information subject to attorney-client privilege,
(y) conflict with confidentiality obligations to which the
Company or such subsidiary is bound, or (z) violate any
applicable laws (including antitrust laws); provided that this
does not limit the obligation of the Company to promptly (and in
any event within 24 hours) provide to Parent any material
non-public information provided orally and any non-public
information provided in writing, in each case concerning the
Company or our subsidiaries that is provided to any person
pursuant to the merger agreement which was not previously
provided to Parent or its representatives. Parent and its
representatives will hold information received from us pursuant
to this covenant in confidence.
Notification
of Certain Matters
We and Parent agreed to give prompt notice to the other of
(i) notices or communications received from governmental
authorities in connection with the merger or from any person or
entity alleging that its consent is required for the merger,
(ii) proceedings commenced or threatened relating to the
merger, (iii) the discovery of facts or circumstances that
would make any representation or warranty that is qualified as
to materiality or material adverse effect to be untrue and that
is not so qualified to be untrue in any material respect and
(iv) any material failure of that party to comply with a
covenant under the merger agreement. However, the parties agreed
that the delivery of any notice pursuant to this covenant will
not cure a breach of other provisions of the merger agreement or
limit the remedies available to the party receiving notice.
Indemnification;
Directors and Officers Insurance
From and after the effective time of the merger, (i) until
six years after the effective time of the merger or, if longer,
until all claims for indemnification in respect of any claims
made prior to the end of such six year period have been finally
resolved, Parent and the surviving corporation will
(a) indemnify and hold
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harmless our present and former directors and officers against
all claims, liabilities, losses, damages, judgments, fines,
penalties, costs (including amounts paid in settlement or
compromise) and reasonable expenses (including reasonable fees
and expenses of legal counsel) in connection with any claim,
suit, action, proceeding or investigation (whether civil,
criminal, administrative or investigative), whenever asserted,
based on or arising out of the fact that a director or officer
was a director or officer of the Company or our subsidiaries (or
acts or omissions by a director or officer in his capacity as a
director, officer, employee or agent of the Company or such
subsidiary or taken at the request of the Company or such
subsidiary) at or prior to the effective time of the merger
(including in connection with the merger agreement or the
transactions contemplated by the merger agreement) to the
fullest extent permitted by law and (b) advance to such
present and former directors and officers all such expenses that
are incurred to the fullest extent permitted by law, and
(ii) Parent will assume all obligations of the Company and
our subsidiaries to our present and former directors and
officers in respect of indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the
effective time of the merger as provided in our governing
documents and our indemnification agreements with our present or
former directors and officers. From and after the effective time
of the merger until six years after the effective time of the
merger or, if longer, until all claims for indemnification in
respect of any claims made prior to the end of such six year
period have been finally resolved, Parent will cause the
certificate of incorporation and by-laws of the surviving
corporation to contain provisions no less favorable to our
present and former directors and officers with respect to
limitation of liability and indemnification than those set forth
in the merger agreement and our governing documents as of the
date of the merger agreement, which provisions will not be
amended, repealed or otherwise modified in a manner that would
adversely affect the rights of our present and former officers
and directors.
At our election, (i) we may obtain prior to the effective
time of the merger a tail insurance policy with a
claims period of at least six years from the effective time of
the merger with respect to the directors and
officers liability insurance in amount and scope no less
favorable than our existing policy for claims arising from facts
or events that occurred on or prior to the effective time of the
merger at a cost that does not exceed 250% of the annual premium
currently paid by the Company for directors and
officers insurance or (ii) Parent will provide or
cause the surviving corporation to provide, for at least six
years after the effective time of the merger, our present and
former directors and officers who are insured under our current
directors and officers liability insurance with an
insurance and indemnification policy that provides coverage for
events occurring at or prior to the effective time of the merger
that is no less favorable than our existing policy. However,
Parent and the surviving corporation are not required to pay in
excess of 250% of the annual premium currently paid by the
Company for such insurance and if the annual premiums of such
insurance coverage exceed 250% of the annual premium currently
paid, Parent or the surviving corporation will be obligated to
obtain a policy with the greatest coverage available for a cost
not exceeding such amount.
The present and former directors and officers of the Company
will have the right to enforce the provisions of the merger
agreement relating to their indemnification. If Parent or the
surviving corporation assigns, transfer or conveys all of its
properties and assets to any person, then proper provision must
be made so that the successors and assigns of Parent and the
surviving corporation assume all of the above indemnity
obligations. If any action is made against any of our former
directors or officers on or prior to the sixth anniversary of
the effective time of the merger, the above indemnity provisions
will continue in effect until the final disposition of the
action.
Securityholder
Litigation
We agreed to give Parent the opportunity to participate in the
defense or settlement of any securityholder litigation against
us and/or
our directors relating to the merger and not to settle that
securityholder litigation without Parents consent.
Fees
and Expenses
Except as otherwise specified in the merger agreement, all fees
and expenses incurred in connection with the merger agreement,
the merger and the other transactions contemplated by the merger
agreement will be
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paid by the party incurring the fees or expenses, whether or not
the merger and the other transactions contemplated by the merger
agreement are consummated.
Section 16
Matters
We agreed to take all steps reasonably requested by any party to
the merger agreement to cause dispositions of our equity
securities pursuant to the merger by each individual who is a
director or officer of the Company to be exempt under
Rule 16b-3
promulgated under the Exchange Act to the extent permitted by
law.
Employee
Benefit Matters
Parent agreed to, for a period of six months immediately
following the closing of the merger, cause the surviving
corporation and its subsidiaries to provide employees of the
Company and our subsidiaries during their employment with the
same level of base salary in effect on the date of the closing
of the merger and employee benefit plans, programs, contracts
and arrangements, other than equity-based plans, that are no
less favorable, in the aggregate, than similar employee benefit
plans, programs, contracts and arrangements provided by the
Company and our subsidiaries prior to the closing of the merger.
Parent will recognize the service of our employees prior to the
date of the closing of the merger as service with Parent in
connection with any tax-qualified pension plan, 401(k) savings
plan, welfare benefits plans and policies maintained by Parent
which is made available following the closing of the merger for
purposes of vesting or eligibility.
Parent agreed to (i) waive, or cause its insurance carriers
to waive, all limitations as to pre-existing and at-work
conditions, if any, with respect to participation and coverage
requirements applicable to our employees under any welfare
benefit plan made available to our employees following the
closing to the same extent as under any similar type of plan
applicable to our employees prior the closing and
(ii) provide credit to our employees for any co-payments,
deductibles and
out-of-pocket
expenses paid by such employees under the employee benefit
plans, programs and arrangements during the portion of the
relevant plan year including the date of the closing of the
merger.
Conditions
to the Merger
The respective obligations of the Company, Parent and Merger Sub
to effect the merger are subject to the satisfaction (or waiver,
if permissible under applicable law) of the following conditions:
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the approval of the adoption of the merger agreement by holders
of a majority of the outstanding shares of the Companys
common stock;
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the termination or expiration of the waiting period applicable
to the merger under the HSR Act and any other applicable
antitrust law, and the receipt of the approvals and consents
required under foreign antitrust laws (including the
Transportation Act and the Competition Act); and
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no law, injunction, judgment or ruling enacted, promulgated,
issued, entered, amended or enforced by any governmental
authority is in effect enjoining, restraining, preventing or
prohibiting the consummation of the merger or making the
consummation of the merger illegal.
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The obligations of Parent and Merger Sub to effect the merger
are also subject to the satisfaction (or waiver, if permissible
under applicable law) of the following additional conditions:
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our representations and warranties regarding (i) our
authority to enter into the merger agreement, the approval of
the merger agreement by our board of directors, the vote of our
stockholders necessary to approve the merger agreement, the fair
presentation of our financial position and results of operations
in our financial statements, the absence of certain undisclosed
liabilities, the absence of a material adverse effect on the
Company, the opinion of Stephens, brokers and
advisors fees and antitakeover statutes must be true and
correct as of the date of the closing of the merger as if made
on and as of such date (or, with respect to the opinion of
Stephens, at and as of December 14, 2010); (ii) our
capitalization must be true and correct in all but de minimis
respects as of the date of the closing of the
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merger as if made on and as of such date (or, if given as of a
specific date, at and as of such date); and (iii) our other
representations and warranties set forth in the merger
agreement, disregarding all qualifications and exceptions
relating to materiality or material adverse effect, must be true
and correct as of the date of the closing of the merger as if
made on and as of such date (or, if given as of a specific date,
at and as of such date), except where the failure to be true and
correct, individually or in the aggregate, would not constitute
a material adverse effect;
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the Company has performed in all material respects its
obligations under the merger agreement at or prior to the date
of the closing of the merger;
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the Company has delivered to Parent a certificate signed by the
chief executive officer or the chief financial officer of the
Company certifying that the two conditions above have been
satisfied;
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Parent has received resignation letters from each of the members
of the boards of directors of the Company and our subsidiaries,
effective as of the effective time of the merger; and
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our stockholders have not exercised appraisal rights under the
DGCL in respect of more than 15% of the outstanding shares of
the Companys common stock.
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Our obligation to effect the merger is subject to the
satisfaction (or waiver, if permissible under applicable law) of
the following additional conditions:
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the representations and warranties of Parent and Merger Sub set
forth in the merger agreement, disregarding all qualifications
and exceptions relating to materiality, must be true and correct
in all material respects as of the date of the closing of the
merger as if made on and as of such date (or, if given as of a
specific date, at and as of such date), except where the failure
to be true and correct would not, individually or in the
aggregate, reasonably be expected to impair in any material
respect the ability of Parent or Merger Sub to perform its
obligations under the merger agreement or prevent or materially
delay consummation of the merger;
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Parent and Merger Sub have performed in all material respects
all obligations under the merger agreement at or prior to the
date of the closing of the merger; and
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Parent has delivered to the Company a certificate signed by the
chief executive officer or the chief financial officer of Parent
certifying that the two conditions above have been satisfied.
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None of the parties may rely on the failure of any condition set
forth above to be satisfied if such failure was caused by that
partys failure to use its commercially reasonable efforts
to consummate the merger as required by the merger agreement.
Termination
We and Parent may, by mutual written consent, terminate the
merger agreement and abandon the merger at any time prior to the
effective time of the merger, whether before or after the
adoption of the merger agreement by our stockholders.
The merger agreement may also be terminated and the merger
abandoned at any time prior to the effective time of the merger
whether before or after the adoption of the merger agreement by
our stockholders (except as noted below) as follows:
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by either the Company or Parent, if:
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the merger has not been consummated on or before May 31,
2011 (but this right to terminate will not be available to a
party if the failure to consummate the merger on or prior to
May 31, 2011 was primarily due to the failure of such party
to perform any of its obligations under the merger agreement);
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a law, injunction, judgment or ruling, which we collectively
refer to as a restraint, resulting in enjoining, restraining,
preventing or prohibiting the consummation of the merger or
making the consummation of the merger illegal has become final
and nonappealable (but this right to terminate
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will not be available to a party if the issuance of the
restraint was primarily due to the failure of such party to
perform its obligations under the merger agreement); or
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our stockholders meeting has been held and completed and
our stockholders have not adopted the merger agreement at such
meeting or any adjournment or postponement of such meeting.
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we have materially breached or failed to perform any of our
representations, warranties, covenants or other agreements in
the merger agreement, which breach or failure to perform
(i) would give rise to a failure of the condition to
Parents and Merger Subs obligation to close the
merger and (ii) cannot be cured by the Company by the
earlier of (x) 20 days following receipt of written
notice from Parent of such breach or failure or
(y) May 31, 2011; or
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(i) our board of directors (a) fails to recommend to
our stockholders that the stockholders adopt the merger
agreement, which we refer to as the Company recommendation, or
fails to include the Company recommendation in this proxy
statement; (b) changes, qualifies, withholds, withdraws or
modifies (or publicly proposes to do so), in a manner adverse to
Parent, the Company recommendation; (c) takes formal action
or makes any recommendation or public statement in connection
with a tender offer or exchange offer, other than a
recommendation against such offer or other permitted
communications; or (d) adopts, approves or recommends (or
publicly proposes to do so) a takeover proposal; (ii) at
any time prior to the adoption of the merger agreement by our
stockholders, our board of directors has failed to recommend
against any takeover proposal or failed to reaffirm the Company
recommendation within five business days after the public
announcement of any takeover proposal and the receipt of a
request to do so from Parent; (iii) we enter into an
agreement with respect to any takeover proposal; (iv) we
fail to call our stockholders meeting or fail to prepare
and mail the proxy statement in accordance with the merger
agreement and the breach remains uncured for ten business days
after receipt of written notice from Parent; or (v) we or
our board of directors has publicly announced an intention to do
any of the foregoing.
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Parent or Merger Sub have materially breached or failed to
perform any of their representations, warranties, covenants or
agreements in the merger agreement, which breach or failure to
perform (i) would give rise to a failure of a condition to
the Companys obligation to close the merger and
(ii) cannot be cured by Parent by the earlier of
(x) 20 days following receipt of written notice from
the Company of such breach or failure or (y) May 31,
2011; or
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at any time prior to the adoption of the merger agreement by our
stockholders, in order to concurrently enter into an agreement
with respect to any takeover proposal that constitutes a
superior proposal, if (i) the Company has complied in all
material respects with our obligations described in the section
entitled The Merger Agreement No Solicitation
of Takeover Proposals beginning on page 62 of this
proxy statement and (ii) prior to or concurrently with such
termination, we pay Parent the termination fee discussed in the
section entitled The Merger Agreement
Termination Fees Company Termination Fee below.
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Effect of
Termination
If the merger agreement is terminated, the terminating party
must give written notice to the other parties. Upon such notice,
the merger agreement will become null and void, except for
certain provisions, including the provision discussed in the
section entitled The Merger Agreement
Termination Fees below. Upon termination, the parties will
have no liability, except we may be liable for termination fees,
and nothing will relieve any party for any willful and material
breach of the merger agreement.
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Termination
Fees
Company
Termination Fee
Under certain circumstances, we may be obligated to pay Parent a
termination fee equal to $7,729,106. The occurrence of the
following events will result in our obligation to pay Parent the
applicable termination fee described above:
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(i) a takeover proposal has been made, proposed or
communicated after December 14, 2010 and not withdrawn
before adoption of the merger agreement by our stockholders or
prior to the termination of the merger agreement if a meeting of
our stockholders has not occurred; (ii) following the event
described in clause (i), the merger agreement is terminated by
(a) the Company or Parent if the merger is not consummated
prior to May 31, 2011 or due to the failure of our
stockholders to adopt the merger agreement at the
stockholders meeting or (b) by Parent if we
materially breach or fail to perform any of our representations,
warranties, covenants or agreements, subject to certain cure
periods, and (iii) within one year of the date of the
merger agreement, we enter into a definitive agreement with
respect to a takeover proposal, or any takeover proposal is
consummated, in either case, for the (a) acquisition of
assets of the Company and our subsidiaries equal to more than
50% of the Companys consolidated assets or to which more
than 50% of the Companys revenues or earnings on a
consolidated basis are attributable, (b) acquisition of
more than 50% of the Companys outstanding common stock,
(c) tender offer or exchange offer that if consummated
would result in any person beneficially owning more than 50% of
the Companys outstanding common stock, (d) merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving the Company, or (e) any combination
of the foregoing if the sum of the percentage of consolidated
assets, consolidated revenues or earnings and the Companys
common stock involved is more than 50%;
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at any time prior to the adoption of the merger agreement by our
stockholders, we terminate the merger agreement in order to
concurrently enter into an agreement with respect to any
takeover proposal that constitutes a superior proposal (provided
that we have complied in all material respects with the
specified terms of the merger agreement); or
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Parent terminates the merger agreement in circumstances where
(i) our board of directors (a) fails to make the
Company recommendation, or fails to include the Company
recommendation in this proxy statement; (b) changes,
qualifies, withholds, withdraws or modifies (or publicly
proposes to do so), in a manner adverse to Parent, the Company
recommendation; (c) takes formal action or makes any
recommendation or public statement in connection with a tender
offer or exchange offer, other than a recommendation against
such offer or other permitted communications; or
(d) adopts, approves or recommends (or publicly proposes to
do so) a takeover proposal; (ii) at any time prior to the
adoption of the merger agreement by our stockholders, our board
of directors has failed to recommend against any takeover
proposal or failed to reaffirm the Company recommendation within
five business days after the public announcement of any takeover
proposal and the receipt of a request to do so from Parent;
(iii) we enter into an agreement with respect to any
takeover proposal; (iv) we fail to call our
stockholders meeting or fail to prepare and mail the proxy
statement in accordance with the merger agreement and such
breach remains uncured for 10 business days after receipt of
written notice from Parent; or (v) we or our board of
directors has publicly announced an intention to do any of the
foregoing.
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Remedies
The Company, Parent and Merger Sub are entitled to injunctions
to prevent breaches of the merger agreement and to specifically
enforce the terms and provisions of the merger agreement, in
addition to any other remedy to which they are entitled at law
or in equity.
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In the event of a willful and material breach of the merger
agreement by Parent or Merger Sub, the Companys measure of
damages may include the loss of the economic benefits of the
transactions to the Companys stockholders and holders of
options, whether or not the merger agreement was validly
terminated.
Parents receipt of a termination fee will not relieve us
of liability for losses or damages suffered or incurred by
Parent or Merger Sub in connection with the merger agreement,
the merger or any matter forming the basis for termination in
the event of any willful and material breach by the Company of
the merger agreement.
Amendment
or Supplement
At any time prior to the effective time of the merger, the
parties to the merger agreement may amend or supplement the
merger agreement, whether before or after the stockholder
approval, by written agreement of the parties and by action of
their respective boards of directors. However, following
stockholder approval, the parties may not amend the provisions
of the merger agreement in any manner which would require
further approval by our stockholders under applicable law
without such approval.
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APPRAISAL
RIGHTS
Under the DGCL, if you do not wish to accept the per share
merger consideration provided for in the merger agreement, you
have the right to seek appraisal of your shares of the
Companys common stock and, if the merger is completed, to
receive payment in cash for the fair value of your shares of the
Companys common stock, exclusive of any element of value
arising from the accomplishment or expectation of the merger, as
determined by the Delaware Court of Chancery, together with
interest, if any, to be paid upon the amount determined to be
fair value. The fair value of your shares of the
Companys common stock as determined by the Delaware Court
of Chancery may be more or less than, or the same as, the $25.00
per share that you are otherwise entitled to receive under the
terms of the merger agreement. These rights are known as
appraisal rights. The Companys stockholders who elect to
exercise appraisal rights must not vote in favor of the proposal
to adopt the merger agreement and must comply with the
provisions of Section 262 of the DGCL, or Section 262,
in order to perfect their rights. Strict compliance with the
statutory procedures in Section 262 is required. Failure to
follow precisely any of the statutory requirements may result in
the loss of your appraisal rights.
This section is intended as a brief summary of the material
provisions of the Delaware statutory procedures that a
stockholder must follow in order to seek and perfect appraisal
rights. This summary, however, is not a complete statement of
all applicable requirements, and it is qualified by reference to
Section 262, the full text of which appears in
Annex C to this proxy statement. The following
summary does not constitute any legal or other advice, nor does
it constitute a recommendation that stockholders exercise their
appraisal rights under Section 262.
Section 262 requires that where a merger agreement is to be
submitted for adoption at a meeting of stockholders, the
stockholders be notified that appraisal rights will be available
not less than 20 days before the stockholder meeting to
vote on the merger. A copy of Section 262 must be included
with such notice. This proxy statement constitutes the
Companys notice to our stockholders that appraisal rights
are available in connection with the merger, in compliance with
the requirements of Section 262. If you wish to consider
exercising your appraisal rights, you should carefully review
the text of Section 262 contained in Annex C to
this proxy statement. Failure to comply timely and properly with
the requirements of Section 262 will result in the loss of
your appraisal rights under the DGCL.
If you elect to demand appraisal of your shares of the
Companys common stock, you must satisfy each of the
following conditions:
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you must deliver to the Company a written demand for appraisal
of your shares of the Companys common stock before the
vote is taken to approve the proposal to adopt the merger
agreement, which must reasonably inform us of the identity of
the holder of record of the Companys common stock who
intends to demand appraisal of his, her or its shares of the
Companys common stock; and
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you must not vote in favor of the proposal or submit a proxy in
favor of the proposal to adopt the merger agreement.
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If you fail to comply with either of these conditions and the
merger is completed, you will be entitled to receive payment for
your shares of the Companys common stock as provided for
in the merger agreement, but you will have no appraisal rights
with respect to your shares of the Companys common stock.
A holder of shares of the Companys common stock wishing to
exercise appraisal rights must hold of record the shares of the
Companys common stock on the date the written demand for
appraisal is made and must continue to hold the shares of the
Companys common stock of record through the effective time
of the merger, because appraisal rights will be lost if the
shares of the Companys common stock are transferred prior
to the effective time of the merger. Voting against or failing
to vote for the proposal to adopt the merger agreement by itself
does not constitute a demand for appraisal within the meaning of
Section 262. A proxy that is submitted and does not contain
voting instructions will, unless revoked, be voted in favor of
the proposal to adopt the merger agreement, and it effectively
will constitute a waiver of the stockholders right of
appraisal and will nullify any previously delivered written
demand for appraisal. Therefore, a stockholder who submits a
proxy and who wishes to exercise appraisal rights must either
submit a proxy containing instructions to vote against the
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proposal to adopt the merger agreement or abstain from voting on
the proposal to adopt the merger agreement. The written demand
for appraisal must be in addition to and separate from any proxy
or vote on the proposal to adopt the merger agreement.
All demands for appraisal should be addressed to Dynamex Inc.,
5429 LBJ Freeway, Suite 1000, Dallas, Texas 75240,
Attention: Corporate Secretary, and must be delivered before the
stockholder vote is taken to approve the proposal to adopt the
merger agreement at the special meeting, and should be executed
by, or on behalf of, the record holder of the shares of the
Companys common stock. The demand must reasonably inform
the Company of the identity of the stockholder and the intention
of the stockholder to demand appraisal of his, her or its shares
of the Companys common stock.
To be effective, a demand for appraisal by a stockholder of the
Companys common stock must be made by, or in the name of,
the registered stockholder, fully and correctly, as the
stockholders name appears on the Companys stock
ledger. The demand cannot be made by the beneficial owner if he
or she does not also hold the shares of the Companys
common stock of record. The beneficial holder must, in such
cases, have the registered owner, such as a bank, broker,
trustee or other nominee, submit the required demand in respect
of those shares of the Companys common stock. If you
hold your shares of the Companys common stock through a
bank, broker, trustee or other nominee and you wish to exercise
appraisal rights, you should consult with your bank, broker,
trustee or other nominee to determine the appropriate procedures
for the making of a demand for appraisal by the bank, broker,
trustee or other nominee.
If shares of the Companys common stock are owned of record
in a fiduciary capacity, such as by a trustee, guardian or
custodian, execution of a demand for appraisal should be made in
that capacity. If the shares of the Companys common stock
are owned of record by more than one person, as in a joint
tenancy or tenancy in common, the demand should be executed by
or for all joint owners. An authorized agent, including an
authorized agent for two or more joint owners, may execute the
demand for appraisal for a stockholder of record; however, the
agent must identify the record owner or owners and expressly
disclose the fact that, in executing the demand, he or she is
acting as agent for the record owner. A record owner, such as a
broker, who holds shares of the Companys common stock as a
nominee for others, may exercise his or her right of appraisal
with respect to the shares of the Companys common stock
held for one or more beneficial owners, while not exercising
this right for other beneficial owners. In that case, the
written demand should state the number of shares of the
Companys common stock as to which appraisal is sought.
Where no number of shares of the Companys common stock is
expressly mentioned, the demand will be presumed to cover all
shares of the Companys common stock held in the name of
the record owner.
Within ten days after the effective time of the merger, the
surviving corporation in the merger must give written notice
that the merger has become effective to each of the
Companys stockholders who has properly filed a written
demand for appraisal and who did not vote in favor of the
proposal to adopt the merger agreement. At any time within
60 days after the effective time of the merger, any
stockholder who has not commenced an appraisal proceeding or
joined a proceeding as a named party may withdraw the demand for
appraisal and accept the cash payment specified by the merger
agreement for that stockholders shares of the
Companys common stock by delivering to the surviving
corporation a written withdrawal of the demand for appraisal.
However, any attempt to withdraw the demand for appraisal made
more than 60 days after the effective time of the merger
will require written approval of the surviving corporation.
Unless the demand for appraisal is properly withdrawn by a
stockholder within 60 days after the effective date of the
merger, no appraisal proceeding in the Delaware Court of
Chancery will be dismissed as to any stockholder without the
approval of the Delaware Court of Chancery, with approval
conditioned upon the terms as the Court deems just. If more than
60 days have elapsed since the effective time of the merger
and either the surviving corporation does not approve a request
to withdraw a demand for appraisal or the Delaware Court of
Chancery does not approve the dismissal of an appraisal
proceeding, the stockholder will be entitled to receive only the
appraised value determined in any appraisal proceeding, which
value could be less than, equal to or more than the
consideration offered pursuant to the merger agreement.
Within 120 days after the effective time of the merger, but
not thereafter, either the surviving corporation or any
stockholder who has complied with the requirements of
Section 262 and is entitled to appraisal rights
73
under Section 262 may commence an appraisal proceeding by
filing a petition in the Delaware Court of Chancery demanding a
determination of the fair value of the shares of the
Companys common stock held by all stockholders entitled to
appraisal. Upon the filing of the petition by a stockholder,
service of a copy of the petition must be made upon the
surviving corporation. The surviving corporation has no
obligation to file a petition, and holders should not assume
that the surviving corporation will file a petition.
Accordingly, the failure of a stockholder to file a petition
within the period specified could nullify the stockholders
previous written demand for appraisal. In addition, within
120 days after the effective time of the merger, any
stockholder who has properly filed a written demand for
appraisal and who did not vote in favor of the proposal to adopt
the merger agreement, upon written request, will be entitled to
receive from the surviving corporation, a statement setting
forth the aggregate number of shares of the Companys
common stock not voted in favor of the proposal to adopt the
merger agreement and with respect to which demands for appraisal
have been received and the aggregate number of holders of shares
of the Companys common stock. The statement must be mailed
to the requesting stockholder within ten days after written
request has been received by the surviving corporation. A person
who is the beneficial owner of shares of the Companys
common stock held either in a voting trust or by a nominee on
behalf of a person may, in the persons own name, file a
petition or request from the surviving corporation for the
statement.
If a petition for appraisal is duly filed by a stockholder and a
copy of the petition is delivered to the surviving corporation,
then the surviving corporation will be obligated, within
20 days after receiving service of a copy of the petition,
to file with the Delaware Register in Chancery in which the
petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for
their shares of the Companys common stock and with whom
agreements as to the value of their shares of the Companys
common stock have not been reached. After the Delaware Register
in Chancery gives notice of the time and place of the hearing to
stockholders who have demanded appraisal, if notice is ordered
by the Delaware Court of Chancery, the Delaware Court of
Chancery is empowered to conduct a hearing upon the petition and
to determine those stockholders who have complied with
Section 262 and who have become entitled to the appraisal
rights provided by Section 262. The Delaware Court of
Chancery may require stockholders who have demanded appraisal
for their shares of the Companys common stock and who hold
stock represented by certificates to submit their stock
certificate(s) to the Delaware Register in Chancery for notation
of the pendency of the appraisal proceedings, and if any
stockholder fails to comply with that direction, the Delaware
Court of Chancery may dismiss the proceedings as to that
stockholder.
After determination of the stockholders entitled to appraisal of
their shares of the Companys common stock, the Delaware
Court of Chancery will appraise the shares of the Companys
common stock, determining their fair value as of the effective
time of the merger after taking into account all relevant
factors exclusive of any element of value arising from the
accomplishment or expectation of the merger, together with
interest, if any, to be paid upon the amount determined to be
the fair value. When the value is determined, the Delaware Court
of Chancery will direct the payment of value upon surrender to
the Company by those stockholders of the certificate(s)
representing their shares of the Companys common stock.
Unless the Delaware Court of Chancery in its discretion
determines otherwise for good cause shown, interest from the
effective date of the merger through the date of payment of the
judgment will be compounded quarterly and will accrue at 5% over
the Federal Reserve discount rate (including any surcharge) as
established from time to time during the period between the
effective time of the merger and the date of payment of the
judgment.
You should be aware that an investment banking opinion as to
fairness from a financial point of view is not necessarily an
opinion as to fair value under Section 262. Although we
believe that the per share merger consideration is fair, no
representation is made as to the outcome of the appraisal of
fair value as determined by the Delaware Court of Chancery and
stockholders should recognize that an appraisal could result in
a determination of a value higher or lower than, or the same as,
the per share merger consideration. Moreover, we do not
anticipate offering more than the per share merger consideration
to any stockholder exercising appraisal rights and reserve the
right to assert, in any appraisal proceeding, that, for purposes
of Section 262, the fair value of a share of
the Companys common stock is less than the per share
merger consideration. In determining fair value, the
Delaware Court of Chancery is required to take into account all
relevant factors. In Weinberger v. UOP, Inc., the
Delaware Supreme Court discussed the factors
74
that could be considered in determining fair value in an
appraisal proceeding, stating that proof of value by any
techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in
court should be considered and that [f]air price
obviously requires consideration of all relevant factors
involving the value of a company. The Delaware Supreme
Court has stated that in making this determination of fair value
the court must consider market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other
facts which could be ascertained as of the date of the merger
which throw any light on future prospects of the merged
corporation. Section 262 provides that fair value is to be
exclusive of any element of value arising from the
accomplishment or expectation of the merger. In
Cede & Co. v. Technicolor, Inc., the
Delaware Supreme Court stated that such exclusion is a
narrow exclusion [that] does not encompass known elements
of value, but which rather applies only to the speculative
elements of value arising from such accomplishment or
expectation. In Weinberger, the Delaware Supreme Court
construed Section 262 to mean that elements of future
value, including the nature of the enterprise, which are known
or susceptible of proof as of the date of the merger and not the
product of speculation, may be considered.
Costs of the appraisal proceeding may be determined by the
Delaware Court of Chancery and imposed upon the surviving
corporation and the stockholders participating in the appraisal
proceeding by the Delaware Court of Chancery, as it deems
equitable in the circumstances. However, costs do not include
attorneys and expert witness fees. Each stockholder is
responsible for his, her or its attorneys and expert
witness fees, although, upon the application of a stockholder,
the Delaware Court of Chancery may order all or a portion of the
expenses incurred by any stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable
attorneys fees and the fees and expenses of experts used
in the appraisal proceeding, to be charged pro rata against the
value of all shares of the Companys common stock entitled
to appraisal. Any stockholder who demanded appraisal rights will
not, after the effective time of the merger, be entitled to vote
shares of the Companys common stock subject to that demand
for any purpose or to receive payments of dividends or any other
distribution with respect to those shares of the Companys
common stock, other than with respect to dividends or
distributions payable to stockholders of record as of a record
date prior to the effective time of the merger. However, if no
petition for appraisal is filed within 120 days after the
effective time of the merger, or if the stockholder delivers a
written withdrawal of the stockholders demand for an
appraisal and an acceptance of the merger within 60 days
after the effective time of the merger, then the right of that
stockholder to appraisal will cease and that stockholder will be
entitled to receive the $25.00 per share cash payment (without
interest) for his, her or its shares of the Companys
common stock pursuant to the merger agreement.
In view of the complexity of Section 262 of the DGCL,
Companys stockholders who may wish to pursue appraisal
rights should consult their legal and financial advisors.
75
MARKET
PRICES OF THE COMPANYS COMMON STOCK AND DIVIDEND
INFORMATION
The Companys common stock is listed for trading on the
Nasdaq Global Select Market under the symbol DDMX.
The table below shows, for the periods indicated, the price
range of the Companys common stock, as reported on the
Nasdaq Global Select Market. Our fiscal year ends on July 31
each year.
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Common Stock
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Price
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High
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Low
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2009
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First Quarter
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$
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30.49
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$
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19.11
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Second Quarter
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$
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25.45
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$
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11.02
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Third Quarter
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$
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14.93
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$
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10.62
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Fourth Quarter
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$
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18.18
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$
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13.92
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2010
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First Quarter
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$
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19.66
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$
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15.13
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Second Quarter
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$
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18.89
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$
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15.92
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Third Quarter
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$
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18.14
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$
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14.61
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Fourth Quarter
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$
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17.97
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$
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12.15
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2011
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First Quarter
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$
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21.14
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$
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12.22
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Second Quarter (through
[ ],
20[ ])
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$
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$
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The closing price of the Companys common stock on the
Nasdaq Global Select Market on October 1, 2010, the last
trading day prior to the public announcement of the execution of
the Greenbriar merger agreement, was $15.31 per share of the
Companys common stock. On
[ ],
20[ ], the most recent practicable date before this
proxy statement was mailed to our stockholders, the closing
price for the common stock on the Nasdaq Global Select Market
was $[ ] per share of the
Companys common stock. You are encouraged to obtain
current market quotations for common stock in connection with
voting your shares of the Companys common stock.
We have never declared or paid cash dividends on the
Companys common stock, and the terms of the merger
agreement provide that, from the date of the merger agreement
until the effective time of the merger, we may not declare, set
aside or pay any dividends on shares of the Companys
common stock.
76
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Companys common stock as of
December 28, 2010 for (i) each person known by the
Company to own beneficially more than 5% of the Companys
common stock, (ii) each of our directors, (iii) our
principal executive officer, principal financial officer and
each of our other three most highly compensated executive
officers, and (iv) all directors and executive officers of
the Company as a group. Except as otherwise indicated,
beneficial ownership includes both voting and investment power.
The following table does not include restricted stock and
performance units granted to certain members of management on
September 24, 2010. Such equity awards will be cancelled if
the merger is consummated.
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Shares Beneficially Owned
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Name
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Common Stock(1)
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Percent
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Directors and executive officers**:
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Richard K. McClelland
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90,723
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*
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James L. Welch
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21,498
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*
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Ray E. Schmitz
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98,243
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1.00
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%
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Maynard K. Skarka
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*
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Jason W. Bergman
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*
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Gilbert Jones
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7,562
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*
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Brian J. Hughes
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15,000
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*
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Wayne Kern
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43,640
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*
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Bruce E. Ranck
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55,000
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*
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Stephen P. Smiley
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22,160
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*
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Craig R. Lentzsch
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12,000
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*
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All directors and executive officers as a group (11 persons)
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365,827
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3.61
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%
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5% stockholders:
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Centaurus Capital LP(2)
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963,988
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9.88
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%
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33 Cavendish Square, 16th Floor
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London, WIG OPW, United Kingdom
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Timothy E. Moriarty(3)
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857,444
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8.79
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%
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150 Broadway Suite 1915
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New York, NY 10038
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FBR Capital Markets Corporation(4)
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750,000
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7.69
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%
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1001 19th Street North
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Arlington, VA 22209
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Blackrock, Inc.(5)
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711,850
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7.30
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%
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40 East 52nd Street
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New York, NY 10022
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Riverbridge Partners, LLC(6)
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550,629
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5.64
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%
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801 Nicollet Mall, Suite 600
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Minneapolis, MN 55402
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Luther King Capital Management Corporation(7)
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550,482
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5.64
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%
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301 Commerce Street, Suite 1600
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Fort Worth, Texas 76102
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* |
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Represents less than 1% of the Companys common stock. |
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** |
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The address of all our directors and executive officers is the
Companys headquarters at 5429 LBJ Freeway,
Suite 1000, Dallas, Texas 75240. |
77
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(1) |
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Includes shares issuable upon the exercise of stock options
outstanding and fully vested on or within 60 days after
September 30, 2010, as follows:
Mr. McClelland 77,723;
Mr. Welch 16,998; Mr. Schmitz
85,243; Mr. Jones 4,562; Mr. Hughes
15,000; Mr. Kern 20,000;
Mr. Ranck 25,000; Mr. Smiley
20,000; and. Mr. Lentzsch 9,000. |
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(2) |
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Based on notice received from such holder on November 12,
2010. |
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(3) |
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Based on information reported on Schedule 13D/A that was
filed by Timothy E. Moriarty with the SEC on October 6, 2010 |
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(4) |
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Based on information reported on Schedule 13G that was
filed by FBR Capital Markets Corporation with the SEC on
December 21, 2010. |
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(5) |
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Based on information reported on Schedule 13G that was
filed by Blackrock, Inc. with the SEC on January 29, 2010. |
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(6) |
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Based on information reported on Schedule 13G that was
filed by Riverbridge Partners, LLC with the SEC on
February 4, 2010. |
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(7) |
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Based on information reported on Schedule 13D that was
filed by Luther King Capital Management Corporation with the SEC
on October 5, 2010. |
DELISTING
AND DEREGISTRATION OF THE COMPANYS COMMON STOCK
If the merger is completed, the Companys common stock may
be delisted from the Nasdaq Global Select Market and
deregistered under the Exchange Act and, if so, we will no
longer file periodic reports with the SEC on account of the
Companys common stock. In addition, if the merger is
completed, the Companys common stock will no longer be
publicly-traded.
78
PROPOSAL 2
ADJOURNMENT OF THE SPECIAL MEETING
If we fail to receive a sufficient number of votes to adopt the
merger agreement, we may propose to adjourn the special meeting
for the purpose of soliciting additional proxies to adopt the
merger agreement. We currently do not intend to propose
adjournment of our special meeting if there are sufficient votes
to adopt the merger agreement.
Assuming a quorum is present at the special meeting, approval of
the proposal to adjourn the special meeting, if necessary or
appropriate, to solicit additional proxies requires the vote of
a majority of the votes cast by stockholders present in person
or represented by proxy and entitled to vote at the special
meeting. If a quorum is not present at the special meeting,
approval of a proposal to adjourn the special meeting will
require the affirmative vote of the majority of shares present
in person or represented by proxy at the special meeting and
entitled to vote on the proposal.
Our board of directors recommends that you vote
FOR the proposal to adjourn the special meeting to
solicit additional proxies if there are insufficient votes at
the time of the meeting to adopt the merger agreement.
OTHER
MATTERS
Our board of directors currently knows of no other business that
will be presented for consideration at the special meeting.
Nevertheless, should any business other than that set forth in
the notice of special meeting of stockholders properly come
before the meeting or any adjournment or postponement thereof,
the enclosed proxy confers discretionary authority to vote with
respect to matters, including matters that our board of
directors does not know, a reasonable time before proxy
solicitation, are to be presented at the meeting. If any of
these matters are presented at the meeting, or any adjournment
or postponement thereof, then the proxy holders named in the
enclosed proxy card will vote in accordance with their judgment.
STOCKHOLDER
PROPOSALS
If the merger is completed, we will not have public stockholders
and there will be no public participation in any future meeting
of stockholders. However, if the merger is not completed, or if
we are otherwise required to do so under applicable law, we
would hold a 2010 annual meeting of stockholders at a date and
time to be determined in the future. If the merger is not
consummated, any stockholder proposals intended to be presented
pursuant to
Rule 14a-8
under the Exchange Act for inclusion in our proxy statement and
accompanying proxy card for our next annual meeting must have
been delivered to, or mailed to and received at, our principal
office at 5429 LBJ Freeway, Suite 1000, Dallas, Texas 75240
by July 27, 2010 (unless the date of our 2010 annual
meeting of stockholders is changed by more than 30 days
from the date of our 2009 annual meeting of stockholders, in
which case the deadline is a reasonable time before we mail our
proxy materials) and have met the requirements of
Rule 14a-8.
HOUSEHOLDING
OF PROXY MATERIAL
The SEC has adopted rules that permit companies and
intermediaries (e.g., banks, brokers, trustees or other
nominees) to satisfy the delivery requirements for proxy
statements with respect to two or more stockholders sharing the
same address by delivering a single proxy statement addressed to
those stockholders. This process, which is commonly referred to
as householding, potentially means extra convenience
for stockholders and cost savings for companies. Each
stockholder who participates in householding will continue to
receive a separate proxy card. Under Delaware law, stockholders
must consent to householding and any stockholder who
fails to object in writing to the corporation within
60 days of having been given written notice by the
corporation of its intent to household is deemed to
have consented to householding.
A number of brokers with account holders who are our
stockholders will be householding our proxy
materials. A single proxy statement report will be delivered to
multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders.
Once you have received notice from your broker that they will be
householding communications to your address,
householding will continue
79
until you are notified otherwise or until you revoke your
consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate
proxy statement, please notify your bank, broker, trustee or
other nominee and direct a written request to Investor
Relations, Dynamex Inc., 5429 LBJ Freeway, Suite 1000,
Dallas, Texas 75240 or an oral request by telephone at
(214) 560-9000.
If any stockholders in your household wish to receive a separate
copy of this proxy statement, they may call or write to Investor
Relations and we will promptly provide additional copies.
Stockholders who currently receive multiple copies of the proxy
statement at their address and would like to request
householding of their communications should contact
their bank, broker, trustee or other nominee.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SEC public reference room located at
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. Our SEC
filings are also available to the public at the SEC website at
www.sec.gov. You also may obtain free copies of the documents we
file with the SEC, including this proxy statement, by going to
the Investor Relations page of our corporate website at
www.dynamex.com. Our website address is provided as an inactive
textual reference only. The information provided on our website,
other than copies of the documents listed below that have been
filed with the SEC, is not part of this proxy statement, and
therefore is not incorporated herein by reference.
Statements contained in this proxy statement, or in any document
incorporated by reference in this proxy statement regarding the
contents of any contract or other document, are not necessarily
complete and each statement is qualified by reference to that
contract or other document filed as an exhibit with the SEC. The
SEC allows us to incorporate by reference into this
proxy statement documents we file with the SEC. This means that
we can disclose important information to you by referring you to
those documents. The information incorporated by reference is
considered to be a part of this proxy statement, and later
information that we file with the SEC will update and supersede
that information. We incorporate by reference the documents
listed below and any documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this proxy statement and before the date of the
special meeting.
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Annual Report on
Form 10-K
for the fiscal year ended July 31, 2010 (filed with the SEC
on September 22, 2010) and Amendment No. 1
thereto (filed with the SEC on November 18, 2010);
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Quarterly Report on
Form 10-Q
for the fiscal quarter ended October 31, 2010 (filed with
the SEC on December 2, 2010); and
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Current Reports on
Form 8-K
filed with the SEC on September 16, 2010, October 1,
2010, November 23, 2010, November 30, 2010,
December 8, 2010 and December 15, 2010.
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Any person, including any beneficial owner, to whom this proxy
statement is delivered may request copies of proxy statements
and any of the documents incorporated by reference in this
document or other information concerning us, without charge, by
written or telephonic request directed to Dynamex Inc., 5429 LBJ
Freeway, Suite 1000, Dallas, Texas 75240, Attn: Corporate
Secretary or by telephone at
(214) 560-9000,
on the Investor Relations page of our corporate website at
www.dynamex.com; or from our proxy solicitor, D.F.
King & Co., Inc., by telephone toll-free at
888-887-0082
(banks, brokers, trustees or other nominees can call collect at
212-269-5550)
or by email at dynamex@dfking.com; or from the SEC through the
SEC website at the address provided above. Documents
incorporated by reference are available without charge,
excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference into those documents.
80
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A
PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM
WHOM IT IS UNLAWFUL TO MAKE A PROXY SOLICITATION IN THAT
JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE
YOUR SHARES OF THE COMPANYS COMMON STOCK AT THE
SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN
THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED
[ ],
20[ ]. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE
OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO
STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
81
EXECUTION
VERSION
AGREEMENT
AND PLAN OF MERGER
Dated as of December 14, 2010
among
TRANSFORCE INC.
TRANSFORCE ACQUISITION CORP.
and
DYNAMEX INC.
TABLE OF
CONTENTS
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Page
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ARTICLE I
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THE MERGER
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A-1
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Section 1.1
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The Merger
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A-1
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Section 1.2
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Closing
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A-1
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Section 1.3
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Effective Time
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A-2
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Section 1.4
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Effects of the Merger
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A-2
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Section 1.5
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Certificate of Incorporation and By-laws of the Surviving
Corporation
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A-2
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Section 1.6
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Directors and Officers of the Surviving Corporation
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A-2
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ARTICLE II
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EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES; COMPANY STOCK OPTIONS;
OTHER EQUITY AWARDS
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A-2
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Section 2.1
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Effect on Capital Stock
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A-2
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Section 2.2
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Exchange of Certificates
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A-3
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Section 2.3
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Appraisal Rights
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A-4
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Section 2.4
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Company Stock Options; Other Equity Awards
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A-5
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Section 2.5
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Adjustments
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A-5
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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A-5
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Section 3.1
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Organization, Standing and Corporate Power
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A-6
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Section 3.2
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Capitalization
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A-7
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Section 3.3
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Authority; Noncontravention; Voting Requirements
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A-7
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Section 3.4
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Governmental Approvals
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A-9
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Section 3.5
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Company SEC Documents; Undisclosed Liabilities
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A-9
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Section 3.6
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Absence of Certain Changes
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A-10
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Section 3.7
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Legal Proceedings
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A-11
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Section 3.8
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Compliance With Laws; Permits
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A-11
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Section 3.9
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Information Supplied
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A-11
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Section 3.10
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Tax Matters
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A-11
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Section 3.11
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Employee Benefits and Labor Matters
|
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A-12
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Section 3.12
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Environmental Matters
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A-14
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Section 3.13
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Intellectual Property
|
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A-14
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Section 3.14
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Contracts
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A-16
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Section 3.15
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Properties
|
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A-17
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Section 3.16
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Insurance
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A-17
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Section 3.17
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Unlawful Payments
|
|
|
A-17
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Section 3.18
|
|
Opinion of Financial Advisor
|
|
|
A-18
|
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Section 3.19
|
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Brokers and Other Advisors
|
|
|
A-18
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Section 3.20
|
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Takeover Statutes
|
|
|
A-18
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Section 3.21
|
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Independent Contractors
|
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A-18
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Section 3.22
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Confidentiality Agreements
|
|
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A-18
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Section 3.23
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Prior Merger Agreement
|
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A-18
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Section 3.24
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No Other Representations or Warranties
|
|
|
A-19
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A-i
TABLE OF
CONTENTS
(continued)
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Page
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
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A-19
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Section 4.1
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Organization; Standing
|
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A-19
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Section 4.2
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Authority; Noncontravention
|
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A-19
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Section 4.3
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Governmental Approvals
|
|
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A-19
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Section 4.4
|
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Information Supplied
|
|
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A-20
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Section 4.5
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Ownership and Operations of Merger Sub
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A-20
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Section 4.6
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Financing
|
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A-20
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Section 4.7
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Solvency
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A-20
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Section 4.8
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[Intentionally Left Blank]
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A-20
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Section 4.9
|
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Certain Arrangements
|
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|
A-20
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Section 4.10
|
|
Legal Proceedings
|
|
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A-20
|
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Section 4.11
|
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Brokers and Other Advisors
|
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A-20
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Section 4.12
|
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No Other Representations or Warranties
|
|
|
A-20
|
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|
|
|
|
|
|
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ARTICLE V
|
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ADDITIONAL COVENANTS AND AGREEMENTS
|
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A-21
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Section 5.1
|
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Preparation of the Proxy Statement; Stockholders Meeting
|
|
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A-21
|
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Section 5.2
|
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Conduct of Business
|
|
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A-22
|
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Section 5.3
|
|
No Solicitation; Change in Recommendation
|
|
|
A-24
|
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Section 5.4
|
|
Commercially Reasonable Efforts
|
|
|
A-26
|
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Section 5.5
|
|
Financing
|
|
|
A-27
|
|
Section 5.6
|
|
Public Announcements
|
|
|
A-27
|
|
Section 5.7
|
|
Access to Information; Confidentiality
|
|
|
A-27
|
|
Section 5.8
|
|
Notification of Certain Matters
|
|
|
A-28
|
|
Section 5.9
|
|
Indemnification and Insurance
|
|
|
A-28
|
|
Section 5.10
|
|
Securityholder Litigation
|
|
|
A-29
|
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Section 5.11
|
|
Fees and Expenses
|
|
|
A-29
|
|
Section 5.12
|
|
Rule 16b-3
|
|
|
A-29
|
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Section 5.13
|
|
Employee Matters
|
|
|
A-30
|
|
|
|
|
|
|
|
|
ARTICLE VI
|
|
CONDITIONS PRECEDENT
|
|
|
A-30
|
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Section 6.1
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
A-30
|
|
Section 6.2
|
|
Conditions to Obligations of Parent and Merger Sub
|
|
|
A-31
|
|
Section 6.3
|
|
Conditions to Obligations of the Company
|
|
|
A-31
|
|
Section 6.4
|
|
Frustration of Closing Conditions
|
|
|
A-31
|
|
|
|
|
|
|
|
|
ARTICLE VII
|
|
TERMINATION
|
|
|
A-32
|
|
Section 7.1
|
|
Termination
|
|
|
A-32
|
|
Section 7.2
|
|
Effect of Termination
|
|
|
A-33
|
|
Section 7.3
|
|
Termination Fee
|
|
|
A-33
|
|
A-ii
TABLE OF
CONTENTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII
|
|
MISCELLANEOUS
|
|
|
A-33
|
|
Section 8.1
|
|
No Survival of Representations and Warranties
|
|
|
A-33
|
|
Section 8.2
|
|
Amendment or Supplement
|
|
|
A-34
|
|
Section 8.3
|
|
Extension of Time, Waiver, Etc
|
|
|
A-34
|
|
Section 8.4
|
|
Assignment
|
|
|
A-34
|
|
Section 8.5
|
|
Counterparts
|
|
|
A-34
|
|
Section 8.6
|
|
Entire Agreement; No Third-Party Beneficiaries
|
|
|
A-34
|
|
Section 8.7
|
|
Governing Law; Jurisdiction; Waiver of Jury Trial
|
|
|
A-34
|
|
Section 8.8
|
|
Specific Enforcement
|
|
|
A-35
|
|
Section 8.9
|
|
Notices
|
|
|
A-35
|
|
Section 8.10
|
|
Severability
|
|
|
A-36
|
|
Section 8.11
|
|
Definitions
|
|
|
A-36
|
|
Section 8.12
|
|
Interpretation
|
|
|
A-41
|
|
Section 8.13
|
|
Non-Recourse
|
|
|
A-42
|
|
A-iii
AGREEMENT
AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of December 14,
2010 (this Agreement), is among TransForce
Inc., a Canadian corporation (Parent),
TransForce Acquisition Corp., a Delaware corporation and an
indirect wholly owned Subsidiary of Parent (Merger
Sub), and Dynamex Inc., a Delaware corporation (the
Company). Certain capitalized terms used in
this Agreement are defined in Section 8.11.
WHEREAS, concurrently with entering into this Agreement, the
Company (i) terminated the Agreement and Plan of Merger,
dated as of October 1, 2010, among DashNow Holding Corp., a
Delaware corporation (DashNow Parent),
DashNow Acquisition Corp., a Delaware corporation
(DashNow Merger Sub), and the Company, as
amended by that certain Amendment No. 1 to Agreement and
Plan of Merger, dated as of November 30, 2010, among the
Company, DashNow Parent and DashNow Merger Sub (the
Prior Merger Agreement) pursuant to, and in
accordance with, Section 7.1(d)(ii) of the Prior Merger
Agreement and (ii) paid DashNow Parent the No-Shop
Termination Fee (as defined in the Prior Merger Agreement);
WHEREAS, the parties intend that Merger Sub be merged with and
into the Company, with the Company surviving that merger on the
terms and subject to the conditions set forth in this Agreement
as a result of which the Company will become an indirect
wholly-owned Subsidiary of Parent (the
Merger);
WHEREAS, the board of directors of the Company has unanimously
(i) determined in accordance with Section 5.3 of the
Prior Merger Agreement that the Merger and the consummation of
the Transactions constitute a Superior Proposal (as
defined in the Prior Merger Agreement); (ii) determined in
accordance with Section 5.3 of the Prior Merger Agreement
that that failure to enter into this Agreement would violate the
directors fiduciary duties to the Companys
stockholders under applicable Law; (iii) determined that it
is advisable and in the best interests of the Company and its
stockholders to terminate the Prior Merger Agreement (in
accordance with Section 7.1(d)(ii) of the Prior Merger
Agreement), to pay the No-Shop Termination Fee (as
defined in the Prior Merger Agreement) and to enter into this
Agreement; (iv) determined that the termination of the
Prior Merger Agreement (in accordance with
Section 7.1(d)(ii) of the Prior Merger Agreement), the
payment of the No-Shop Termination Fee (as defined
in the Prior Merger Agreement), the entry into of this Agreement
and the Transactions are fair to, and in the best interests of,
the Company and its stockholders; (v) approved the
termination of the Prior Merger Agreement (in accordance with
Section 7.1(d)(ii) of the Prior Merger Agreement), the
payment of the No-Shop Termination Fee (as defined
in the Prior Merger Agreement) and the execution, delivery and
performance by the Company of this Agreement and the
consummation of the Transactions, including the Merger; and
(vi) resolved to recommend adoption of this Agreement by
the stockholders of the Company; and
WHEREAS, the board of directors of each of Parent and Merger Sub
have approved this Agreement and declared it advisable for
Parent and Merger Sub, respectively to enter into this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, Parent,
Merger Sub and the Company hereby agree as follows:
ARTICLE I
The
Merger
Section 1.1 The
Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the General Corporation Law of the State of Delaware (the
DGCL), at the Effective Time, Merger Sub
shall be merged with and into the Company, and the separate
corporate existence of Merger Sub shall thereupon cease, and the
Company shall be the surviving corporation in the Merger (the
Surviving Corporation).
Section 1.2 Closing. The
closing of the Merger (the Closing) shall
take place at 10:00 a.m. (Central time) on a date to be
specified by Parent and reasonably acceptable to the Company (as
such date may be changed as provided herein, the
Closing Date), which date shall be no later
than the fourth (4th) business day after satisfaction or waiver
of the conditions set forth in Article VI (other
than those conditions that by
A-1
their nature are to be satisfied at the Closing, but subject to
the satisfaction or waiver of those conditions at the Closing),
at the offices of Weil, Gotshal & Manges LLP, 200
Crescent Court, Suite 300 Dallas, Texas 75201, unless
another time, date or place is agreed to in writing by Parent
and the Company.
Section 1.3 Effective
Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date the
parties shall file with the Secretary of State of the State of
Delaware a certificate of merger, executed in accordance with,
and in such form as is required by, the relevant provisions of
the DGCL (the Certificate of Merger). The
Merger shall become effective upon the filing of the Certificate
of Merger or at such later time as is agreed to by the parties
hereto and specified in the Certificate of Merger (the time at
which the Merger becomes effective is herein referred to as the
Effective Time).
Section 1.4 Effects
of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time,
all the properties, rights, privileges, powers and franchises of
the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 1.5 Certificate
of Incorporation and By-laws of the Surviving
Corporation. At the Effective Time, the
certificate of incorporation and bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, in the form of
Exhibit A and Exhibit B hereto,
respectively, shall be the certificate of incorporation and
bylaws of the Surviving Corporation (except that the name of the
Surviving Corporation shall be Dynamex Inc.), until thereafter
amended as provided herein or by applicable Law (subject to
Section 5.9 hereof).
Section 1.6 Directors
and Officers of the Surviving Corporation.
(a) The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving
Corporation immediately following the Effective Time, until
their respective successors are duly elected or appointed and
qualified or their earlier death, resignation or removal in
accordance with the certificate of incorporation and by-laws of
the Surviving Corporation.
(b) The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving
Corporation until their respective successors are duly appointed
and qualified or their earlier death, resignation or removal in
accordance with the certificate of incorporation and by-laws of
the Surviving Corporation.
ARTICLE II
Effect of
the Merger on the Capital Stock of the Constituent Corporations;
Exchange of
Certificates;
Company Stock Options; Other Equity Awards
Section 2.1 Effect
on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder of any shares of the Companys common stock, par
value $.01 per share (Company Common Stock),
or any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger
Sub. Each issued and outstanding share of
capital stock of Merger Sub shall be converted into and become
one validly issued, fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned
Stock. Any shares of Company Common Stock
that are owned by the Company as treasury stock, and any shares
of Company Common Stock owned by Parent or Merger Sub, shall be
automatically canceled and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common
Stock. Each issued and outstanding share of
Company Common Stock (other than shares to be canceled in
accordance with Section 2.1(b) and Dissenting
Shares) shall be converted automatically into and shall
thereafter represent the right to receive $25.00 in cash,
without interest (the Merger Consideration).
As of the Effective Time, each such share of Company Common
Stock shall no longer be outstanding and shall automatically be
canceled and shall cease to exist, and each holder of a
A-2
certificate (or evidence of shares in book-entry form) which
immediately prior to the Effective Time represented any such
share of Company Common Stock (each, a
Certificate) shall cease to have any rights
with respect thereto, except the right to receive the Merger
Consideration to be paid in consideration therefor upon
surrender of such Certificate in accordance with
Section 2.2(b), without interest.
Section 2.2 Exchange
of Certificates.
(a) Paying Agent. Prior to the
Effective Time, Parent shall designate a bank or trust company,
which shall be reasonably acceptable to the Company, to act as
agent for the holders of shares of Company Common Stock in
connection with the Merger (the Paying Agent)
to receive, on terms reasonably acceptable to the Company, for
the benefit of holders of shares of Company Common Stock, the
aggregate Merger Consideration to which holders of shares of
Company Common Stock shall become entitled pursuant to
Section 2.1(c). Parent shall deposit, or
cause to be deposited, such aggregate Merger Consideration with
the Paying Agent as soon as practicable following the Effective
Time (but in any event within one (1) business day after
the date on which the Effective Time shall occur). Such
aggregate Merger Consideration deposited with the Paying Agent
shall, pending its disbursement to such holders, be invested by
the Paying Agent in accordance with instructions from Parent in
(i) short-term direct obligations of the United States of
America, (ii) short-term obligations for which the full
faith and credit of the United States of America is pledged to
provide for the payment of principal and interest,
(iii) short-term commercial paper rated the highest quality
by either Moodys Investors Service, Inc. or Standard and
Poors Ratings Services or (iv) money market funds
investing solely in a combination of the foregoing.
(b) Payment Procedures. Promptly
after the Effective Time (but in no event more than five
(5) business days thereafter), the Surviving Corporation
shall cause the Paying Agent to mail to each holder of record of
Company Common Stock entitled to receive Merger Consideration
pursuant to Section 2.1(c) (i) a letter of
transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Paying
Agent, and which shall be in such form and shall have such other
customary provisions (including customary provisions with
respect to delivery of an agents message with
respect to shares held in book-entry form)) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation
to the Paying Agent, together with such letter of transmittal,
duly completed and validly executed in accordance with the
instructions (and such other customary documents as may
reasonably be required by the Paying Agent), the holder of such
Certificate shall be entitled to receive in exchange therefor
the Merger Consideration, without interest, for each share of
Company Common Stock formerly represented by such Certificate,
and the Certificate so surrendered shall immediately be
canceled. If payment of the Merger Consideration is to be made
to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of payment
that (x) the Certificate so surrendered shall be properly
endorsed (or accompanied by separate stock powers) and shall
otherwise be in proper form for transfer (and the signature on
the endorsement or stock power, as the case may be, shall be
guaranteed by an eligible guarantor institution, as
such term is defined in
Rule 17Ad-15
under the Exchange Act) and (y) the Person requesting such
payment shall have paid any transfer and other similar taxes
required by reason of the payment of the Merger Consideration to
a Person other than the registered holder of such Certificate
surrendered or shall have established to the reasonable
satisfaction of the Surviving Corporation that such tax either
has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration as
contemplated by this Article II, without interest.
(c) Transfer Books; No Further Ownership Rights in
Company Stock. The Merger Consideration paid
in respect of shares of Company Common Stock upon the surrender
for exchange of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in
full satisfaction of all rights pertaining to the shares of
Company Common Stock previously represented by such
Certificates, and at the Effective Time, the stock transfer
books of the Company shall be closed and thereafter there shall
be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company
Common Stock that were outstanding immediately prior to the
Effective Time. From and after the Effective Time, the holders
of Certificates that evidenced ownership of shares of Company
Common Stock outstanding
A-3
immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Company Common Stock,
except as otherwise provided for herein or by applicable Law.
Subject to the last sentence of Section 2.2(e), if,
at any time after the Effective Time, Certificates are presented
to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this
Article II.
(d) Lost, Stolen or Destroyed
Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit
(in the form required by Parent) of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and,
if required by Parent, the posting by such Person of a bond, in
such amount as is sufficient to provide a full indemnity against
any claim that may be made against it with respect to such
Certificate, the Paying Agent will pay, in exchange for such
lost, stolen or destroyed Certificate, the applicable Merger
Consideration to be paid in respect of the shares of Company
Common Stock formerly represented by such Certificate, as
contemplated by this Article II.
(e) Termination of Fund. At any
time following the nine (9) month anniversary of the
Closing Date, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) that had been made
available to the Paying Agent and which have not been disbursed
to holders of Certificates, and thereafter such holders shall be
entitled to look only to Parent and the Surviving Corporation
(subject to abandoned property, escheat or other similar Laws)
as general creditors thereof with respect to the payment of any
Merger Consideration that may be payable upon surrender of any
Certificates held by such holders, as determined pursuant to
this Agreement, without any interest thereon. Any amounts
remaining unclaimed by such holders at such time at which such
amounts would otherwise escheat to or become property of any
Governmental Authority shall become, to the extent permitted by
applicable Law, the property of Parent, free and clear of all
claims or interest of any Person previously entitled thereto.
(f) No Liability. Notwithstanding
any provision of this Agreement to the contrary, none of the
parties hereto, the Surviving Corporation or the Paying Agent
shall be liable to any Person for Merger Consideration delivered
to a public official pursuant to any applicable abandoned
property, escheat or other similar Law.
(g) Withholding Taxes. Parent, the
Surviving Corporation and the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement such amounts as are required to be
deducted and withheld with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (collectively, the
Code), or under any provision of state, local
or foreign tax Law. To the extent amounts are so withheld and
paid over to the appropriate taxing authority, the withheld
amounts shall be treated for all purposes of this Agreement as
having been paid to the Person in respect of which such
deduction and withholding was made.
Section 2.3 Appraisal
Rights.
(a) Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and which
are held by a stockholder who did not vote in favor of the
Merger (or consent thereto in writing) and who is entitled to
demand and properly demands appraisal of such shares pursuant
to, and who complies in all respects with, the provisions of
Section 262 of the DGCL (the Dissenting
Stockholders), shall not be converted into or be
exchangeable for the right to receive the Merger Consideration
(the Dissenting Shares). At the Effective
Time, (i) the holder or holders of Dissenting Shares shall
be entitled only to such rights as may be granted to him, her,
it or them under Section 262 of the DGCL, and
(ii) such Dissenting Shares shall no longer be outstanding
and shall automatically be canceled and shall cease to exist.
(b) Notwithstanding the provisions of
Section 2.3(a), if any Dissenting Stockholder shall
have effectively withdrawn or lost such right (through failure
to perfect such appraisal rights or otherwise), such
holders shares of Company Common Stock (i) shall no
longer be deemed Dissenting Shares and (ii) shall be
treated as if they had been converted automatically into and
become exchangeable for the right to receive, as of the
Effective Time, the Merger Consideration for each such share of
Company Common Stock, in accordance with
Section 2.1, without any interest thereon.
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(c) The Company shall give Parent (i) prompt notice of
any demands for appraisal of any shares of Company Common Stock,
any withdrawals of such demands and any other instrument served
on the Company pursuant to Section 262 of the DGCL, and
(ii) the opportunity to participate in all negotiations and
proceedings with respect to any demands for appraisal under the
DGCL. The Company shall not offer to make, agree to make, or
make any payment with respect to any demands for appraisal
without the prior written consent of Parent.
Section 2.4 Company
Stock Options; Other Equity Awards.
(a) Prior to the Effective Time, the Company shall take all
actions necessary to provide that, and shall cause, each option
outstanding immediately prior to the Effective Time (whether or
not then vested or exercisable) that represents the right to
acquire shares of Company Common Stock (each, an
Option) shall at the Effective Time be
cancelled and terminated and converted at the Effective Time
into the right to receive a cash amount equal to the Option
Consideration, if any, for each share of Company Common Stock
then subject to the Option. The Option Consideration shall be
paid by the Surviving Corporation on the Closing Date.
Notwithstanding the foregoing, Parent and the Company shall be
entitled to deduct and withhold from the Option Consideration
otherwise payable such amounts as are required to be deducted
and withheld with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax Law.
For purposes of this Agreement, Option
Consideration means, with respect to any share of
Company Common Stock issuable under a particular Option, an
amount equal to the excess, if any, of (x) the Merger
Consideration per share of Company Common Stock over
(y) the exercise price payable in respect of such share of
Company Common Stock issuable under such Option.
(b) All restrictions and conditions on each share of
restricted stock granted under the Company Stock Plans (the
Company Restricted Stock) that is outstanding
immediately prior to the Closing, other than the Company
Restricted Stock set forth in Section 2.4(b) of the Company
Disclosure Schedule, shall immediately lapse as of, and
conditioned upon, the occurrence of the Closing and the Company
Restricted Stock shall be converted in accordance with
Section 2.1(c).
(c) Each performance unit granted under the Company Stock
Plans (each, a Company Performance Unit) that
is outstanding immediately prior to the Closing, other than the
Company Performance Unit set forth in Section 2.4(c) of the
Company Disclosure Schedule, shall automatically vest in
accordance with the terms of the applicable award agreement and
plan document, and be settled (i) in Company Common Stock
effective as of, and conditioned upon, the occurrence of the
Closing and converted in accordance with
Section 2.1(c) or (ii) to the extent permitted
thereby, in cash by the Surviving Corporation on the Closing
Date.
Section 2.5 Adjustments. Notwithstanding
any provision of this Article II to the contrary, if
between the date of this Agreement and the Effective Time the
outstanding shares of Company Common Stock shall have been
changed into a different number of shares or a different class
by reason of the occurrence or record date of any stock
dividend, subdivision, reclassification, recapitalization,
split, combination, exchange of shares or similar transaction,
the Merger Consideration shall be appropriately equitably
adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination, exchange
of shares or similar transaction.
ARTICLE III
Representations
and Warranties of the Company
The Company represents and warrants to Parent and Merger Sub
that except as disclosed in the disclosure schedule delivered by
the Company to Parent simultaneously with the execution of this
Agreement (the Company Disclosure Schedule)
or in (or incorporated by reference in) the Filed Company SEC
Documents (other than any disclosure in the Company SEC Filings
(x) set forth under Risk Factors or under the
heading Competition, Regulation,
Safety, Available Information,
Safe Harbor Statement Under The Private Securities
Litigation Reform Act, Foreign Exchange
Exposure, or Interest Rate Exposure or
(y) that is not factual information but merely cautionary
language) (it being understood that any matter disclosed in the
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Company Disclosure Schedule or in (or incorporated by reference
in) such Company SEC Documents shall be deemed disclosed with
respect to any Section of this Article III to which
the matter relates, to the extent the relevance of such matter
to such section is reasonably apparent on the face of such
disclosure):
Section 3.1 Organization,
Standing and Corporate Power.
(a) Each of the Company and its Subsidiaries is a
corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction in which it is
incorporated and has all requisite corporate power and authority
necessary to own or lease all of its properties and assets and
to carry on its business as it is now being conducted. Each of
the Company and its Subsidiaries is duly licensed or qualified
to do business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the
character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good
standing, individually or in the aggregate, has not had and
would not reasonably be expected to have a Company Material
Adverse Effect (as defined below). For purposes of this
Agreement, Company Material Adverse Effect
shall mean any change, event, occurrence or effect which has had
or would reasonably be expected to (i) have a material
adverse effect on the results of operations, condition
(financial or otherwise), business, assets or liabilities of
such party and its Subsidiaries taken as a whole, other than
changes, events, occurrences or effects (A) generally
affecting (I) the industry of the Company and its
Subsidiaries, provided that such changes, events,
occurrences or effects do not disproportionately affect such
party and its Subsidiaries, or (II) the economy, or
financial or capital markets, in the United States or elsewhere
in the world, including changes in interest or exchange rates,
or (B) arising out of, resulting from or attributable to
(I) changes in Law or in generally accepted accounting
principles or in accounting standards, or changes in general
legal, regulatory or political conditions, (II) acts of
war, sabotage or terrorism, or any escalation or worsening of
any such acts of war, sabotage or terrorism threatened or
underway as of the date of this Agreement,
(III) earthquakes, hurricanes, tornados or other natural
disasters, (IV) the negotiation, execution, announcement or
performance of this Agreement or the consummation of the
Transactions, including the impact thereof on relationships,
contractual or otherwise, with customers, suppliers,
distributors, partners or employees, or any litigation arising
from allegations of breach of fiduciary duty or violation of Law
relating to this Agreement or the Transactions, (V) any
action taken by the Company or its Subsidiaries as contemplated
or permitted by this Agreement or with Parents consent, or
any failure by the Company to take any action as a result of the
restrictions in Article V, or (VI) any decline
in the market price, or change in trading volume, of the capital
stock of the Company or any failure to meet publicly announced
revenue or earnings projections (with respect to
subclause (VI) of this clause (B), it being understood and
agreed that the facts and circumstances giving rise to such
change, event, occurrence or effect that are not otherwise
excluded from the definition of Company Material Adverse Effect
may be taken into account in determining whether there has been
a Company Material Adverse Effect); provided, that such
changes, events, occurrences or effects referred to in
subclauses (I) (III) of this clause (B) do
not disproportionately affect the Company and its Subsidiaries,
or (ii) impair in any material respect the ability of the
Company to perform its obligations hereunder or prevent or
materially delay consummation of the Transactions.
(b) Section 3.1(b) of the Company Disclosure Schedule
lists all Subsidiaries of the Company together with the
jurisdiction of organization of each such Subsidiary. All the
outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of the Company have been duly
authorized and validly issued and are fully paid and
nonassessable and are owned directly or indirectly by the
Company free and clear of all Liens and transfer restrictions,
except for such transfer restrictions of general applicability
as may be provided under the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (the
Securities Act), and other applicable
securities laws. Except as set forth in Section 3.1(b) of
the Company Disclosure Schedule, the Company does not own,
directly or indirectly, any capital stock, voting securities or
equity interests in any Person.
(c) The Company has prior to the date of this Agreement
delivered to Parent complete and correct copies of the
certificate of incorporation and bylaws of the Company, as
amended to the date of this Agreement (the Company
Charter Documents), and complete and correct copies of
the certificates of incorporation and by-laws (or comparable
organizational documents) of each of its Subsidiaries (the
Subsidiary Documents), in
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each case as amended to the date of this Agreement. All such
Company Charter Documents and Subsidiary Documents are in full
force and effect and neither the Company nor any of its
Subsidiaries is in violation of any of their respective
provisions. The Company has prior to the date of this Agreement
made available to Parent and its Representatives correct and
complete copies of all finalized minutes of all meetings, and
actions taken by written consent in lieu of a meeting, of
stockholders, the board of directors and each committee of the
board of directors of the Company held since January 1,
2008.
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
50,000,000 shares of Company Common Stock and
10,000,000 shares of preferred stock, par value $.01 per
share (Company Preferred Stock). At the close
of business on November 17, 2010,
(i) 9,725,426 shares of Company Common Stock were
issued and outstanding, (ii) no shares of Company Common
Stock were held by the Company in its treasury,
(iii) 1,519,200 shares of Company Common Stock were
reserved for issuance under the Company Stock Plans (of which
526,564 shares of Company Common Stock were subject to
outstanding Options granted under the Company Stock Plans,
68,836 shares of Company Common Stock were subject to
Company Restricted Stock and 122,417 shares of Company
Common Stock were subject to unvested Company Performance Units)
and (iv) no shares of Company Preferred Stock were issued
or outstanding. All outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid
and nonassessable and were not issued in violation of any
preemptive rights or of any federal or state securities law.
Included in Section 3.2(a) of the Company Disclosure
Schedule is a correct and complete list, as of November 17,
2010, of all outstanding options or other rights to purchase or
receive shares of Company Common Stock granted under the Company
Stock Plans, and, for each such option or other right, the
number of shares of Company Common Stock subject thereto, the
terms of vesting, the grant and expiration dates and exercise
price thereof and the name of the holder thereof. Except as set
forth in the second or fourth sentence of this
Section 3.2(a), as of the date of this Agreement,
there are no outstanding shares of the Companys capital
stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock. Except
(A) as set forth above in the second or fourth sentence of
this Section 3.2(a) or (B) as otherwise
expressly permitted by Section 5.2 hereof, as of the
date of this Agreement there are not, and as of the Effective
Time there will not be, any shares of capital stock, voting
securities or equity interests of the Company issued and
outstanding or any subscriptions, phantom stock,
RSUs, stock appreciation rights, options, warrants, calls,
convertible or exchangeable securities, rights, commitments or
agreements of any character providing for the issuance of any
shares of capital stock, voting securities or equity interests
of the Company, including any representing the right to purchase
or otherwise receive any Company Common Stock.
(b) None of the Companys Subsidiaries has issued or
is bound by any outstanding subscriptions, phantom
stock, RSUs, stock appreciation rights, options, warrants,
calls, convertible or exchangeable securities, rights,
commitments or agreements of any character providing for the
issuance or disposition of any shares of capital stock, voting
securities or equity interests of any Subsidiary of the Company.
There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock, voting securities or equity interests
(or any options, warrants or other rights to acquire any shares
of capital stock, voting securities or equity interests) of the
Company or any of its Subsidiaries. Except as set forth in
Section 3.2(b) of the Company Disclosure Schedule, the
Company directly or indirectly owns all of the outstanding
capital stock of each of its Subsidiaries, free and clear of any
and all Liens and transfer restrictions, except for such
transfer restrictions of general applicability as may be
provided under the Securities Act. All outstanding equity
interests of the Companys Subsidiaries have been duly
authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive
rights or of any federal or state securities law or of any
federal, state or provincial securities laws, domestic or
foreign.
Section 3.3 Authority;
Noncontravention; Voting Requirements.
(a) The Company has all necessary corporate power and
authority to terminate the Prior Merger Agreement, pay the
No-Shop Termination Fee (as defined in the Prior
Merger Agreement), execute and deliver this Agreement and to
perform its obligations hereunder and, subject to obtaining the
Company
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Stockholder Approval, to consummate the Transactions. The
termination of the Prior Merger Agreement, the payment of the
No-Shop Termination Fee (as defined in the Prior
Merger Agreement), the execution, delivery and performance by
the Company of this Agreement, and the consummation by it of the
Transactions, have been duly authorized and approved by its
board of directors, and no other corporate action on the part of
the Company or its stockholders is necessary to authorize the
termination of the Prior Merger Agreement, the payment of the
No-Shop Termination Fee (as defined in the Prior
Merger Agreement), and, except for obtaining the Company
Stockholder Approval, no other corporate action on the part of
the Company or its stockholders is necessary to authorize the
execution, delivery and performance by the Company of this
Agreement and the consummation by it of the Transactions. This
Agreement has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery hereof
by the other parties hereto, constitutes a legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating
to the enforcement of creditors rights generally and
(ii) is subject to general principles of equity, whether
considered in a proceeding at law or in equity (the
Bankruptcy and Equity Exception).
(b) The Companys board of directors, at a meeting
duly called and held on or prior to the date of this Agreement,
has unanimously (i) determined in accordance with
Section 5.3 of the Prior Merger Agreement that the Merger
and the consummation of the Transactions constitute a
Superior Proposal (as defined in the Prior Merger
Agreement); (ii) determined in accordance with
Section 5.3 of the Prior Merger Agreement that failure to
enter into this Agreement would violate the directors
fiduciary duties to the Companys stockholders under
applicable Law; (iii) determined that it is advisable and
in the best interests of the Company and its stockholders to
terminate the Prior Merger Agreement (in accordance with
Section 7.1(d)(ii) of the Prior Merger Agreement), to pay
the No-Shop Termination Fee (as defined in the Prior
Merger Agreement) and to enter into this Agreement;
(iv) determined that the termination of the Prior Merger
Agreement (in accordance with Section 7.1(d)(ii) of the
Prior Merger Agreement), the payment of the No-Shop
Termination Fee (as defined in the Prior Merger
Agreement), the entry into of this Agreement and the
Transactions are fair to, and in the best interests of, the
Company and its stockholders; (v) approved the termination
of the Prior Merger Agreement (in accordance with
Section 7.1(d)(ii) of the Prior Merger Agreement), the
payment of the
No-Shop
Termination Fee (as defined in the Prior Merger Agreement)
and the execution, delivery and performance by the Company of
this Agreement and the consummation of the Transactions,
including the Merger; and (vi) resolved to recommend
adoption of this Agreement by the stockholders of the Company.
(c) Neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the
Transactions, nor compliance by the Company with any of the
terms or provisions hereof, will (with or without the giving of
notice, the lapse of time, or both) (i) conflict with or
violate any provision of the Company Charter Documents or any of
the Subsidiary Documents or (ii) assuming that the
authorizations, consents and approvals referred to in
Section 3.4 and the Company Stockholder Approval are
obtained and the filings referred to in Section 3.4
are made, (x) conflict with or violate any Law, judgment,
writ or injunction of any Governmental Authority applicable to
the Company or any of its Subsidiaries or to which any of their
assets are subject, except for such conflicts or violations as
individually and in the aggregate are inconsequential or
(y) violate or constitute a default under or result in or
permit the modification, revocation, cancellation, termination
or acceleration of rights under, any of the terms, conditions or
provisions of any loan or credit agreement, debenture, note,
bond, mortgage, indenture, deed of trust, lease, contract or
other agreement (each, a Contract) to which
the Company or any of its Subsidiaries is a party or by which
any of their assets are bound, except, in the case of clause
(ii)(y), for such violations or defaults as individually or in
the aggregate, has not had and would not reasonably be expected
to have a Company Material Adverse Effect. Neither the execution
and delivery of this Agreement by the Company nor the
consummation by the Company of the Transactions, nor compliance
by the Company with any of the terms or provisions hereof, will
(with or without the giving of notice, the lapse of time, or
both) violate or constitute a default under any of the terms,
conditions or provisions of the Prior Merger Agreement.
(d) The affirmative vote (in person or by proxy) of the
holders of a majority of the outstanding shares of Company
Common Stock at the Company Stockholders Meeting, or any
adjournment or postponement thereof,
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in favor of the adoption of this Agreement (the Company
Stockholder Approval) is the only vote or approval of
the holders of any class or series of capital stock of the
Company or any of its Subsidiaries which is necessary to adopt
this Agreement and approve the Transactions.
Section 3.4 Governmental
Approvals. Except for (a) the filing
with the SEC of a proxy statement relating to the Company
Stockholders Meeting (as amended or supplemented from time to
time, the Proxy Statement), and other filings
required under, and compliance with other applicable
requirements of, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
(the Exchange Act), and the rules of the
Nasdaq Stock Market LLC, (b) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, (c) filings required under, and
compliance with other applicable requirements of, the HSR Act
and (d) filings required under, and compliance with other
applicable requirements of,
non-U.S. Laws
intended to prohibit, restrict or regulate actions or
transactions having the purpose or effect of monopolization,
restraint of trade, harm to competition or effectuating
investment, including, without limitation, the Competition Act
and the Canada Transportation Act (collectively,
Foreign Antitrust Laws), no consents or
approvals of, or filings, declarations or registrations with,
any Governmental Authority are necessary for the execution and
delivery of this Agreement by the Company and the consummation
by the Company of the Transactions, other than such other
consents, approvals, filings, declarations or registrations
that, if not obtained, made or given, individually or in the
aggregate, have not had and would not reasonably be expected to
have a Company Material Adverse Effect.
Section 3.5 Company
SEC Documents; Undisclosed Liabilities.
(a) The Company has timely filed all required reports,
schedules, forms, certifications, prospectuses and registration,
proxy and other statements with the SEC since July 31, 2007
(collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference
therein, the Company SEC Documents). None of
the Companys Subsidiaries is required to file periodic
reports with the SEC pursuant to the Exchange Act. As of their
respective effective dates (in the case of Company SEC Documents
that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective
SEC filing dates (in the case of all other Company SEC
Documents), the Company SEC Documents complied as to form in all
material respects with the requirements of the Exchange Act and
the Securities Act, as the case may be, applicable to such
Company SEC Documents, and none of the Company SEC Documents as
of such respective dates (or, if amended prior to the date of
this Agreement, the date of the filing of such amendment, with
respect to the disclosures that are amended) contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated financial statements of the Company
included in the Company SEC Documents have been prepared in
accordance with GAAP (except, in the case of unaudited quarterly
statements, as indicated in the notes thereto) applied on a
consistent basis during the periods involved (except (i) as
may be indicated in the notes thereto or (ii) as permitted
by
Regulation S-X)
and fairly present in all material respects the consolidated
financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited interim statements, to
normal year-end audit adjustments that are not, in the
aggregate, material).
(c) The Company has established and maintains internal
control over financial reporting and disclosure controls and
procedures (as such terms are defined in
Rule 13a-15
and
Rule 15d-15
under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the
Companys principal executive officer and its principal
financial officer to allow timely decisions regarding required
disclosure; and such disclosure controls and procedures are
effective to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms. The
Companys principal executive officer and its principal
financial officer have disclosed, based on their most recent
evaluation, to the Companys auditors and the audit
committee of the board of directors of the Company (x) all
significant
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deficiencies in the design or operation of internal controls
which could adversely affect the Companys ability to
record, process, summarize and report financial data and have
identified for the Companys auditors any material
weaknesses in internal controls and (y) any fraud, whether
or not material, that involves management or other employees who
have a significant role in the Companys internal controls.
The principal executive officer and the principal financial
officer of the Company have timely made all certifications
required by the Sarbanes-Oxley Act, the Exchange Act and any
related rules and regulations promulgated by the SEC with
respect to the Company SEC Documents, and the statements
contained in such certifications are complete and correct. The
management of the Company has completed its assessment of the
effectiveness of the Companys internal control over
financial reporting in compliance with the requirements of
Section 404 of the Sarbanes-Oxley Act for the year ended
July 31, 2010, and such assessment concluded that such
controls were effective.
(d) Since July 31, 2007, neither the Company nor, to
the Knowledge of the Company, any Representative of the Company
or any of its Subsidiaries has received any complaint,
allegation, assertion or claim, whether written or oral,
regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company and its Subsidiaries
with respect to the Companys consolidated financial
statements included in the Company SEC Documents or the internal
accounting controls of the Company and its Subsidiaries,
including any written or oral complaint, allegation, assertion
or claim that the Company or any of its Subsidiaries has engaged
in questionable accounting or auditing practices. To the
Knowledge of the Company, no attorney representing the Company
or any of its Subsidiaries, whether or not employed by the
Company or any of its Subsidiaries, has reported evidence of a
material violation of securities laws, breach of fiduciary duty
or similar violation by the Company or its Subsidiaries or any
of their respective Representatives to the Companys board
of directors or any committee thereof or to any director or
officer of the Company or any of its Subsidiaries.
(e) To the Knowledge of the Company, no employee of the
Company or any of its Subsidiaries has provided or is providing
information to any law enforcement agency regarding the
commission or possible commission of any crime or the violation
or possible violation of any Law. Since July 31, 2007, the
Company and its Subsidiaries have not, and, to the Knowledge of
the Company, no contractor, subcontractor or agent of the
Company or any of its Subsidiaries, has discharged, demoted,
suspended, threatened, harassed or in any other manner
discriminated against an employee of the Company or any of its
Subsidiaries in the terms and conditions of employment because
of any act of such employee described in 18 U.S.C.
§ 1514A(a).
(f) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature whatsoever (whether
direct or indirect, fixed or contingent, known or unknown, due
or to become due, accrued or otherwise, and whether or not
determined or determinable), except (i) liabilities
reflected or reserved against on the audited balance sheet of
the Company and its Subsidiaries as of July 31, 2010 (the
Balance Sheet Date) (including the notes
thereto) included in the Filed Company SEC Documents,
(ii) current liabilities incurred after the Balance Sheet
Date in the ordinary course of business consistent with past
practice, (iii) liabilities contemplated by this Agreement
or otherwise in connection with the Transactions or
(iv) liabilities that, individually or in the aggregate,
have not had and would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has any liabilities or obligations of any
nature whatsoever (whether direct or indirect, fixed or
contingent, known or unknown, due or to become due, accrued or
otherwise, and whether or not determined or determinable) under
or with respect to the Prior Merger Agreement other than the
payment of the No-Shop Termination Fee (as defined
in the Prior Merger Agreement).
Section 3.6 Absence
of Certain Changes. Since the Balance Sheet
Date and except as set forth in Section 3.6 of the Company
Disclosure Schedule:
(a) the Company has carried on and operated its businesses
in the ordinary course of business consistent with past practice;
(b) there have not been any events, changes or occurrences
that, individually or in the aggregate, have had or are
reasonably likely to have a Company Material Adverse
Effect; or
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(c) there has not been any action taken by the Company or
any of its Subsidiaries that would have required the consent of
Parent under Section 5.2 if such action was taken
after the date of this Agreement.
Section 3.7 Legal
Proceedings. Except as set forth in
Section 3.7 of the Company Disclosure Schedule, there is no
pending or, to the Knowledge of the Company, threatened,
investigation, legal or administrative proceeding, claim, suit,
arbitration or action (Action) against the
Company or any of its Subsidiaries, nor is there any injunction,
order, judgment, ruling or decree imposed (or, to the Knowledge
of the Company, threatened to be imposed) upon the Company or
any of its Subsidiaries, in each case, by or before any
Governmental Authority, that, individually or in the aggregate,
has had or would reasonably be expected to have a Company
Material Adverse Effect or to prevent or delay in any material
respect the consummation of the Transactions.
Section 3.8 Compliance
With Laws; Permits. The Company and its
Subsidiaries are in compliance with all laws (including common
law), statutes, ordinances, codes, rules, regulations, decrees
and orders of Governmental Authorities (collectively,
Laws) applicable to the Company or any of its
Subsidiaries, except for such non-compliance as, individually or
in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect. The Company
and each of its Subsidiaries hold all licenses, franchises,
permits, certificates, approvals and authorizations from
Governmental Authorities necessary for the lawful conduct of
their respective businesses (collectively,
Permits), except where the failure to hold
the same, individually or in the aggregate, has not been and
would not be material to the Company and its Subsidiaries, taken
as a whole. To the Knowledge of the Company, the Company and its
Subsidiaries are in compliance with the terms of all Permits in
all material respects. Since July 31, 2007, neither the
Company nor any of its Subsidiaries has received written notice
to the effect that a Governmental Authority (a) claimed or
alleged that the Company or any of its Subsidiaries was not in
compliance with all Laws applicable to the Company or any of its
Subsidiaries or (b) was considering the amendment,
termination, revocation or cancellation of any Permit.
Section 3.9 Information
Supplied. The Proxy Statement will not, when
filed with the SEC, on the date it is mailed to stockholders of
the Company and at the time of the Company Stockholders Meeting
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The
Proxy Statement will on the date of filing comply as to form in
all material respects with the applicable requirements of the
Exchange Act. Notwithstanding the foregoing, the Company makes
no representation or warranty with respect to information
supplied by or on behalf of Parent or Merger Sub expressly for
inclusion or incorporation by reference in the Proxy Statement.
Section 3.10 Tax
Matters.
(a) With such exceptions as, individually or in the
aggregate, have not had and are not reasonably likely to have a
Company Material Adverse Effect, (i) each of the Company,
its Subsidiaries and any consolidated, combined or unitary group
of which the Company or any of its Subsidiaries is or was a
member (A) have timely filed Tax Returns required to be
filed by them, and (B) all Taxes required to be paid by
them have been timely paid by them (after giving effect to any
valid extensions of time in which to make such filings),
(ii) such Tax Returns are true, correct and complete in all
material respects and (iii) all material Taxes required to
be withheld by the Company or any of its Subsidiaries have been
withheld and have been (or will be) duly and timely paid to the
proper Governmental Authority, and the Company and each of its
Subsidiaries have complied with all material information
reporting requirements.
(b) Except as set forth in Section 3.10(b) of the
Company Disclosure Schedule, none of the Tax Returns filed by
the Company or any of its Subsidiaries in the past five
(5) years, or Taxes payable by the Company or any of its
Subsidiaries in the past five (5) years, have been the
subject of an audit, action, suit, proceeding, claim,
examination, deficiency or assessment by any Governmental
Authority, and no such audit, action, suit, proceeding, claim,
examination, deficiency or assessment is currently pending, nor
has the Company or any of its Subsidiaries received any written
notice of any threatened audit, action, suit, proceeding, claim,
examination, deficiency or assessment. Neither the Company nor
any of its Subsidiaries has waived any statute of
A-11
limitation with respect to any Tax or agreed to any extension of
time with respect to a Tax assessment or deficiency.
(c) There are no Liens for Taxes upon any of the
Companys or any of its Subsidiaries assets, other
than Liens for Taxes not yet due and payable or for Taxes that
are being contested in good faith through appropriate
proceedings and for which appropriate reserves have been made in
accordance with GAAP.
(d) Neither the Company nor any of its Subsidiaries is
subject to any private letter ruling or closing agreement of the
Internal Revenue Service (the IRS) or
comparable rulings of any Governmental Authority.
(e) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355
of the Code in the two (2) years prior to the date of this
Agreement.
(f) Neither the Company nor any of its Subsidiaries has
ever been a member of a group filing a consolidated federal
income Tax Return or a combined, consolidated, unitary or other
affiliated group Tax Return for state, local or
non-U.S. Tax
purposes (other than a group the common parent of which is the
Company), and neither the Company nor any of its Subsidiaries
has any material liability for the Taxes of any Person (other
than the Company and its Subsidiaries) under Treasury
Regulation Section 1.1502-6
(or any corresponding provision of state, local or
non-U.S. Tax
law), as a transferee or successor, by Contract or otherwise.
Neither the Company nor any or its Subsidiaries is a party to or
is bound by any Tax sharing, indemnification or allocation
agreement or arrangement (other than such agreement or
arrangement exclusively between or among the Company and its
Subsidiaries).
(g) To the Knowledge of the Company, no claim has been made
within the past three (3) years (or before, if such claim
has not been resolved) by a Governmental Authority in a
jurisdiction where the Company or any of its Subsidiaries do not
file Tax Returns that either the Company or any of its
Subsidiaries is or may be subject to Taxes assessed by such
jurisdiction.
(h) Neither of the Company nor any of its Subsidiaries has
agreed or is required to make any adjustment under
Section 481(a) of the Code by reason of a change in
accounting method.
(i) Dynamex Canada Limited and Dynamex Canada Franchise
Holdings Inc. (A) are foreign corporations within the
meaning of section 7701 of the Code, (B) are not
engaged in a United States trade or business within the meaning
of section 864 of the Code, (C) have no material
investment in United States property within the meaning of
section 956 of the Code, and (D) have not participated
in, or cooperated with, an international boycott within the
meaning of section 999 of the Code.
(j) With such exceptions as, individually or in the
aggregate, have not had and are not reasonably likely to have a
Company Material Adverse Effect, neither the Company nor any of
its Subsidiaries has participated in any reportable
transaction as defined under Treasury Regulation
section 1.6011-4
or is required to maintain a list pursuant to Treasury
Regulations
sections 301.6112-1.
Section 3.11 Employee
Benefits and Labor Matters.
(a) Section 3.11(a) of the Company Disclosure Schedule
lists (i) each employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (ERISA)) and
(ii) any other material Company Plan, but excluding any
individual award or participation agreements under any Company
Plan (collectively, Individual Agreements).
Section 3.11(a) of the Company Disclosure Schedule
separately designates such Company Plans as primarily covering
employees in the United States (U.S. Company
Plans) or outside of the United States
(Non-U.S. Company
Plans). None of the Company Plans is subject to
Title IV of ERISA, and neither the Company nor any of its
Subsidiaries has any potential liability under Title IV of
ERISA. Neither the Company nor any of its Subsidiaries is
required to contribute to a multiemployer plan (as
defined in Section 3(37) of ERISA or under any pension
legislation in any of the provinces of Canada). The Company has
prior to the date of this Agreement made available to Parent
correct and complete copies of each material Company Plan and
each Company Plan that relates primarily to management of the
Company and its Subsidiaries (or, in the case of any such
Company Plan that is unwritten,
A-12
written descriptions thereof), in each case, other than
Individual Agreements that contain terms and conditions
identical to those of other Individual Agreements that have been
made available to Parent prior to the date of this Agreement and
with respect to each such plan, if applicable: (i) the most
recent annual reports on Form 5500 (including all required
schedules), (ii) the most recent summary plan description,
(iii) the most recent determination letter from the
Internal Revenue Service or other governmental authority,
(iv) the most recent trust agreement, and (v) the most
recent insurance contract. Each Company Plan has been
administered in accordance with its terms and the applicable
provisions of ERISA, the Code and all other applicable Laws,
except for any instances of noncompliance that, individually or
in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect. All Company
Plans that are intended to be tax qualified under
Section 401(a) of the Code or tax or pension legislation in
Canada (each, a Company Pension Plan) is so
qualified and, to the Knowledge of the Company, no event has
occurred since the date of the most recent determination letter
or application therefor relating to any such Company Pension
Plan that would adversely affect the qualification of such
Company Pension Plan, except for non-compliance which,
individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect. All
contributions, premiums and benefit payments under or in
connection with the Company Plans that are required to have been
made as of the date of this Agreement in accordance with the
terms of the Company Plans have been timely made or have been
reflected on the most recent consolidated balance sheet filed or
incorporated by reference into the Company SEC Documents. The
Company has prior to the date of this Agreement made available
to Parent correct and complete copies of any currently effective
policies, surety bonds or letters of credit relating to workers
compensation (including any similar obligations under Canadian
laws).
(b) Except as set forth in Section 3.11(b) of the
Company Disclosure Schedule, neither the execution of this
Agreement nor the consummation of the transactions contemplated
by this Agreement, will (i) increase the amount of benefits
otherwise payable under any Company Plan, (ii) result in
the acceleration of the time of payment, exercisability, funding
or vesting of any such benefits, or (iii) result in any
payment (whether severance or otherwise) becoming due to, or
with respect to, any current or former employee, Independent
Contractor or director of the Company or its Subsidiaries.
Subject to the assumptions and methods set forth in the
worksheets provided to Parent prior to the date of this
Agreement, no payment or series of payments that would
constitute an excess parachute payment (within the
meaning of Section 280G of the Code) has been made or will
be made by the Company, directly or indirectly, to any employee
in connection with the execution of this Agreement or as a
result of the consummation of the transactions contemplated
hereby.
(c) Except as set forth in Section 3.11(c) of the
Company Disclosure Schedule, as of the date of this Agreement,
(i) no employees or Independent Contractors of the Company
or its Subsidiaries are covered by a collective bargaining
agreement, (ii) no employees or Independent Contractors of
the Company or its Subsidiaries are, or within the last three
years have been, represented by a union or other bargaining
agent, and (iii) to the Knowledge of the Company, no
employee or union organizing efforts are pending with respect to
employees or Independent Contractors of the Company or its
Subsidiaries. The Company has prior to the date of this
Agreement made available to the Parent a complete and correct
copy of any collective bargaining agreement applicable to
employees or of the Company or its Subsidiaries. Except as set
forth in Section 3.11(d) of the Company Disclosure
Schedule, within the three years preceding the date of this
Agreement, there has been no strike, work slowdown or other
material labor dispute with respect to employees or Independent
Contractors of the Company or its Subsidiaries, nor to the
Knowledge of the Company is any strike, work slowdown or other
material labor dispute pending.
(d) The Company and its Subsidiaries are in compliance in
all material respects with all Laws with respect to labor
relations, employment and employment practices, occupational
safety and health standards, terms and conditions of employment,
payment of wages, classification of employees (including the
proper classification of independent contractors, dependent
contractors and consultants), immigration, visa, work status,
human rights, pay equity, employment equity and workers
compensation, and are not engaged in any unfair labor practices
in connection with the conduct of the business, except for
non-compliance which, individually or in the aggregate, has not
had and would not reasonably be expected to have a Material
Adverse Effect.
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(e) None of the Company or its Subsidiaries is obligated to
provide a
gross-up
payment or benefit to any employee or former employee is respect
of taxes, interest or penalties incurred under Section 409A
of the Code.
Section 3.12 Environmental
Matters.
(a) Except for those matters that, individually or in the
aggregate, have not had and would not reasonably be expected to
have a Company Material Adverse Effect, (i) each of the
Company and its Subsidiaries is in compliance with all
applicable Environmental Laws, (ii) there is no Action
relating to or arising under Environmental Laws that is pending
or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries or any real property leased
by the Company or any of its Subsidiaries, and
(iii) neither the Company nor any of its Subsidiaries has
received any notice of or entered into any obligation,
liability, order, settlement, judgment, injunction or decree
involving uncompleted, outstanding or unresolved requirements
relating to or arising under Environmental Laws.
(b) The Company has prior to the date of this Agreement
provided or made available to Parent: (i) all nonidentical
copies of all material reports, studies, analyses or tests, and
any results of monitoring programs, in the possession or control
of the Company prepared within the last two (2) years with
respect to compliance with Environmental Laws or the generation,
storage, use, handling, transportation, treatment, emission,
spillage, disposal, release or removal of Hazardous Materials
at, in or under any of the Companys or its
Subsidiaries properties; and (ii) a copy of any
environmental investigation or assessment conducted by the
Company or any of its Subsidiaries within the past three
(3) years, with respect to the Companys or any of its
Subsidiaries properties.
Section 3.13 Intellectual
Property.
(a) For purposes of this Agreement:
(i) Company Intellectual Property shall
mean all Company Owned Intellectual Property Rights and all
other Intellectual Property Rights used in the conduct of the
business of the Company or any of its Subsidiaries.
(ii) Company Owned Intellectual Property
shall mean all Intellectual Property Rights in which the Company
or any of its Subsidiaries has an ownership interest, which,
includes, for the avoidance of doubt, the Company Registered
Intellectual Property.
(iii) Company Owned Software shall mean
any Software in which the Company or any of its Subsidiaries has
an ownership interest.
(iv) Company Registered Intellectual
Property shall mean all issued Patents, pending Patent
applications, registered Marks, pending applications for
registration of Marks, registered Copyrights, pending
applications for registration of Copyrights, and Internet domain
names owned, filed, registered or applied for by the Company or
any of its Subsidiaries.
(v) Intellectual Property Rights shall
mean all of the rights arising from or in respect of the
following, whether protected, created or arising under the Laws
of the United States or any foreign jurisdiction or under any
international convention: (A) patents, patent applications
and any reissues, reexaminations, divisionals, provisionals,
continuations,
continuations-in-part,
substitutions and extensions of any of the foregoing
(collectively, Patents); (B) trademarks,
service marks, trade names, brand names, trade dress, logos,
corporate names and other source or business identifiers,
together with all goodwill associated with the foregoing
(collectively, Marks); (C) copyrights
and works of authorship, including all moral rights and droit
moral (collectively, Copyrights);
(D) Internet domain names; (E) trade secrets and
confidential business information (including pricing and cost
information, business and marketing plans and customer and
supplier lists) and know-how (including processing, servicing,
manufacturing and production processes and techniques and
research and development information), in each case excluding
any rights in respect of any of the foregoing that comprise or
are protected by Patents (Trade Secrets);
(F) computer programs, whether in source or object code,
and databases and computer files containing data
(Software); (G) utility models and
industrial
A-14
designs; and (H) applications, registrations, renewals,
reversions and extensions of any of the foregoing in
clauses (A) through (G).
(b) Section 3.13(b) of the Company Disclosure Schedule
sets forth an accurate and complete list of all Company
Registered Intellectual Property, including (i) the name,
description or title (as applicable), (ii) nature of right
(e.g., Patent, Copyright, Mark or Internet domain name),
(iii) the registration or application date and number (as
applicable) and (iv) the jurisdiction in which such item of
Company Registered Intellectual Property has been issued or
registered or is pending.
(c) Section 3.13(c) of the Company Disclosure Schedule
sets forth an accurate and complete list of the application
names of computer programs included in (i) all Company
Owned Software and (ii) Software that the Company or one of
its Subsidiaries is granted a license to use from third parties
(excluding commercially available Software that is licensed to
the Company or the relevant Subsidiary for a total license fee
or royalty of less than $10,000), in each instance in the
foregoing (i) and (ii), that is material to the conduct of
the business of the Company or any of its Subsidiaries.
(d) With such exceptions as, individually or in the
aggregate, have not had and are not reasonably likely to have a
Company Material Adverse Effect, and except as set forth on
Section 3.13(d) of the Company Disclosure Schedule:
(i) the Company or one of its Subsidiaries is the sole and
exclusive owner of, or has a valid right or license to use, all
Company Intellectual Property as such Company Intellectual
Property is used by the Company or any of its Subsidiaries in
its respective business as currently conducted; (ii) all
Company Owned Intellectual Property is free and clear of all
Liens; (iii) to the Knowledge of the Company, all issuances
and registrations for any Company Registered Intellectual
Property are valid and enforceable; and (iv) to the
Knowledge of the Company, all necessary registration,
maintenance, renewal and other filing fees, documents and
certificates have been paid or filed with the relevant
Governmental Authority for the purpose of obtaining, maintaining
or renewing any registrations and applications for registration
included in the Company Registered Intellectual Property.
(e) With such exceptions as, individually or in the
aggregate, have not had and are not reasonably likely to have a
Company Material Adverse Effect, to the Knowledge of the
Company, none of the Company Owned Intellectual Property
infringes or otherwise violates any Intellectual Property Rights
of any other Person. To the Knowledge of the Company, neither
the Company nor any of its Subsidiaries (i) is a party to
or the subject of any pending or threatened suit, action,
investigation or proceeding which involves a claim against the
Company or any of its Subsidiaries of infringement, unauthorized
use, misappropriation or violation of any Intellectual Property
Rights of any other Person or challenging the ownership, use,
validity or enforceability of any material Company Intellectual
Property or (ii) has received written notice of any such
threatened claim.
(f) To the Knowledge of the Company, (i) no Person is
infringing, violating or misappropriating any material Company
Owned Intellectual Property and (ii) neither the Company
nor any of its Subsidiaries has made any written claim of
infringement, violation or misappropriation of any material
Company Owned Intellectual Property.
(g) Each of the Company and its Subsidiaries has taken
commercially reasonable measures to protect and preserve the
confidentiality of all material Trade Secrets and other material
non-public, confidential and proprietary information owned by
the Company or any of its Subsidiaries (and any material
confidential information owned by any other Person for which the
Company or any of its Subsidiaries has written confidentiality
obligations to such other Person with respect thereto).
(h) No open source or public library Software, including
any version of any Software licensed pursuant to any GNU public
license or otherwise, was used in the development or
modification of any Company Owned Software where, as a result of
such use or modification of such open source or public library
Software, the Company or its Subsidiaries is obligated under the
applicable license agreement for the use of such open source or
public library Software to (i) make the source code for
such Company Owned Software available to any third party or
(ii) refrain from imposing restrictions as to duplication,
modification, distribution, use or reverse engineering of the
Company Owned Software by its licensees or other third parties.
A-15
Section 3.14 Contracts.
(a) Set forth in Section 3.14(a) of the Company
Disclosure Schedule is a list, as of the date of this Agreement,
of (i) each Contract that would be required to be filed as
an exhibit to a Registration Statement on
Form S-1
under the Securities Act or an Annual Report on
Form 10-K
under the Exchange Act if such registration statement or report
was filed by the Company with the SEC on the date of this
Agreement, and (ii) each of the following to which the
Company or any of its Subsidiaries is a party or otherwise
bound: (A) any Contract that contains a non-competition
provision or that otherwise purports to limit, curtail or
restrict the ability of the Company or any of its Subsidiaries
(or, after the Effective Time, Parent or any of its Affiliates)
to compete in any geographic area or line of business or
restrict the Persons to whom the Company or any of its
Subsidiaries may sell products or deliver services, (B) any
Contract that grants any third party most favored
nation status or the exclusive right to deal with the
Company or any of its Subsidiaries that involves total
consideration in excess of $2,500,000 annually, (C) any
partnership or joint venture agreement, (D) any Contract
not in the ordinary course of business consistent with past
practice for the acquisition, sale or lease of properties or
assets (by merger, purchase or sale of stock or assets or
otherwise) entered into since July 31, 2007, (E) any
Contract with any (x) Governmental Authority that involves
total consideration in excess of $1,000,000 annually or
(y) director or officer of the Company or any of its
Subsidiaries or any Affiliate of the Company, (F) any loan
or credit agreement, mortgage, indenture, note or other Contract
or instrument evidencing Indebtedness of the Company or any of
its Subsidiaries, in each case of greater than $100,000
individually or $500,000 in the aggregate for all such
Contracts, (G) any financial derivatives master agreement
or confirmation, or futures account opening agreements
and/or
brokerage statements, evidencing financial hedging or similar
trading activities, (H) any voting agreement or
registration rights agreement, (I) any mortgage, pledge,
security agreement, deed of trust or other Contract granting a
Lien on any property or assets of the Company or any of its
Subsidiaries that involves total consideration in excess of
$25,000, (J) any (1) customer or client Contract that
involves total consideration in excess of $2,500,000 annually
(other than purchase orders issued (or received) for the
purchase or sale of goods in the ordinary course of business
consistent with past practice) and (2) supply Contract that
involves total consideration in excess of $500,000 annually
(other than purchase orders issued (or received) for the
purchase or sale of goods in the ordinary course of business
consistent with past practice), (K) any collective
bargaining agreement, (L) any standstill or
similar agreement, (M) any Contract that restricts or
otherwise limits the payment of dividends or other distributions
on equity securities, (N) any to the extent material to the
business or financial condition of the Company and its
Subsidiaries, taken as a whole, (1) any indemnification
Contract, (2) any sales representative or distribution
Contract or (3) any Contract granting a right of first
refusal or first negotiation, (O) any Contract pursuant to
which the Company or any of its Subsidiaries is granted a
license to use any Company Intellectual Property from third
parties (excluding Contracts pertaining to commercially
available Software that is licensed to the Company or the
relevant Subsidiary for a total license fee or royalty of less
than $100,000), (P) any Contract pursuant to which the
Company leases, licenses or otherwise obtains the right to use
any real property and such Contract involves annual base rental
payments in excess of $250,000 and (Q) any commitment or
agreement to enter into any of the foregoing (the Contracts and
other documents required to be listed on Section 3.14(a) of
the Company Disclosure Schedule, together with any and all other
Contracts of such type entered into in accordance with
Section 5.2, each a Company Material
Contract). The Company has prior to the date of this
Agreement made available to Parent correct and complete copies
of each Company Material Contract in existence as of the date of
this Agreement, together with any and all amendments and
supplements thereto.
(b) Except as set forth in Section 3.14(b)(1) of the
Company Disclosure Schedule and with such exceptions as,
individually or in the aggregate, have not had and are not
reasonably likely to have a Company Material Adverse Effect:
(i) each Contract to which the Company or any of its
Subsidiaries is a party (collectively, the Company
Contracts) is valid, binding and in full force and
effect and is enforceable in accordance with its terms by the
Company and its Subsidiaries party thereto, subject to the
Bankruptcy and Equity Exception; (ii) neither the Company
nor any of its Subsidiaries is in default under any Company
Contract, nor does any condition exist that, with notice or
lapse of time or both, would constitute a default thereunder by
the Company and its Subsidiaries party thereto; (iii) to
the Knowledge of the Company, no other party to any Company
Contract is in default thereunder, nor does any condition exist
that with notice or lapse
A-16
of time or both would constitute a default by any such other
party thereunder; and (iv) neither the Company nor any of
its Subsidiaries has received any notice of termination or
cancellation under any Company Contract, received any notice of
breach or default under any Company Contract which breach or
default has not been cured, or granted to any third party any
rights, adverse or otherwise, that would constitute a breach of
any Company Contract. Except as set forth in
Section 3.14(b)(2) of the Company Disclosure Schedule,
(i) no approval, consent or waiver of any Person is needed
in order that any Company Material Contract continue in full
force and effect following the consummation of the Transactions
and (ii) no approval, consent or waiver of any Person is
needed in order that any Contract, other than any Company
Material Contract, continue in full force and effect following
the consummation of the Transactions except, in the case of this
clause (ii), for such approvals, consents or waivers the failure
to obtain, individually or in the aggregate, have not and are
not reasonable likely to have a Company Material Adverse Effect.
Section 3.15 Properties.
(a) Each of the Company and its Subsidiaries (i) has
good and valid title (or such lesser interest that is the
maximum permitted by applicable Law) to all of their respective
properties and other assets (other than properties and assets
that are, individually and in the aggregate, inconsequential)
free and clear of all Liens except (A) statutory liens
securing payments not yet due, (B) security interests,
mortgages and pledges that secure indebtedness that is reflected
in the most recent consolidated financial statements of the
Company included in the Filed Company SEC Documents and
(C) such other imperfections or irregularities of title or
other Liens that would not reasonably be expected to materially
affect the use of the properties or assets subject thereto or
otherwise impair in any material respect business operations as
presently conducted, and (ii) is the lessee or sublessee of
all of their respective leasehold estates and leasehold
interests. Each of the Company and its Subsidiaries enjoys
peaceful and undisturbed possession under all such leases in all
material respects.
(b) Since July 31, 2005, neither the Company nor any
of its Subsidiaries owns or has owned any real property.
(c) Section 3.15(c) of the Company Disclosure Schedule
sets forth any Contract pursuant to which the Company leases,
licenses or otherwise obtains the right to use any real property
(the Real Property Leases).
(d) The Company and its Subsidiaries enjoy in all material
respects peaceful and undisturbed possession of the real
property used by it under the Real Property Leases. Except as
set forth in Section 3.15(d) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries
subleases any such real property to any third parties.
Section 3.16 Insurance. The
Company and its Subsidiaries maintain, and have maintained
without interruption, policies or binders of insurance covering
risks and events and in amounts adequate for their respective
businesses and operations and customary in the industry in which
they operate. Except as set forth in Section 3.16 of the
Company Disclosure Schedule, such policies will not terminate as
a result of the consummation of the Transactions. The aggregate
annual premiums that the Company is paying with respect to the
Companys directors and officers insurance policy for the
current policy period that includes the date of this Agreement
is set forth in Section 3.16 of the Company Disclosure
Schedule.
Section 3.17 Unlawful
Payments. Since July 31, 2007, neither
the Company nor any of its Subsidiaries nor, to the Knowledge of
the Company, any Representative of the Company or any of its
Subsidiaries has, directly or indirectly: (a) used any
funds of the Company or any of its Subsidiaries for unlawful
contributions, unlawful gifts, unlawful entertainment or other
unlawful expenses relating to political activity; (b) made
any unlawful payment to foreign or domestic governmental
officials or employees or to foreign or domestic political
parties or campaigns from funds of the Company or any of its
Subsidiaries; (c) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or any similar Law;
(d) established or maintained any unlawful fund of monies
or other assets of the Company or any of its Subsidiaries;
(e) made any fraudulent entry on the books or records of
the Company or any of its Subsidiaries; or (f) made any
unlawful bribe, unlawful rebate, unlawful payoff, unlawful
influence payment, unlawful kickback or other unlawful payment
to any Person, private or public, regardless of form, whether in
money, property or services, to obtain
A-17
favorable treatment in securing business, to obtain special
concessions for the Company or any of its Subsidiaries, to pay
for favorable treatment for business secured or to pay for
special concessions already obtained for the Company or any of
its Subsidiaries.
Section 3.18 Opinion
of Financial Advisor. The board of directors
of the Company has received the opinion of Stephens Inc., dated
the date of this Agreement, to the effect that, as of such date,
and subject to the various assumptions and qualifications set
forth therein, the consideration to be received in the Merger by
holders of the Company Common Stock is fair from a financial
point of view to holders of such shares (the Fairness
Opinion). A correct and complete copy of the Fairness
Opinion has been delivered to Parent prior to or concurrently
with the execution and delivery of this Agreement. The Company
has been authorized by Stephens Inc. to permit the inclusion of
the Fairness Opinion and references thereto in the Proxy
Statement, subject to prior review and consent by Stephens Inc.
(such consent not to be unreasonably withheld or delayed).
Section 3.19 Brokers
and Other Advisors. Except for Stephens Inc.,
the fees and expenses of which will be paid by the Company, no
broker, investment banker, financial advisor or other Person is
entitled to any brokers, finders, financial
advisors or other similar fee or commission, or the
reimbursement of expenses, in connection with the Transactions
based upon arrangements made by or on behalf of the Company or
any of its Subsidiaries. The Company has prior to the date of
this Agreement provided Parent with a correct and complete copy
of any engagement letter or other Contract between the Company
and Stephens Inc. in connection with the Transactions. Other
than such engagement letter or other Contract with Stephens
Inc., each engagement letter or other Contract between the
Company or one of its Subsidiaries, on the one hand, and each of
its legal, accounting or other advisors, on the other hand, in
connection with the Transactions entitles the legal, accounting
or other advisor party thereto to receive compensation only at
its usual hourly rates, without any premium, bonus, or similar
payment, in connection with the transactions contemplated by
this Agreement.
Section 3.20 Takeover
Statutes. The board of directors of the
Company has taken all necessary action to ensure that the
restrictions on business combinations contained in
Section 203 of the DGCL will not apply to this Agreement,
the Merger or the other transactions expressly contemplated by
this Agreement, including by approving this Agreement, the
Merger and the other transactions contemplated by this
Agreement. To the Knowledge of the Company, no other so-called
fair price, moratorium, control
share acquisition or other state anti-takeover Laws apply
or purport to apply to this Agreement, the Merger or any of the
other transactions expressly contemplated by this Agreement.
Section 3.21 Independent
Contractors. The Company Contracts with
Independent Contractors and IC Entities comply and have
complied in all material respects with the Federal Leasing
Regulations under 49 CFR Part 376 and similar Laws of
Canada or other Governmental Authorities, in each case to the
extent applicable. Except for non-compliance which, individually
or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect, such Company
Contracts constitute bona fide agreements whereby such
Independent Contractors are independent contractors to the
Company or any of its Subsidiaries. Except as disclosed in
Section 3.21 of the Company Disclosure Schedule, there are
not any disputes, Actions, or charges pending or, to the
Knowledge of the Company, threatened at law or in equity before
any Governmental Authority that challenge the Companys
compliance under any Law governing the classification of
independent contractors, or the work status of the independent
contractors.
Section 3.22 Confidentiality
Agreements. Neither the Company nor any of
its Subsidiaries is party to any confidentiality agreement that
prohibits the Company from providing information to Parent in
accordance with Section 5.3.
Section 3.23 Prior
Merger Agreement. The Company has provided
Parent with a true and complete copy of the Prior Merger
Agreement, including all schedules and exhibits thereto. The
Company has validly terminated the Prior Merger Agreement
pursuant to Section 7.1(d)(ii) thereof prior to entering
into this Agreement, and prior to such termination was not in
breach of, had not previously breached and has not received any
notice of any allegation of breach of the Prior Merger Agreement.
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Section 3.24 No
Other Representations or Warranties. Except
for the representations and warranties made by the Company in
this Article III, neither the Company nor any other
Person makes any representation or warranty with respect to the
Company or its Subsidiaries or their respective business,
operations, assets, liabilities, condition (financial or
otherwise) or prospects, notwithstanding the delivery or
disclosure to Parent or any of its Affiliates or Representatives
of any documentation, projections, forecasts, estimates,
budgets, prospect information or other information with respect
to any one or more of the foregoing.
ARTICLE IV
Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub jointly and severally represent and
warrant to the Company:
Section 4.1 Organization;
Standing. Parent is a corporation
incorporated, validly existing and in good standing under the
Laws of Canada, and Merger Sub is a corporation duly organized,
validly existing and in good standing under the Laws of the
State of Delaware.
Section 4.2 Authority;
Noncontravention.
(a) Each of Parent and Merger Sub has all necessary
corporate power and authority to execute and deliver this
Agreement, to perform their respective obligations hereunder and
to consummate the Transactions. The execution, delivery and
performance by Parent and Merger Sub of this Agreement, and the
consummation by Parent and Merger Sub of the Transactions, have
been duly authorized and approved by their respective boards of
directors, and no other corporate action on the part of Parent
and Merger Sub is necessary to authorize the execution, delivery
and performance by Parent and Merger Sub of this Agreement and
the consummation by them of the Transactions. This Agreement has
been duly executed and delivered by Parent and Merger Sub and,
assuming due authorization, execution and delivery hereof by the
Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub, enforceable against each of them
in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(b) Neither the execution and delivery of this Agreement by
Parent and Merger Sub, nor the consummation by Parent or Merger
Sub of the Transactions, nor performance or compliance by Parent
or Merger Sub with any of the terms or provisions hereof, will
(with or without the giving of notice, the lapse of time, or
both) (i) conflict with or violate any provision of the
certificate of incorporation or by-laws of Parent or Merger Sub
or (ii) assuming that the authorizations, consents and
approvals referred to in Section 4.3 are obtained
and the filings referred to in Section 4.3 are made,
(x) conflict with or violate any Law, judgment, writ or
injunction of any Governmental Authority applicable to Parent or
any of its Subsidiaries or to which any of their assets are
subject, or (y) violate or constitute a default under or
result in or permit the modification, revocation, cancellation,
termination or acceleration of rights under, any of the terms,
conditions or provisions of any Contract to which Parent, Merger
Sub or any of their respective Subsidiaries is a party or by
which any of their assets are bound, except, in the case of
clause (ii)(y), for such violations or defaults as, individually
or in the aggregate, would not reasonably be expected to impair
in any material respect the ability of Parent or Merger Sub to
perform its obligations hereunder or prevent or materially delay
consummation of the Transactions.
Section 4.3 Governmental
Approvals. Except for (a) any filings
required under, and in compliance with other applicable
requirements of, the Exchange Act, applicable Canadian
securities laws and the rules of the Nasdaq Stock Market LLC,
(b) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware pursuant to the DGCL
and (c) any filings required under, and in compliance with
other applicable requirements of, the HSR Act and Foreign
Antitrust Laws, no consents or approvals of, or filings,
licenses, permits or authorizations, declarations or
registrations with, any Governmental Authority are necessary for
the execution, delivery and performance of this Agreement by
Parent and Merger Sub or the consummation by Parent and Merger
Sub of the Transactions, other than such other consents,
approvals, filings, licenses, permits or authorizations,
declarations or registrations that, if not obtained, made or
given, individually or in the aggregate, would not reasonably be
expected to impair in any material respect the ability
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of Parent or Merger Sub to perform its obligations hereunder or
prevent or materially delay consummation of the Transactions.
Section 4.4 Information
Supplied. The information supplied by Parent
expressly for inclusion (or incorporation by reference) in the
Proxy Statement will not, on the date it is first mailed to
stockholders of the Company and at the time of the Company
Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
Section 4.5 Ownership
and Operations of Merger Sub. Parent
indirectly owns beneficially and of record all of the
outstanding capital stock of Merger Sub. Merger Sub was formed
solely for the purpose of engaging in the Transactions, has
engaged in no other business.
Section 4.6 Financing. Parent
has sufficient cash, cash equivalents and committed availability
under its existing credit facilities that, taken together, are
sufficient to enable it to consummate the Transactions upon the
terms and conditions contemplated by this Agreement.
Section 4.7 Solvency. Neither
Parent nor Merger Sub is entering into the Transactions with the
intent to hinder, delay or defraud either present or future
creditors. To the knowledge of Parent, based on information
available to Parent as of the date of this Agreement,
immediately after giving effect to all of the Transactions and
the payment of the aggregate Merger Consideration assuming
(a) satisfaction of the conditions to Parents
obligation to consummate the Merger as set forth herein,
(b) the accuracy of the representations and warranties of
the Company set forth in Section 3.5(b) and
Section 3.5(f) (without, in the case of such
Section 3.5(f), giving effect to any qualifications
as to Company Material Adverse Effect),
(c) satisfaction of the conditions to Parents
obligation to consummate the Merger as set forth herein,
(d) the financial and other information relating to the
Company and its Subsidiaries provided to Parent and Merger Sub
pursuant to Section 5.5(b) fairly presents the
consolidated financial condition of the Company and its
Subsidiaries as at the end of the periods covered thereby and
the consolidated results of operations of the Company and its
Subsidiaries for the periods covered thereby and (e) any
estimates, projections or forecasts of the Company and its
Subsidiaries have been prepared in good faith based upon
assumptions that were and continue to be reasonable, the
Surviving Corporation (i) as of such date will be able to
pay its debts as they become due and shall own property having a
fair saleable value greater than the amounts required to pay its
debts (including a reasonable estimate of the amount of all
contingent liabilities) as they become absolute and mature; and
(ii) shall not have, as of such date, unreasonably small
capital to carry on its business.
Section 4.8 [Intentionally
Left Blank].
Section 4.9 Certain
Arrangements. There are no Contracts between
Parent, Merger Sub or any of their respective Affiliates as of
the date of this Agreement, on the one hand, and any member of
the Companys management or directors, on the other hand,
as of the date of this Agreement that relate in any way to the
Company or the Transactions.
Section 4.10 Legal
Proceedings. There is no pending or, to the
knowledge of Parent, threatened, Action against Parent or Merger
Sub, nor is there any injunction, order, judgment, ruling or
decree imposed (or, to the knowledge of Parent, threatened to be
imposed) upon Parent or Merger Sub, in each case, by or before
any Governmental Authority, that would reasonably be expected to
prevent, materially delay or materially impede the ability of
Parent and Merger Sub to consummate the Transactions.
Section 4.11 Brokers
and Other Advisors. No broker, investment
banker, financial advisor or other Person is entitled to any
brokers, finders, financial advisors or other
similar fee or commission in connection with the Transactions
based upon arrangements made by or on behalf of Parent or any of
its Subsidiaries except for Persons whose fees and expenses will
be paid by Parent or its Affiliates as of the date of this
Agreement.
Section 4.12 No
Other Representations or Warranties. Except
for the representations and warranties made by Parent and Merger
Sub in this Article IV, neither Parent nor Merger
Sub nor any other Person makes any representation or warranty
with respect to Parent or Merger Sub or their respective
business, operations,
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assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to the
Company or any of its Affiliates or Representatives of any
documentation, projections, forecasts, estimates, budgets,
prospect information or other information with respect to any
one or more of the foregoing.
ARTICLE V
Additional Covenants and Agreements
Section 5.1 Preparation
of the Proxy Statement; Stockholders Meeting.
(a) As soon as practicable following the date of this
Agreement (but in any event within ten (10) business days
after the date of this Agreement), (i) the Company shall
prepare the Proxy Statement, (ii) Parent shall promptly
provide to the Company any information required for inclusion in
the Proxy Statement and shall promptly provide such other
information or assistance in the preparation thereof as may be
reasonably requested by the Company and (iii) the Company
shall file the Proxy Statement with the SEC. The Company shall
thereafter (A) respond to any comments on the Proxy
Statement or requests for additional information from the SEC as
soon as practicable after receipt of any such comments or
requests and (B) cause the Proxy Statement to be mailed to
the stockholders of the Company as promptly as practicable after
the Proxy Statement is cleared by the SEC. The Company shall
promptly (but in any event within twenty-four (24) hours)
notify Parent upon the receipt of any such comments or requests
or any request from the SEC or its staff for amendments or
supplements to the Proxy Statement and shall provide Parent with
copies of all correspondence between the Company and its
representatives, on the one hand, and the SEC and its staff, on
the other hand. In the event that the Company receives any
comments from the SEC or its staff or any request from the SEC
or its staff for amendments or supplements to the Proxy
Statement, Parent shall promptly provide to the Company, upon
receipt of notice from the Company, any information required for
inclusion in the response of the Company to such comments or
such request and shall promptly provide such other information
or assistance in the preparation thereof as may be reasonably
requested by the Company. Notwithstanding the foregoing, prior
to filing or mailing the Proxy Statement (or any amendment or
supplement thereto) or responding to any comments of the SEC
with respect thereto, the Company shall (x) provide Parent
with a reasonable opportunity to review and comment on any
drafts of the Proxy Statement and related correspondence and
filings and (y) reasonably consider all comments proposed
by Parent for inclusion in such drafts, correspondence and
filings. If at any time prior to the Effective Time any fact or
information relating to the Company shall be discovered by the
Company which should be set forth in an amendment of or a
supplement to the Proxy Statement, so that the Proxy Statement
would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, the Company shall, in accordance with the
procedures set forth in this Section 5.1(a), prepare
and file with the SEC such amendment or supplement as soon
thereafter as is reasonably practicable and to the extent
required by applicable Law, cause such amendment or supplement
to be distributed to the stockholders of the Company.
(b) The Company shall, as soon as practicable following the
date that the Proxy Statement is cleared by the SEC, establish a
record date for, duly call, give notice of, convene and hold a
meeting of its stockholders (the Company Stockholders
Meeting) for the purpose of obtaining the Company
Stockholder Approval. The Company shall, through its board of
directors, recommend to its stockholders adoption of this
Agreement. The Proxy Statement shall, in addition to such
recommendation, include disclosure of the unanimous:
(x) determination by the Companys board of directors
that it is advisable and in the best interests of the Company
and its stockholders to enter into this Agreement,
(y) approval by the Companys board of directors of
the execution, delivery and performance by the Company of this
Agreement and the consummation of the Transactions, including
the Merger, and (z) resolution by the Companys board
of directors to recommend adoption of this Agreement by the
stockholders of the Company. Notwithstanding the foregoing,
(i) the Company shall have no obligation to do any of the
foregoing if there shall have been a Company Adverse
Recommendation Change and (ii) the Company may adjourn or
postpone the Company Stockholders Meeting to the extent
necessary to ensure that any required supplement or amendment to
the Proxy Statement is provided to the Companys
stockholders or, if as of the time for which the Company
Stockholders Meeting is
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originally scheduled (as set forth in the Proxy Statement) there
are insufficient shares of Company Common Stock represented
(either in person or by proxy) to constitute a quorum necessary
to conduct business at such meeting; provided that no
adjournment may be to a date on or after five (5) business
days prior to the
Walk-Away
Date.
Section 5.2 Conduct
of Business. Except as contemplated or
permitted by this Agreement or as required by applicable Law or
as contemplated by Section 5.2 of the Company Disclosure
Schedule, during the period from the date of this Agreement
until the Effective Time, unless Parent otherwise consents
(which consent shall not, in the case of clauses (d),
(g) or (m), be unreasonably withheld or delayed), the
Company shall, and shall cause each of its Subsidiaries to,
(x) conduct its business in all material respects in the
ordinary course of business consistent with past practice,
(y) comply in all material respects with all applicable
Laws and the requirements of all Company Material Contracts, and
(z) use commercially reasonable efforts to maintain and
preserve intact its business organization and the goodwill of
those having business relationships with it and retain the
services of its present officers and key employees, in each
case, to the end that its goodwill and ongoing business shall be
unimpaired at the Effective Time. Without limiting the
generality of the foregoing, except as contemplated by
Section 5.2 of the Company Disclosure Schedule, during the
period from the date of this Agreement until the Effective Time,
the Company shall not, and shall not permit any of its
Subsidiaries to:
(a) (i) issue, sell or grant any shares of its capital
stock, or any securities or rights convertible into,
exchangeable or exercisable for, or evidencing the right to
subscribe for any shares of its capital stock, or any rights,
warrants or options to purchase any shares of its capital stock,
or any securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for, any
shares of its capital stock, provided that the Company
may issue shares of Company Common Stock upon the exercise of
options that are outstanding on the date of this Agreement;
(ii) redeem, purchase or otherwise acquire any of its
outstanding shares of capital stock, or any rights, warrants or
options to acquire any shares of its capital stock, except
(x) pursuant to commitments in effect as of the date of
this Agreement and disclosed in Section 3.2(a) of the
Company Disclosure Schedule or (y) in connection with
withholding to satisfy tax obligations with respect to options,
acquisitions in connection with the forfeiture of equity awards,
or acquisitions in connection with the net exercise of options;
(iii) declare, set aside for payment or pay any dividend
on, or make any other distribution in respect of, any shares of
its capital stock or otherwise make any payments to its
stockholders in their capacity as such (other than dividends by
a direct or indirect wholly-owned Subsidiary of the Company to
its parent); or (iv) split, combine, subdivide or
reclassify any shares of its capital stock;
(b) incur or assume any Indebtedness, other than amounts
drawn against the Revolver;
(c) sell, transfer, lease, mortgage, encumber or otherwise
dispose of any of their respective properties or assets that are
individually or in the aggregate material to the Company and its
Subsidiaries taken as a whole, except (i) sales, leases,
rentals and licenses in the ordinary course of business
consistent with past practice, (ii) pursuant to Contracts
in force on the date of this Agreement and disclosed in
Section 3.14(a) of the Company Disclosure Schedule,
(iii) dispositions of obsolete or worthless assets or
(iv) transfers among the Company and its Subsidiaries;
(d) make capital expenditures except as budgeted in the
Companys current capital expenditure plan that was made
available to Parent prior to the date of this Agreement;
(e) make any acquisition (including by merger) of the
capital stock or the assets of any other Person for
consideration in excess of $2,000,000 for all such acquisitions;
(f) make any investment (by contribution to capital,
property transfers, purchase of securities or otherwise) in, or
loan or advance (other than travel and similar advances to its
employees in the ordinary course of business consistent with
past practice and extension of credit to customers) to, any
Person other than a direct or indirect wholly owned Subsidiary
of the Company in the ordinary course of business consistent
with past practice;
(g) (i) terminate or amend (x) any Company Material
Contract or (y) any other Contract that is material to the
Company and its Subsidiaries taken as a whole or (ii) enter
into any Contract that would be a Company
A-22
Material Contract if the Company or any of its Subsidiaries had
entered into it on or prior to the date of this Agreement or
that would be breached by, or require the consent of any third
party in order to continue in full force following, consummation
of the Transactions, other than in the ordinary course of
business consistent with past practice;
(h) increase the compensation of any of its current or
former directors, officers or employees or enter into,
establish, amend or terminate any employment, consulting,
retention, change in control, collective bargaining, bonus or
other incentive compensation, profit sharing, health or other
welfare, stock option or other equity (or equity-based),
pension, retirement, vacation, severance, deferred compensation
or other compensation or benefit plan, policy, agreement, trust,
fund or arrangement with, for or in respect of, any current or
former stockholder, director, officer, other employee or
Affiliate, other than (A) as required pursuant to
applicable Law or the terms of Contracts in effect on the date
of this Agreement and (B) increases in salaries, wages and
benefits of employees made in the ordinary course of business
consistent with past practice and in amounts and in a manner
consistent with past practice but in no event, for individuals
whose annual rate of compensation exceeds $100,000, by more than
five percent (5%) of the base rate of compensation of any such
employee; provided, however, that (1) the
salary or wages of officers shall not be increased and
(2) the individual benefits of officers shall not be
increased except pursuant to changes applicable generally under
a Company Benefit Plan;
(i) except as required by applicable Law, make or change
any material election concerning Taxes or Tax Returns, file any
amended Tax Return, enter into any closing agreement with
respect to Taxes, settle any material Tax claim or assessment or
surrender any right to claim a material refund of Taxes or
obtain any Tax ruling;
(j) make any changes in financial accounting methods,
principles or practices (or change an annual accounting period),
except insofar as may be required by a change in GAAP or
applicable Law;
(k) amend the Company Charter Documents or the Subsidiary
Documents;
(l) adopt a plan or agreement of complete or partial
liquidation dissolution, restructuring, recapitalization,
merger, consolidation or other reorganization (other than
transactions exclusively between wholly owned Subsidiaries of
the Company);
(m) pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction in accordance with their
terms (or less than as required under their terms) of
liabilities, claims or obligations reflected or reserved against
in the most recent consolidated financial statements (or the
notes thereto) of the Company included in the Filed Company SEC
Documents or incurred since the date of such financial
statements in the ordinary course of business consistent with
past practice or for such payments, discharges, settlements and
satisfactions that do not require the payment by the Company or
any of its Subsidiaries of $100,000 for any such payment,
discharge, settlement or satisfaction or $500,000 for all such
payments, discharges, settlements and satisfactions;
(n) issue any broadly distributed communication of a
general nature to employees (including general communications
relating to benefits and compensation) or customers without the
prior approval of Parent, except for communications in the
ordinary course of business consistent with past practice that
do not relate to the Transactions;
(o) settle or compromise any Action or investigation (this
covenant being in addition to the Companys agreement set
forth in Section 5.10 hereof), except for any such
settlement or compromise that does not requirement the payment
by the Company and its Subsidiaries of an amount in excess of
$100,000 or $500,000 for all such settlements and compromises;
(p) amend the terms of any Contract with an Independent
Contractor to increase the amounts payable thereunder, other
than in the ordinary course of business consistent with past
practice; or
(q) agree, in writing or otherwise, to take any of the
foregoing actions.
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Section 5.3 No
Solicitation; Change in Recommendation.
(a) For the purposes of this Agreement, Acceptable
Confidentiality Agreement means any confidentiality
and standstill agreement that contains provisions that are no
less favorable to the Company than those contained in the
Confidentiality Agreement.
(b) On the date of this Agreement, the Company shall and
shall cause each of its Subsidiaries and their respective
officers, directors, employees, consultants, agents, advisors,
Affiliates and other representatives (collectively, the
Representatives) to (i) immediately
cease any solicitation, encouragement, discussions or
negotiations with any Persons that may be ongoing with respect
to a Takeover Proposal and with any Persons who have made or
indicated an intention to make a Takeover Proposal, and
(ii) request each such Person to promptly return or destroy
all confidential information concerning the Company and its
Subsidiaries. Except as permitted by this
Section 5.3, the Company shall not, and shall cause
each of its Subsidiaries and Representatives not to, from the
date as of this Agreement until the Effective Time or, if
earlier, the termination of this Agreement in accordance with
Article VII, directly or indirectly,
(A) solicit, initiate or knowingly facilitate or encourage
(including by way of furnishing non-public information) any
inquiries regarding, or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, a
Takeover Proposal, (B) engage in, continue or otherwise
participate in any discussions or negotiations regarding, or
furnish to any other party information in connection with or for
the purpose of encouraging or facilitating, a Takeover Proposal,
(C) approve, endorse or recommend any Takeover Proposal,
(D) enter into any letter of intent, agreement or agreement
in principle or other Contract with respect to a Takeover
Proposal, or (E) propose to do any of the foregoing.
(c) Notwithstanding anything to the contrary contained
herein, if at any time on or after the date of this Agreement
and prior to obtaining the Company Stockholder Approval, the
Company or any of its Representatives receives a bona fide
written unsolicited Takeover Proposal from any Person, which
Takeover Proposal was made or renewed on or after the date of
this Agreement and that did not result from any breach of this
Section 5.3, if the board of directors of the
Company determines in good faith, after consultation with
nationally-recognized independent financial advisors and
nationally-recognized outside legal counsel, that
(i) failure to take such action would violate the
directors fiduciary duties to the Companys
stockholders under applicable Law and (ii) such Takeover
Proposal constitutes or is reasonably likely to result in a
Superior Proposal, then the Company and its Representatives may
(x) furnish, pursuant to an Acceptable Confidentiality
Agreement, information (including non-public information) with
respect to the Company and its Subsidiaries to the Person or
group of Persons who has made such Takeover Proposal;
provided that the Company shall promptly (and in any
event within twenty-four (24) hours) provide to Parent any
material non-public information provided orally and any
non-public information provided in writing, in each case,
concerning the Company or its Subsidiaries that is provided to
any Person given such access which was not previously provided
to Parent or its Representatives; and (y) engage in or
otherwise participate in discussions or negotiations with the
Person or group of Persons making such Takeover Proposal;
provided, further that the Company shall promptly
provide to Parent (and in any event within twenty-four
(24) hours) the identity of the Person making the Takeover
Proposal. From and after the date of this Agreement, the Company
shall not grant any waiver, amendment or release under any
standstill agreement without the prior written consent of Parent.
(d) Following the date of this Agreement, the Company shall
keep Parent reasonably informed of any material developments,
discussions or negotiations regarding any Takeover Proposal on a
current basis (and in any event within twenty-four
(24) hours) and shall, from and after the date of this
Agreement, promptly (and in any event within twenty-four
(24) hours) provide to Parent (i) a written summary of
the terms of any such Takeover Proposal not made in writing
(other than terms that are, individually and in the aggregate,
inconsequential) and (ii) copies of any written materials
provided by any Person(s) making a Takeover Proposal (including
a copy of any Takeover Proposal made in writing). The Company
agrees that it and its Subsidiaries will not enter into any
confidentiality agreement with any Person subsequent to the date
of this Agreement which prohibits the Company from providing any
information to Parent in accordance with this
Section 5.3.
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(e) Except as expressly permitted by this
Section 5.3(e), the board of directors of the
Company shall not (i)(A) fail to make the Company Board
Recommendation or fail to include the Company Board
Recommendation in the Proxy Statement, (B) change, qualify,
withhold, withdraw or modify, or publicly propose to change,
qualify, withhold, withdraw or modify, in a manner adverse to
Parent, the Company Board Recommendation, (C) take any
formal action or make any recommendation or public statement in
connection with a tender offer or exchange offer other than a
recommendation against such offer or a temporary stop,
look and listen communication by the board of directors of
the Company pursuant to
Rule 14d-9(f)
of the Exchange Act, or (D) adopt, approve or recommend, or
publicly propose to approve or recommend to the stockholders of
the Company a Takeover Proposal (actions described in this
clause (i) being referred to as a Company Adverse
Recommendation Change), (ii) subject to the
compliance by the Company with Section 7.1(d)(ii),
authorize, cause or permit the Company or any of its
Subsidiaries to enter into any letter of intent, agreement or
agreement in principle or other Contract with respect to any
Takeover Proposal (other than an Acceptable Confidentiality
Agreement) (each, a Company Acquisition
Agreement) or (iii) take any action pursuant to
Section 7.1(d)(ii). Notwithstanding anything to the
contrary herein, prior to the time the Company Stockholder
Approval is obtained, but not after, the board of directors of
the Company may make a Company Adverse Recommendation Change or
enter into a Company Acquisition Agreement with respect to a
Takeover Proposal, if and only if, prior to taking such action,
the board of directors of the Company has determined in good
faith, after consultation with nationally-recognized independent
financial advisors and nationally-recognized outside legal
counsel, (i) that failure to take such action would violate
the directors fiduciary duties to the Companys
stockholders under applicable Law and (ii) that such
Takeover Proposal constitutes a Superior Proposal;
provided, however, that (w) the Company has
given Parent at least four (4) business days prior
written notice of its intention to take such action (which
notice shall specify the material terms and conditions of any
such Superior Proposal (including the identity of the party
making such Superior Proposal) and has contemporaneously
provided a copy of the relevant proposed transaction agreements
with the party making such Proposal), (x) the Company has
negotiated, and has caused its Representatives to negotiate, in
good faith with Parent during such notice period to the extent
Parent wishes to negotiate, to enable Parent to revise the terms
of this Agreement, such that it would cause such Superior
Proposal to no longer constitute a Superior Proposal,
(y) following the end of such notice period, the board of
directors of the Company shall have considered in good faith any
changes to this Agreement, proposed in writing by Parent, and
shall have determined that the Superior Proposal would continue
to constitute a Superior Proposal if such revisions were to be
given effect, and (z) in the event of any change to the
terms of such Superior Proposal (other than changes that are,
individually and in the aggregate, inconsequential), the Company
shall, in each case, have delivered to Parent an additional
notice and the four (4) business day notice period shall
have recommenced unless the event requiring notice pursuant to
clause (z) of this Section 5.3(e) occurred less
than four (4) business days prior to the Company
Stockholders Meeting, in which case the Company shall deliver
notice to Parent of such event as promptly as practicable; and
provided, further, that the Company has complied
in all material respects with its obligations under this
Section 5.3 and provided, further,
that notwithstanding anything in this Agreement to the contrary,
any purported termination of this Agreement pursuant to this
sentence shall be void and of no force and effect, unless the
Company termination is in accordance with
Section 7.1 and the Company pays Parent the
Termination Fee in accordance with Section 7.3 prior
to or concurrently with such termination.
(f) Except to the extent provided in
Section 5.3(e), nothing in this
Section 5.3 shall prohibit the board of directors of
the Company from taking and disclosing to the stockholders of
the Company a position contemplated by
Rule 14e-2(a),
Rule 14d-9
or Item 1012(a) of
Regulation M-A
promulgated under the Exchange Act, if failure to do so would
violate applicable Law.
(g) For purposes of this Agreement:
Takeover Proposal means any inquiry, proposal
or offer from any Person (other than Parent and its Subsidiaries
but including, for the avoidance of doubt, DashNow Parent,
Greenbriar Equity Group LLC and their respective Affiliates) or
group, within the meaning of Section 13(d) of
the Exchange Act, relating to, in a single transaction or series
of related transactions, any (i) acquisition of assets of
the Company and its Subsidiaries equal to more than 20% of the
Companys consolidated assets or to which more than 20% of
the
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Companys revenues or earnings on a consolidated basis are
attributable, (ii) acquisition of more than 20% of the
outstanding Company Common Stock, (iii) tender offer or
exchange offer that if consummated would result in any Person
beneficially owning more than 20% of the outstanding Company
Common Stock, (iv) merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or (v) any
combination of the foregoing types of transactions if the sum of
the percentage of consolidated assets, consolidated revenues or
earnings and Company Common Stock involved is more than 20%; in
each case, other than the Transactions.
Superior Proposal means any bona fide
written Takeover Proposal (i) that includes
consideration per share of Company Common Stock that is greater
than the per share Merger Consideration and that the board of
directors of the Company has determined in its good faith
judgment (after consultation with nationally-recognized
independent financial advisors and nationally-recognized outside
legal counsel) is reasonably likely to be consummated in
accordance with its terms without unreasonable delay, taking
into account all legal, regulatory and financial aspects of the
proposal (including certainty of financing) and the Person
making the proposal, and if consummated, would result in a
transaction more favorable to the Companys stockholders
from a financial point of view than the Merger (including any
changes to the terms of this Agreement proposed by Parent in
response to such proposal or otherwise) and
(ii) accompanied by executed customary financing
commitments from recognized financing sources not subject to any
due diligence conditions and that, together with available cash
on hand, are sufficient to fund the cash portion of such
Takeover Proposal; provided that for purposes of the
definition of Superior Proposal, the references to
20% in the definition of Takeover Proposal shall be
deemed to be references to 50%.
Section 5.4 Commercially
Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement,
each of the parties hereto shall cooperate with the other
parties and use (and shall cause their respective Subsidiaries
to use) their respective commercially reasonable efforts to
promptly (i) take, or cause to be taken, all actions, and
do, or cause to be done, all things, necessary, proper or
advisable to cause the conditions to Closing to be satisfied as
promptly as practicable and to consummate and make effective, in
the most expeditious manner practicable, the Transactions,
including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of
information, applications and other documents (including any
required or recommended filings under applicable Antitrust
Laws), and (ii) obtain all approvals, consents, expirations
of waiting periods, registrations, permits, authorizations and
other confirmations from any Governmental Authority or third
party necessary, proper or advisable to consummate the
Transactions. For purposes hereof, Antitrust
Laws means the Sherman Act, as amended, the Clayton
Act, as amended, the HSR Act, the Federal Trade Commission Act,
as amended, all applicable Foreign Antitrust Laws and all other
applicable Laws issued by a Governmental Authority that are
designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.
(b) In furtherance and not in limitation of the foregoing,
(i) each party hereto agrees to make an appropriate filing
of a Notification and Report Form pursuant to the HSR Act and
all applicable Foreign Antitrust Laws with respect to the
Transactions as promptly as practicable and in any event within
five (5) business days of the date of this Agreement and
use their respective commercially reasonable efforts to supply
as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR
Act or such applicable Foreign Antitrust Laws necessary to cause
the expiration or termination of the applicable waiting periods
under the HSR Act and the applicable Foreign Antitrust Laws
(including any extensions thereof) as soon as practicable and
(ii) the Company and Parent shall each use its commercially
reasonable efforts to (x) take all action necessary to
ensure that no state takeover statute or similar Law is or
becomes applicable to any of the Transactions and (y) if
any state takeover statute or similar Law becomes applicable to
any of the Transactions, use their commercially reasonable
efforts to ensure that the Transactions may be consummated as
promptly as practicable on the terms contemplated by this
Agreement and otherwise minimize the effect of such Law on the
Transactions. Each party shall request early termination of the
HSR Act waiting period. Notwithstanding anything to the contrary
provided in this Section 5.4, Parent and its Affiliates
hereby agree to sell or otherwise dispose of, hold separate
(through the
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establishment of a trust or otherwise), or divest itself of all
or any portion of the business or assets of the Company or its
Subsidiaries to eliminate any impediment that may be asserted
under any Law governing competition, monopolies or restrictive
trade practices.
(c) Each of the parties hereto shall use its commercially
reasonable efforts to (i) cooperate in all respects with
each other in connection with any filing or submission with a
Governmental Authority in connection with the Transactions and
in connection with any investigation or other inquiry by or
before a Governmental Authority relating to the Transactions,
including any Action initiated by a private party, and to
contest and resist any Action by or before a Governmental
Authority (including any Action contemplated in
Section 5.10) and to have vacated, lifted, reversed
or overturned any decree, judgment, injunction or other order,
whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts consummation of the
Transactions, and (ii) keep the other party informed in all
material respects and on a reasonably timely basis of any
material communication received by such party from, or given by
such party to, the Federal Trade Commission, the Antitrust
Division of the Department of Justice, the Canadian Competition
Bureau or any other Governmental Authority and of any material
communication received or given in connection with any Action by
a private party, in each case regarding any of the Transactions.
Subject to applicable Laws relating to the exchange of
information, each of the parties hereto shall have the right to
review in advance, and to the extent practicable each will
consult the other on, all the information relating to the other
parties and their respective Subsidiaries, as the case may be,
that appears in any filing made with, or written materials
submitted to, any third party
and/or any
Governmental Authority in connection with the Transactions.
Parent shall pay all fees associated with the filings made by
Parent, Merger Sub and the Company in accordance with this
Section 5.4.
Section 5.5 Financing. The
Company shall use commercially reasonable efforts to obtain such
consents, approvals, authorizations and instruments which may be
reasonably requested by Parent or Merger Sub in connection with
the termination of the Revolver at the Effective Time, including
customary payoff letters, lien releases and instruments of
termination or discharge.
Section 5.6 Public
Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint
press release to be reasonably agreed upon by Parent and the
Company. Thereafter, neither the Company nor Parent shall issue
or cause the publication of any press release or other public
announcement (to the extent not previously issued or made in
accordance with this Agreement) with respect to the Merger, this
Agreement or the other Transactions without the prior consent of
the other party (which consent shall not be unreasonably
withheld or delayed), except as may be required by Law or by any
applicable listing agreement with the Nasdaq Stock Market LLC or
the Toronto Stock Exchange as determined in the good faith
judgment of the party proposing to make such release (in which
case such party shall not issue or cause the publication of such
press release or other public announcement without prior
consultation with the other party).
Section 5.7 Access
to Information; Confidentiality. The Company
shall, and shall cause each of its Subsidiaries to, afford to
Parent and Parents Representatives reasonable access
during normal business hours to the Companys and its
Subsidiaries properties, books, Contracts, commitments,
records and correspondence (in each case, whether in physical or
electronic form), officers, employees, accountants, counsel,
financial advisors and other Representatives and the Company
shall furnish promptly to Parent (i) a copy of each report,
schedule and other document filed by it pursuant to the
requirements of Federal or state securities Laws and a copy of
any communication (including comment letters)
received by the Company from the SEC concerning compliance with
securities Laws and (ii) such other information concerning
its and its Subsidiaries business, properties and
personnel as Parent may reasonably request (provided that Parent
and its representatives shall conduct any such activities in
such a manner as not to interfere unreasonably with the business
or operations of the Company). Notwithstanding the foregoing,
neither the Company nor its Subsidiaries shall be obligated to
provide any such access or information to the extent that it
would (x) require disclosure by the Company or such
Subsidiary of information subject to attorney-client privilege,
(y) conflict with confidentiality obligations to which the
Company or such Subsidiary is bound, or (z) violate any
applicable Laws (including Antitrust Laws); provided that the
foregoing shall not limit the obligation of the Company under
Section 5.3(c) to promptly (and in any event within
twenty-four (24) hours) provide to Parent any material
non-public
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information provided orally and any non-public information
providing in writing, in each case concerning the Company or its
Subsidiaries that is provided to any Person under
Section 5.3 which was not previously provided to
Parent or its Representatives. Except for disclosures permitted
by the terms of the Confidentiality Agreement, dated as of
October 7, 2010, between the Company and Parent (as it may
be amended from time to time, the Confidentiality
Agreement), Parent and its representatives shall hold
information received from the Company pursuant to this
Section 5.7 in confidence in accordance with the
terms of the Confidentiality Agreement.
Section 5.8 Notification
of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to
the Company, of (a) any notice or other communication
received by such party from any Governmental Authority in
connection with the Transactions or from any Person alleging
that the consent of such Person is or may be required in
connection with the Transactions, if the subject matter of such
communication or the failure of such party to obtain such
consent could be material to the Company, the Surviving
Corporation or Parent, (b) any Actions commenced or, to
such partys knowledge, threatened against, relating to or
involving or otherwise affecting such party or any of its
Subsidiaries which relate to the Transactions, (c) the
discovery of any fact or circumstance that, the occurrence or
non-occurrence of which, would cause any representation or
warranty made by such party contained in this Agreement
(i) that is qualified as to materiality or Company Material
Adverse Effect or material adverse effect or a
similar qualifier, as the case may be, to be untrue and
(ii) that is no so qualified to be untrue in any material
respect and (d) any material failure of such party to
comply with or satisfy any covenant or agreement to be complied
with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this
Section 5.8 shall not (x) cure any in accuracy
or breach of any representation, warranty, covenant or agreement
contained herein or (y) limit the remedies available to the
party receiving such notice.
Section 5.9 Indemnification
and Insurance.
(a) From and after the Effective Time, Parent shall, and
shall cause the Company and the Surviving Corporation to,
(i) until the sixth (6th) anniversary of the date on which
the Effective Time shall occur or, if longer, until all claims
for indemnification in respect of any claims made prior to the
end of such six (6) year period shall have been finally
resolved, indemnify and hold harmless each individual who at the
Effective Time is, or at any time prior to the Effective Time
was, a director or officer of the Company or of a Subsidiary of
the Company (each, an Indemnitee and,
collectively, the Indemnitees) with respect
to all claims, liabilities, losses, damages, judgments, fines,
penalties, costs (including amounts paid in settlement or
compromise) and reasonable expenses (including reasonable fees
and expenses of legal counsel) in connection with any Action
(whether civil, criminal, administrative or investigative),
whenever asserted, based on or arising out of, in whole or in
part, (A) the fact that an Indemnitee was a director or
officer of the Company or such Subsidiary or (B) acts or
omissions by an Indemnitee in the Indemnitees capacity as
a director, officer, employee or agent of the Company or such
Subsidiary or taken at the request of the Company or such
Subsidiary (including in connection with serving at the request
of the Company or such Subsidiary as a director, officer,
employee, agent, trustee or fiduciary of another Person
(including any employee benefit plan)), in each case under
(A) or (B), at, or at any time prior to, the Effective Time
(including any Action relating in whole or in part to the
Transactions), to the fullest extent permitted under applicable
Law, and (ii) assume all obligations of the Company and
such Subsidiaries to the Indemnitees in respect of
indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time as
provided in (x) the Company Charter Documents and the
organizational documents of such Subsidiaries as currently in
effect and (y) the indemnification agreements listed on
Section 5.9 of the Company Disclosure Schedule, which shall
survive the Transactions and continue in full force and effect
in accordance with their respective terms for a period of at
least six (6) years. Without limiting the foregoing, Parent
shall, from and after the Effective Time and until the sixth
(6th) anniversary of the date on which the Effective Time shall
occur or, if longer, until all claims for indemnification in
respect of any claims made prior to the end of such six
(6) year period shall have been finally resolved, cause the
certificate of incorporation and by-laws of the Surviving
Corporation to contain provisions no less favorable to the
Indemnitees with respect to limitation of liabilities of
directors and officers and indemnification than are set forth as
of the date of this Agreement in the Company Charter Documents,
which provisions shall not be amended, repealed or otherwise
modified in a
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manner that would adversely affect the rights thereunder of the
Indemnitees. In addition, from and after the Effective Time and
until the sixth (6th) anniversary of the date on which the
Effective Time shall occur or, if longer, until all claims for
indemnification in respect of any claims made prior to the end
of such six (6) year period shall have been finally
resolved, Parent shall, and shall cause the Company and the
Surviving Corporation to, advance any expenses (including
reasonable fees and expenses of legal counsel) of any Indemnitee
under this Section 5.9 (including in connection with
enforcing the indemnity and other obligations referred to in
this Section 5.9) as incurred to the fullest extent
permitted under applicable Law, provided that the person
to whom expenses are advanced provides an undertaking to repay
such advances to the extent required by applicable Law.
(b) At the Companys election, (i) the Company
shall obtain prior to the Effective Time tail
insurance policies with a claims period of at least six
(6) years from the Effective Time with respect to the
directors and officers liability insurance in amount
and scope no less favorable than the existing policy of the
Company for claims arising from facts or events that occurred on
or prior to the Effective Time at a cost that does not exceed
250% of the annual premium currently paid by the Company for
D&O Insurance (as defined below); or (ii) Parent will
provide, or cause the Surviving Corporation to provide, for a
period of not less than six (6) years after the Effective
Time, the Indemnitees who are insured under the Companys
directors and officers insurance and indemnification
policy with an insurance and indemnification policy that
provides coverage for events occurring at or prior to the
Effective Time (the D&O Insurance) that
is no less favorable, taken as a whole, than the existing policy
of the Company or, if substantially equivalent insurance
coverage is unavailable, the best available coverage;
provided, however, that Parent and the Surviving
Corporation shall not be required to pay an aggregate amount for
the D&O Insurance during such six (6) year period in
excess of 250% of the annual premium currently paid by the
Company for such insurance; provided, further,
that if the annual premiums of such insurance coverage exceed
such amount, Parent or the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(c) The provisions of this Section 5.9 are
(i) intended to be for the benefit of, and shall be
enforceable by, each Indemnitee, his or her heirs and his or her
representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or
contribution that any such Person may have by contract or
otherwise. The obligations of Parent and the Surviving
Corporation under this Section 5.9 shall not be
terminated or modified in such a manner as to adversely affect
the rights of any Indemnitee to whom this
Section 5.9 applies unless (x) such termination
or modification is required by applicable Law or (y) the
affected Indemnitee shall have consented in writing to such
termination or modification (it being expressly agreed that the
Indemnitees to whom this Section 5.9 applies shall
be third party beneficiaries of this Section 5.9).
(d) In the event that Parent, the Surviving Corporation or
any of their respective successors or assigns transfers or
conveys all or substantially all of its properties and assets to
any Person, then, and in each such case, proper provision shall
be made so that the successors and assigns of Parent and the
Surviving Corporation shall assume all of the obligations
thereof set forth in this Section 5.9.
(e) Notwithstanding anything herein to the contrary, if any
Action (whether arising before, at or after the Effective Time)
is made against any Indemnitee on or prior to the sixth
anniversary of the Effective Time, the provisions of this
Section 5.9 shall continue in effect until the final
disposition of such Action.
Section 5.10 Securityholder
Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any
securityholder litigation against the Company
and/or its
directors relating to the Transactions, and no such settlement
shall be agreed to without Parents prior consent.
Section 5.11 Fees
and Expenses. Except as otherwise provided in
this Agreement, all fees and expenses incurred in connection
with this Agreement and the Transactions shall be paid by the
party incurring such fees or expenses, whether or not the
Transactions are consummated.
Section 5.12 Rule 16b-3. Prior
to the Effective Time, the Company shall take such steps as may
be reasonably requested by any party hereto to cause
dispositions of Company equity securities (including
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derivative securities) pursuant to the transactions contemplated
by this Agreement by each individual who is a director or
officer of the Company to be exempt under
Rule 16b-3
promulgated under the Exchange Act to the extent permitted by
applicable Law.
Section 5.13 Employee
Matters. Parent shall, for a period of six
(6) months immediately following the Closing Date, cause
the Surviving Corporation and its Subsidiaries to provide
employees of the Company and its Subsidiaries (the
Company Employees) during their employment
with (x) the same level of base salary as in effect on the
Closing Date and (y) employee benefit plans, programs,
contracts and arrangements, other than equity-based plans, that
are no less favorable, in the aggregate, than similar employee
benefit plans, programs, contracts and arrangements provided by
the Company and its subsidiaries to Company Employees prior to
the Closing Date. Parent or one of its Affiliates shall
recognize the service of Company Employees with the Company
prior to the Closing Date as service with Parent and its
affiliates in connection with any tax-qualified pension plan,
401(k) savings plan, welfare benefit plans and policies
(including vacations and holiday policies) maintained by Parent
or one of its Affiliates which is made available following the
Closing Date by Parent or one of its Affiliates for purposes of
any waiting period, vesting, eligibility and benefit entitlement
(but excluding benefit accruals other than in the case of
severance pay and vacation entitlement), except to the extent
such credit would result in a duplication of benefits or is
prohibited under Law. Parent shall (i) waive, or cause its
insurance carriers to waive, all limitations as to pre-existing
and at-work conditions, if any, with respect to participation
and coverage requirements applicable to Company Employees under
any welfare benefit plan (as defined in Section 3(1) of
ERISA) which is made available to Company Employees following
the Closing Date by Parent or one of its affiliates to the same
extent as under any similar type of welfare benefit plan
applicable to Company Employees prior to the Closing Date, and
(ii) provide credit to Company Employees for any
co-payments, deductibles and
out-of-pocket
expenses paid by such employees under the employee benefit
plans, programs and arrangements of the Company and its
subsidiaries during the portion of the relevant plan year
including the Closing Date. The provisions of this
Section 5.13 are solely for the benefit of the
Parties, and no other Person, including any current or former
employee of the Company or any of its Subsidiaries or any of
their dependents or beneficiaries shall be regarded as a third
party beneficiary of this Section 5.13. No provision
of this Agreement shall be construed as amending any Company
Plan or as limiting the ability of the Company, Parent or any
Affiliate of either to terminate the employment of any Company
Employee or the service of any Independent Contractor or to
amend or terminate any Company Plan.
ARTICLE VI
Conditions
Precedent
Section 6.1 Conditions
to Each Partys Obligation to Effect the
Merger. The respective obligations of each
party hereto to effect the Merger shall be subject to the
satisfaction (or waiver, if permissible under applicable Law) on
or prior to the Closing Date of the following conditions:
(a) Company Stockholder
Approval. The Company Stockholder Approval
shall have been obtained;
(b) Antitrust. The waiting period
(and any extension thereof) applicable to the Merger under the
HSR Act and any other applicable competition, merger control,
antitrust or similar Law shall have been terminated or shall
have expired and the receipt of the approvals and consents have
been obtained for merger control filings required under the
Foreign Antitrust Laws (including, without limitation, the
Canada Transportation Act Condition and the Competition Act
Condition); and
(c) No Injunctions or
Restraints. No Law, injunction, judgment or
ruling enacted, promulgated, issued, entered, amended or
enforced by any Governmental Authority (collectively,
Restraints) shall be in effect enjoining,
restraining, preventing or prohibiting consummation of the
Merger or making the consummation of the Merger illegal.
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Section 6.2 Conditions
to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are
further subject to the satisfaction (or waiver, if permissible
under applicable Law) on or prior to the Closing Date of the
following conditions:
(a) Representations and
Warranties. The representations and
warranties of the Company set forth in (i)
Sections 3.3(a), 3.3(b), 3.3(d),
3.5(b), 3.5(f), 3.6(b), 3.18,
3.19 and 3.20 shall be true and correct on and as
of the date of this Agreement and as of the Closing Date as if
made on and as of the Closing Date (or, with respect to
Section 3.18, at and as of the specific date given),
(ii) Section 3.2(a) shall be true and correct in all
but de minimis respects on and as of the date of this
Agreement and as if made on and as of the Closing Date (or, if
given as of a specific date, at and as of such date), and
(iii) this Agreement, other than those Sections
specifically identified in subclause (i) or (ii) of
this paragraph, disregarding all qualifications and exceptions
contained therein relating to materiality or Company Material
Adverse Effect, shall be true and correct on and as of the date
of this Agreement and as of the Closing Date as if made on the
Closing Date (or, if given as of a specific date, at and as of
such date), except where the failure to be true and correct,
individually or in the aggregate, would not constitute a Company
Material Adverse Effect. Parent shall have received a
certificate signed on behalf of the Company by the chief
executive officer or the chief financial officer of the Company
to such effect;
(b) Performance of Obligations of the
Company. The Company shall have performed in
all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer or the chief financial
officer of the Company to such effect;
(c) Director Resignations. Parent
shall have received written resignation letters from each of the
members of the respective board of directors of the Company and
its Subsidiaries, effective as of the Effective Time; and
(d) Appraisal Rights. There shall
be no more than 15% Dissenting Shares.
Section 6.3 Conditions
to Obligations of the Company. The obligation
of the Company to effect the Merger is further subject to the
satisfaction (or waiver, if permissible under applicable Law) on
or prior to the Closing Date of the following conditions:
(a) Representations and
Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement,
disregarding all qualifications and exceptions contained therein
relating to materiality, shall be true and correct in all
material respects, in each case on and as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date (or, if given as of a specific date, at and as
of such date), except where the failure to be true and correct
would not, individually or in the aggregate, reasonably be
expected to impair in any material respect the ability of Parent
or Merger Sub to perform its obligations under this Agreement or
prevent or materially delay consummation of the Transactions.
The Company shall have received a certificate signed on behalf
of Parent by the chief executive officer or the chief financial
officer of Parent to such effect; and
(b) Performance of Obligations of Parent and Merger
Sub. Parent and Merger Sub shall have
performed in all material respects all obligations required to
be performed by them under this Agreement at or prior to the
Closing Date, and the Company shall have received a certificate
signed on behalf of Parent by the chief executive officer or the
chief financial officer of Parent to such effect.
Section 6.4 Frustration
of Closing Conditions. None of the Company,
Parent or Merger Sub may rely on the failure of any condition
set forth in Section 6.1, 6.2 or 6.3,
as the case may be, to be satisfied if such failure was caused
by such partys failure to use its commercially reasonable
efforts to consummate the Merger and the other Transactions, as
required by and subject to Section 5.4.
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ARTICLE VII
Termination
Section 7.1 Termination. This
Agreement may be terminated and the Transactions abandoned at
any time prior to the Effective Time, whether before or after
receipt of the Company Stockholder Approval (except as otherwise
expressly noted):
(a) by the mutual written consent of the Company and Parent
duly authorized by each of their respective boards of
directors; or
(b) by either of the Company or Parent:
(i) if the Merger shall not have been consummated on or
before May 31, 2011 (the Walk-Away
Date); provided, however, that the right
to terminate this Agreement under this
Section 7.1(b)(i) shall not be available to a party
if the failure of the Merger to have been consummated on or
before the Walk-Away Date was primarily due to the failure of
such party to perform any of its obligations under this
Agreement; or
(ii) if any Restraint having the effect set forth in
Section 6.1(c) shall be in effect and shall have
become final and nonappealable; provided, however,
that the right to terminate this Agreement under this
Section 7.1(b)(ii) shall not be available to a party
if the issuance of such final, nonappealable Restraint was
primarily due to the failure of such party to perform any of its
obligations under this Agreement; or
(iii) if the Company Stockholder Approval shall not have
been obtained at the Company Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof; or
(c) by Parent,
(i) if the Company shall have materially breached or failed
to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a
condition set forth in Section 6.2(a) or (b)
and (B) cannot be cured by the Company by the earlier of
(x) twenty (20) calendar days following receipt of
written notice from Parent of such breach or failure or
(y) the Walk-Away Date; or
(ii) if: (A) the board of directors of the Company
shall have failed to include the Company Board Recommendation in
the Proxy Statement or shall have effected a Company Adverse
Recommendation Change; (B) at any time prior to the Company
Stockholder Approval, the board of directors of the Company
shall have failed to recommend against any Takeover Proposal, or
failed to reaffirm the Company Board Recommendation, in each
case, within five (5) business days after (x) the
public announcement of any Takeover Proposal and (y) the
receipt of a written request to do so from Parent; (C) the
Company enters into a Company Acquisition Agreement;
(D) the Company shall have failed to call the Company
Stockholders Meeting in accordance with
Section 5.1(b) or shall have failed to prepare and
mail the Proxy Statement in accordance with
Section 5.1(a) and either such breach shall remain
uncured for ten (10) business days after the Companys
receipt of written notice thereof from Parent; or (E) the
Company or the board of directors of the Company shall have
publicly announced its intention to do any of the
foregoing; or
(d) by the Company:
(i) if Parent or Merger Sub shall have materially breached
or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement, which
breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 6.3(a)
or (b) and (B) cannot be cured by Parent by the
earlier of (x) twenty (20) calendar days following
receipt of written notice from the Company of such breach or
failure or (y) the Walk-Away Date; or
(ii) prior to the receipt of the Company Stockholder
Approval, in order to concurrently enter into a Company
Acquisition Agreement that constitutes a Superior Proposal, if,
(A) the Company has (without giving effect to any
materiality qualifiers set forth in Section 5.3)
complied in all material respects with the requirements of
Section 5.3 and (B) prior to or concurrently
with such termination, the Company pays the fee due under
Section 7.3 (as contemplated by clause (y) of
Section 7.3(a)).
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Section 7.2 Effect
of Termination. In the event of the
termination of this Agreement as provided in
Section 7.1, written notice thereof shall be given
to the other party or parties, specifying the provision hereof
pursuant to which such termination is made, and this Agreement
shall forthwith become null and void (other than
Sections 7.2 and 7.3 and
Article VIII and the Confidentiality Agreement in
accordance with their respective terms, all of which shall
survive termination of this Agreement), and there shall be no
liability on the part of Parent, Merger Sub or the Company,
except (a) the Company may have liability as provided in
Section 7.3, and (b) such termination shall not
relieve any party from liability for any willful and material
breach of this Agreement. For purposes of this Agreement,
willful and material breach shall mean a material
breach that is a consequence of an act or failure to act by the
breaching party with the knowledge that such act or failure to
act would, or would be reasonably expected to, cause a material
breach of this Agreement.
Section 7.3 Termination
Fee.
(a) In the event that:
(i) (A) a Takeover Proposal shall have been made,
proposed or communicated, after the date of this Agreement and
not withdrawn prior to the Company Stockholders Meeting or prior
to the termination of this Agreement if there has been no
Company Stockholders Meeting, and (B) following the
occurrence of an event described in the preceding clause (A),
this Agreement is terminated by the Company or Parent pursuant
to Section 7.1(b)(i) or
Section 7.1(b)(iii) or by Parent pursuant to
Section 7.1(c)(i) and (C) the Company enters
into a definitive agreement with respect to any Takeover
Proposal, or any Takeover Proposal is consummated, in either
case within one (1) year after the date this Agreement;
provided that for purposes of clause (C) of this
Section 7.3(a)(i), the references to 20%
in the definition of Takeover Proposal shall be deemed to be
references to 50%; or
(ii) this Agreement is terminated by the Company pursuant
to Section 7.1(d)(ii); or
(iii) this Agreement is terminated by Parent pursuant to
Section 7.1(c)(ii);
then, in any such event under clause (i), (ii) or
(iii) of this Section 7.3(a), the Company shall
pay as directed by Parent the Termination Fee (as defined
below), by wire transfer of immediately available funds
(x) in the case of Section 7.3(a)(iii), within
two (2) business days after such termination,
(y) prior to or currently with such termination if pursuant
to Section 7.1(d)(ii), or (z) in the case of
Section 7.3(a)(i), two (2) business days after
the earlier of the entry into a Company Acquisition Agreement or
the consummation of a Takeover Proposal; it being understood
that in no event shall the Company be required to pay the
Termination Fee on more than one occasion. As used herein,
Termination Fee shall mean a cash amount
equal to $7,729,106.
(b) Each of the parties hereto acknowledge that the
agreements contained in this Section 7.3 are an
integral part of the Transactions, and that without these
agreements, the other party would not enter into this Agreement;
accordingly, if the Company fails to timely pay any amount due
pursuant to this Section 7.3, and, in order to
obtain the payment, Parent commences a suit which results in a
judgment against the Company for the payment set forth in this
Section 7.3, the Company shall pay Parents
reasonable and documented costs and expenses (including
reasonable and documented attorneys fees) in connection
with such suit, together with interest on such amount at the
prime rate as published in The Wall Street Journal in effect on
the date such payment was required to be made through the date
such payment was actually received.
ARTICLE VIII
Miscellaneous
Section 8.1 No
Survival of Representations and
Warranties. The representations, warranties
and agreements in this Agreement shall terminate at the
Effective Time or, except as otherwise provided in
Section 7.2, upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except
that the agreements set forth in Article II and
Sections 5.9, 5.11, and 5.13 and any
other agreement in this Agreement which contemplates performance
after the Effective Time shall survive the Effective Time
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indefinitely. The Confidentiality Agreement shall
(i) survive termination of this Agreement in accordance
with its terms and (ii) terminate as of the Effective Time.
Section 8.2 Amendment
or Supplement. At any time prior to the
Effective Time, this Agreement may be amended or supplemented in
any and all respects, whether before or after receipt of the
Company Stockholder Approval, by written agreement of the
parties hereto, by action taken by their respective boards of
directors; provided, however, that following
approval of the Transactions by the stockholders of the Company,
there shall be no amendment or change to the provisions hereof
which by Law would require further approval by the stockholders
of the Company without such approval.
Section 8.3 Extension
of Time, Waiver, Etc. At any time prior to
the Effective Time, any party may, subject to applicable Law,
(a) waive any inaccuracies in the representations and
warranties of any other party hereto, (b) extend the time
for the performance of any of the obligations or acts of any
other party hereto or (c) waive compliance by the other
party with any of the agreements contained herein or, except as
otherwise provided herein, waive any of such partys
conditions. Notwithstanding the foregoing, no failure or delay
by the Company, Parent or Merger Sub in exercising any right
hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 8.4 Assignment. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise, by any of the parties without the prior
written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. Any purported
assignment not permitted under this Section shall be null and
void.
Section 8.5 Counterparts. This
Agreement may be executed in counterparts (each of which shall
be deemed to be an original but all of which taken together
shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
Section 8.6 Entire
Agreement; No Third-Party Beneficiaries. This
Agreement and the Company Disclosure Schedule together with the
other instruments referred to herein including the
Confidentiality Agreement (a) constitute the entire
agreement, and supersede all other prior agreements and
understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and thereof
and (b) except for (i) if the Effective Time occurs,
(A) the right of the Companys stockholders to receive
the Merger Consideration at the Effective Time and (B) the
right of the holders of Options to receive the Option
Consideration on the Closing Date; and (ii) the provisions
of Section 5.9, are not intended to and shall not
confer upon any Person other than the parties hereto any rights
or remedies hereunder. Notwithstanding the foregoing, Parent and
Merger Sub hereby expressly acknowledge and agree that, prior to
the Effective Time, the Companys measure of damages for a
willful and material breach of this Agreement by Parent or
Merger Sub may include the loss of the economic benefits of the
Transactions to the Companys stockholders and holders of
Options, whether or not this Agreement has been validly
terminated pursuant to Article VII.
Section 8.7 Governing
Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in
accordance with, the Laws of the State of Delaware, applicable
to contracts executed in and to be performed entirely within
that State.
(b) Each of the parties hereto, on behalf of itself and its
respective Affiliates, (i) consents to submit itself to the
personal jurisdiction of the Delaware Court of Chancery or the
other courts of the State of Delaware, in each case in
connection with any dispute arising out of, in connection with,
in respect of, or in any way relating to (A) the
negotiation, execution and performance of this Agreement and the
Transactions, (B) the interpretation and enforcement of the
provisions of this Agreement and any agreements entered into in
connection herewith, or (C) any actions of or omissions of
any party in any way connected with, related to or giving rise
to any of the foregoing matters (clauses (A)-(C) collectively,
the Covered Matters), (ii) hereby
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waives, and agrees not to assert as a defense in any Action with
regard to or involving a Covered Matter that such Action may not
be brought or is not maintainable in said courts or that venue
thereof may not be appropriate or that this Agreement or any
agreement entered into in connection herewith may not be
enforced in any such court, (iii) irrevocably agree that
all claims with respect to any such Action shall be heard and
determined exclusively by such courts, (iv) agrees that it
will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court,
(v) consents to and grants to any such court jurisdiction
over the person of such parties and over the subject matter of
any such dispute and agrees that the mailing of process or other
papers in connection with such Action in the manner specified in
Section 8.9 or in such other manner as may be
permitted by Law shall be valid and sufficient service thereof
and (vi) agrees that it will not bring any Action relating
to any Covered Matter in any court other than any such court.
Each of the parties, on behalf of itself and each of its
Affiliates, irrevocably and unconditionally waives any objection
to the laying of venue of any Action arising out of this
Agreement or the Transactions in Delaware Court of Chancery or
other courts of the State of Delaware, as applicable pursuant to
clause (i) above, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any
such court that any such Action brought in any such court has
been brought in an inconvenient forum.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THE COVERED MATTERS.
Section 8.8 Specific
Enforcement. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the Company, Parent and Merger Sub shall
be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Delaware Court of Chancery
or the other courts of the State of Delaware, this being in
addition to any other remedy to which they are entitled at law
or in equity. The Company, on the one hand, and Parent and
Merger Sub, on the other hand hereby agree not to raise any
objections to the availability of the equitable remedy of
specific performance to prevent or restrain breaches or
threatened breaches of this Agreement by such party or parties,
and to specifically enforce the terms and provisions of this
Agreement to prevent breaches or threatened breaches of, or to
enforce compliance with, the covenants and obligations of such
party or parties under this Agreement.
Section 8.9 Notices. All
notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed given if
delivered personally, facsimiled (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties
at the following addresses:
If to Parent or Merger Sub, to:
TransForce Inc.
8801 Trans-Canada Highway, Suite 500
Saint-Laurent (Quebec) H4S 1Z6
Canada
Attention: President and Chief Executive Officer
Facsimile:
514-337-4200
with copies (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Jonathan D. Morris and R. Alec Dawson
Facsimile:
(212) 309-6001
A-35
and
Heenan Blaikie LLP
1250 René-Lévesque Blvd. West
Suite 2500
Montreal, Quebec H3B 4Y1
Attention: Neil Wiener
Facsimile
(514) 921-1208
If to the Company, to:
Dynamex Inc.
5429 LBJ Freeway, Suite 1000
Dallas, TX 75240
Attention: Ray E. Schmitz
Facsimile:
(214) 560-9349
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300
Dallas, TX 75201
Attention: R. Scott Cohen, Esq.
Jeffrey B.
Hitt, Esq.
Facsimile:
(214) 746-7777
or such other address or facsimile number as such party may
hereafter specify by like notice to the other parties hereto.
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof
if received prior to 5 P.M. in the place of receipt and
such day is a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the
place of receipt.
Section 8.10 Severability. If
any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 8.11 Definitions.
(a) As used in this Agreement, the following terms have the
meanings ascribed thereto below:
Affiliate shall mean, as to any Person, any
other Person that, directly or indirectly, controls, or is
controlled by, or is under common control with, such Person. For
this purpose, control (including, with its
correlative meanings, controlled by and under
common control with) shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of
management or policies of a Person, whether through the
ownership of securities or partnership or other ownership
interests, by contract or otherwise.
business day shall mean any day of the year,
other than a Saturday or Sunday, on which national banking
institutions in the City of New York are open to the public for
conducting business and are not required or authorized to close.
Canada Transportation Act means the Canada
Transportation Act, 1996, c.10 and regulations thereto, as
amended.
A-36
Canada Transportation Act Condition means
that notice has been received from the Canadian Minister of
Transport that the transaction contemplated in and by this
Agreement does not raise issues with respect to the public
interest as it relates to national transportation.
Company Board Recommendation shall mean the
recommendation of the board of directors of the Company to its
stockholders that the Company Stockholder Approval be given.
Company Plan shall mean (i) each
employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (ERISA)), (ii) any other
employee benefit plan, policy or agreement, including without
limitation, any stock option, stock purchase, stock award, stock
appreciation, phantom stock, deferred compensation, pension,
retirement, savings, profit sharing, incentive bonus, health,
life insurance, cafeteria, flexible spending, dependent care,
fringe benefit, vacation pay, holiday pay, disability, sick pay,
workers compensation, unemployment, severance, employee
loan (other than any 401(k) plan loan), retention, change in
control or education assistance plan, policy or agreement, and
(iii) any employment or consulting agreement, in each case,
which is sponsored or maintained by the Company or any of its
Subsidiaries, or to which the Company or any of its Subsidiaries
contributes or is required to contribute, on behalf of current
or former employees, Independent Contractors or directors of the
Company or its Subsidiaries or their beneficiaries or
dependents, other than any governmental plan or program.
Company Stock Plans shall mean the Amended
and Restated 1996 Stock Option Plan and the 2008 Equity
Compensation Plan.
Competition Act means the Competition Act,
R.S.C. 1985, c. C-34 and regulations thereto, as amended.
Competition Act Condition means that either:
(i) an advance ruling certificate (an
ARC) pursuant to Section 102 of the
Competition Act has been issued by the Commissioner in respect
of the transaction contemplated in and by this Agreement; or
(ii) a no action letter in respect of the
transaction contemplated in and by this Agreement has been
received from the Commissioner indicating that the Commissioner
has determined that she does not at that time intend to make an
application for an order under Section 92 of the
Competition Act in respect of the transaction contemplated in
and by this Agreement; or (iii) in the event that neither
an ARC nor a no action letter is issued or received,
the relevant waiting period under Section 123 of the
Competition Act shall have expired and there shall be no
threatened or actual application by the Commissioner for an
order under Sections 92 or 100 of the Competition Act.
Environmental Laws shall mean: Laws relating
to pollution, protection of the environment or human health or
safety as related to environmental matters, including Laws
relating to emissions, spills, discharges, generation, storage,
leaks, injection, leaching, seepage, releases or threatened
releases of Hazardous Substances into the environment or
otherwise relating to the processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Substances.
Filed Company SEC Documents shall mean:
(i) the Companys annual report on
Form 10-K
for the year ended July 31, 2010, as filed with the SEC on
September 22, 2010, (ii) the Companys quarterly
report on
Form 10-Q
for the quarter ended October 31, 2009, as filed with the
SEC on December 10, 2009; (iii) the Companys
quarterly report on
Form 10-Q
for the quarter ended January 31, 2010, as filed with the
SEC on March 5, 2010; and (iv) the Companys
quarterly report on
Form 10-Q
for the quarter ended April 30, 2010, as filed with the SEC
on June 4, 2010.
GAAP shall mean generally accepted accounting
principles in the United States.
Governmental Authority shall mean any
government, court, regulatory or administrative agency,
commission or authority or other governmental instrumentality,
federal, state, provincial or local, municipal, domestic,
foreign or multinational or any arbitral authority.
Hazardous Substance shall mean: (i) any
petroleum, hazardous or toxic petroleum-derived substance or
petroleum product, flammable or explosive material, radioactive
materials, asbestos in any
A-37
form that is or could become friable, urea formaldehyde foam
insulation, foundry sand or polychlorinated biphenyls (PCBs); or
(ii) any chemical or other material or substance that is
regulated, classified or defined as or included in the
definition of hazardous substance, hazardous
waste, hazardous material, extremely
hazardous substance, restricted hazardous
waste, toxic substance, toxic
pollutant, pollutant or
contaminant under any applicable Law, or any similar
denomination intended to classify substance by reason of
toxicity, carcinogenicity, ignitability, corrosivity or
reactivity under any applicable Law.
HSR Act shall mean the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
IC Entities shall mean an entity that has a
contractual relationship with the Company or any of its
Affiliates whereby such entity provides certain services for the
Company or its Affiliates as an independent contractor.
Indebtedness shall mean: (i) all of the
indebtedness for borrowed money of the Company or any of its
Subsidiaries; (ii) all obligations of the Company or any of
its Subsidiaries evidenced by notes, bonds, debentures or
similar instruments; (iii) all obligations of the Company
or any of its Subsidiaries for the deferred purchase price of
property or services; (iv) all obligations of the Company
or any of its Subsidiaries under capitalized leases with respect
to which any of them are liable as an obligor; (v) all
indebtedness of the Company or any of its Subsidiaries created
or arising under any conditional sale or other title retention
agreement; (vi) all outstanding obligations of the Company
or any of its Subsidiaries under acceptance, letter of credit or
similar facilities or surety bonds; (vii) all indebtedness
of the type described in clauses (i) through
(vi) above guaranteed, directly or indirectly, in any
manner by the Company or any of its Subsidiaries, including
interest and penalties thereon; (viii) any indebtedness of
the type described in clauses (i) through (vii) above
secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Lien on assets or property owned by the Company or any of its
Subsidiaries.
Independent Contractor shall mean an
independent contractor, dependent contractor or consultant who
is a natural person.
Knowledge of the Company shall mean, with
respect to any matter in question, the knowledge after
reasonable inquiry of the Persons set forth in Section 8.11
of the Company Disclosure Schedule.
Liens shall mean all liens, pledges, security
interests and other encumbrances.
Person shall mean an individual, a
corporation, a limited liability company, a partnership, an
association, a trust or any other entity, including a
Governmental Authority.
Revolver shall mean the revolving credit
facility pursuant to that certain Credit Agreement, dated as of
March 2, 2004, by and among the Company, as borrower, and
certain of its Subsidiaries, as guarantors, and Bank of America,
N.A., as administrative agent and a lender, as amended through
the date of this Agreement and with respect to which Parent has
prior to the date of this Agreement been provided with copies
thereof.
SEC shall mean the Securities and Exchange
Commission.
Subsidiary when used with respect to any
party, shall mean any corporation, limited liability company,
partnership, association, trust or other entity of which
securities or other ownership interests representing more than
50% of the equity and more than 50% of the ordinary voting power
(or, in the case of a partnership, more than 50% of the general
partnership interests) are, as of such date, owned by such party
or one or more Subsidiaries of such party or by such party and
one or more Subsidiaries of such party.
Taxes shall mean (i) all federal, state,
provincial, local, municipal or foreign taxes, charges, imposts,
levies or other assessments, including all net income, gross
receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated
A-38
taxes, customs duties, assessments and charges of any kind
whatsoever, and (ii) all interest, penalties, fines,
additions to tax or additional amounts imposed by any
Governmental Authority in connection with any item described in
clause (i).
Tax Returns shall mean any return, report,
claim for refund, estimate, information return or statement or
other similar document relating to or required to be filed with
any Governmental Authority with respect to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.
Transactions refers collectively to
this Agreement and the transactions contemplated hereby,
including the Merger.
The following terms are defined on the page of this Agreement
set forth after such term below:
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Acceptable Confidentiality Agreement
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35
|
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Action
|
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|
16
|
|
Affiliate
|
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54
|
|
Agreement
|
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1
|
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Antitrust Laws
|
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39
|
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ARC
|
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55
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Balance Sheet Date
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15
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Bankruptcy and Equity Exception
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11
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business day
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54
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Canada Transportation Act
|
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54
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Canada Transportation Act Condition
|
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54
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Certificate
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4
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Certificate of Merger
|
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2
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Closing
|
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2
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Closing Date
|
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2
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Code
|
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6
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Company
|
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1
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Company Acquisition Agreement
|
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37
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Company Adverse Recommendation Change
|
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37
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Company Board Recommendation
|
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54
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Company Charter Documents
|
|
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9
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Company Common Stock
|
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3
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Company Contracts
|
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24
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Company Disclosure Schedule
|
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8
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Company Employees
|
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44
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Company Intellectual Property
|
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21
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Company Material Adverse Effect
|
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8
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Company Material Contract
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24
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Company Owned Intellectual Property
|
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21
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Company Owned Software
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21
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Company Pension Plan
|
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19
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Company Performance Unit
|
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7
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Company Plan
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18, 54
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Company Preferred Stock
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10
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Company Registered Intellectual Property
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21
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A-39
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Company Restricted Stock
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7
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Company SEC Documents
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13
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Company Stock Plans
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55
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Company Stockholder Approval
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13
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Company Stockholders Meeting
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32
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Competition Act
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55
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Competition Act Condition
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55
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Contract
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12
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Copyrights
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22
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Covered Matters
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|
51
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|
D&O Insurance
|
|
|
43
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|
DashNow Merger Sub
|
|
|
1
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|
DashNow Parent
|
|
|
1
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|
DGCL
|
|
|
2
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|
Dissenting Shares
|
|
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6
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|
Dissenting Stockholders
|
|
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6
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|
Effective Time
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2
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|
Environmental Laws
|
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55
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ERISA
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54
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ERISA
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|
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18
|
|
Exchange Act
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|
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13
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|
Fairness Opinion
|
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26
|
|
Filed Company SEC Documents
|
|
|
55
|
|
Foreign Antitrust Laws
|
|
|
13
|
|
GAAP
|
|
|
55
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|
Governmental Authority
|
|
|
56
|
|
Hazardous Substance
|
|
|
56
|
|
HSR Act
|
|
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56
|
|
IC Entities
|
|
|
56
|
|
Indebtedness
|
|
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56
|
|
Indemnitee
|
|
|
42
|
|
Indemnitees
|
|
|
42
|
|
Independent Contractor
|
|
|
56
|
|
Individual Agreements
|
|
|
18
|
|
Intellectual Property Rights
|
|
|
21
|
|
IRS
|
|
|
17
|
|
Knowledge
|
|
|
57
|
|
Laws
|
|
|
16
|
|
Liens
|
|
|
57
|
|
Marks
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|
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21
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|
Merger
|
|
|
1
|
|
Merger Consideration
|
|
|
4
|
|
Merger Sub
|
|
|
1
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|
Non-U.S.
Company Plans
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|
|
18
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|
Option
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7
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|
A-40
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|
|
|
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Option Consideration
|
|
|
7
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|
Parent
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|
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1
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|
Patents
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|
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21
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|
Paying Agent
|
|
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4
|
|
Permits
|
|
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16
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|
Person
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57
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|
Prior Merger Agreement
|
|
|
1
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|
Proxy Statement
|
|
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13
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|
Real Property Leases
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|
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25
|
|
Representatives
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|
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35
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|
Restraints
|
|
|
45
|
|
Revolver
|
|
|
57
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|
SEC
|
|
|
57
|
|
Securities Act
|
|
|
9
|
|
Software
|
|
|
22
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|
Subsidiary
|
|
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57
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|
Subsidiary Documents
|
|
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10
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|
Superior Proposal
|
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38
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|
Surviving Corporation
|
|
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2
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|
Takeover Proposal
|
|
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38
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|
Tax Returns
|
|
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57
|
|
Taxes
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|
|
57
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|
Termination Fee
|
|
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49
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|
Trade Secrets
|
|
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22
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|
Transactions
|
|
|
57
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|
U.S. Company Plans
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18
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Walk-Away Date
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47
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willful and material breach
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48
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Section 8.12 Interpretation.
(a) When a reference is made in this Agreement to an
Article, a Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
include, includes or
including are used in this Agreement, they shall be
deemed to be followed by the words without
limitation. The words hereof,
herein and hereunder and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. Unless the context otherwise requires, the word
or is not exclusive. All terms defined in this
Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its
permitted assigns and successors.
(b) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted
A-41
by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Agreement.
Section 8.13 Non-Recourse. Each
party hereto covenants and agrees that it shall not institute,
and shall cause its Affiliates not to institute, an Action
arising under or in connection with, this Agreement or the
transactions contemplated hereby, except against the other
parties hereto. Any claim or cause of action based upon, arising
out of, or related to this Agreement may only be brought against
Persons that are expressly named as parties hereto, and then
only with respect to the specific obligations set forth herein.
No former, current or future direct or indirect equity holders,
controlling Persons, stockholders, directors, officers,
employees, agents, Affiliates, members, managers, general or
limited partners or assignees of the Company, Parent or Merger
Sub or any of their respective Affiliates shall have any
liability or obligation for any of the representations,
warranties, covenants, agreements, obligations or liabilities of
the Company, Parent or Merger Sub under this Agreement or of or
for any Action based on, in respect of, or by reason of, the
transactions contemplated hereby (including the breach,
termination or failure to consummate such transactions), in each
case whether based on Contract, tort, strict liability, other
Laws or otherwise and whether by piercing the corporate veil, by
a claim by or on behalf of a party hereto or another Person or
otherwise.
[Signature
Page Follows]
A-42
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be duly executed and delivered
as of the date first above written.
TRANSFORCE INC.
Name: Alain Bédard
|
|
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Title:
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Chairman, President and Chief Executive Officer
|
TRANSFORCE ACQUISITION CORP.
Name: Alain Bédard
|
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Title:
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Chairman, President and Chief Executive Officer
|
DYNAMEX INC.
Name: James L. Welch
|
|
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|
Title:
|
Chief Executive Officer and President
|
[Agreement
and Plan of Merger]
Jackson T. Stephens,
1923-2005
Chairman Emeritus in Perpetuity
December 14,
2010
The Board of Directors of
Dynamex Inc.
5429 LBJ Freeway, Suite 1000
Dallas, Texas 75240
Gentlemen:
We have acted as your financial advisor in connection with the
proposed merger of TransForce Acquisition Corp. (Merger
Sub), an indirect wholly owned subsidiary of TransForce
Inc. (Parent), with and into Dynamex Inc. (the
Company) (collectively, the
Transaction). The terms and conditions of the
Transaction are more fully set forth in the Agreement and Plan
of Merger, dated as of December 14, 2010 (the
Agreement). As a result of all such terms and
conditions, we understand that the consideration for each issued
and outstanding share of common stock of the Company, par value
$.01 per share (the Common Stock), except for
canceled and dissenting shares (as described in the Agreement)
will be converted into the right to receive $25.00 per share in
cash, without interest.
You have requested our opinion as to whether the Transaction is
fair to the Companys public shareholders from a financial
point of view. For purposes of this letter, the public
shareholders of the Company means the holders of
outstanding shares of the Companys common stock, other
than the Parent and its directors, officers and affiliates and
the directors, officers, managers and affiliates of the Company.
In connection with rendering our opinion we have:
|
|
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|
(i)
|
analyzed certain publicly available financial statements and
reports regarding the Company;
|
|
|
(ii)
|
analyzed certain internal financial statements and other
financial and operating data (including financial forecasts for
fiscal years
2011-2015)
concerning the Company prepared by the management of the Company;
|
|
|
(iii)
|
reviewed the reported prices and trading activity for the Common
Stock of the Company;
|
|
|
(iv)
|
compared the financial performance of the Company and the prices
and trading activity of the common stock with that of certain
other comparable publicly-traded companies and their securities;
|
|
|
(v)
|
reviewed the financial terms, to the extent publicly available,
of certain comparable transactions;
|
|
|
(vi)
|
reviewed the forecasted potential future cash flows of the
Company;
|
|
|
(vii)
|
reviewed the most recent draft provided to us of the Agreement
and related documents;
|
|
|
(viii)
|
discussed with management of the Company the operations of and
future business prospects for the Company;
|
|
|
(ix)
|
assisted in your deliberations regarding the material terms of
the Transaction and your negotiations with the Parent; and
|
|
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(x)
|
performed such other analyses and provided such other services
as we have deemed appropriate.
|
|
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Stephens Inc.
|
|
|
300 Crescent Court
|
|
|
214-258-2700 t
|
|
|
www.stephens.com
|
Investment Banking
|
|
|
Suite 600
|
|
|
214-258-2750 f
|
|
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|
Dallas, TX 75201
|
|
|
877-749-9991
|
|
|
|
December 14, 2010
Page 2
We have relied on the accuracy and completeness of the
information and financial data provided to us by the Company and
of the other information reviewed by us in connection with the
preparation of our opinion, and our opinion is based upon such
information. We have not assumed any responsibility for
independent verification of the accuracy or completeness of any
of such information or financial data. The management of the
Company has assured us that they are not aware of any relevant
information that has been omitted or remains undisclosed to us.
We have not assumed any responsibility for making or undertaking
an independent evaluation or appraisal of any of the assets or
liabilities of the Company or the Parent, and we have not been
furnished with any such evaluations or appraisals; nor have we
evaluated the solvency or fair value of the Company or the
Parent under any laws relating to bankruptcy, insolvency or
similar matters. We have not assumed any obligation to conduct
any physical inspection of the properties or facilities of the
Company. With respect to the financial forecasts prepared by the
management of the Company we have assumed that such financial
forecasts have been reasonably prepared and reflect the best
currently available estimates and judgments of the management of
the Company as to the future financial performance of the
Company. We have also assumed that the representations and
warranties contained in the Agreement and all related documents
are true, correct and complete in all material respects.
As part of our investment banking business, we regularly issue
fairness opinions and are continually engaged in the valuation
of companies and their securities in connection with business
reorganizations, private placements, negotiated underwritings,
mergers and acquisitions and valuations for estate, corporate
and other purposes. We are familiar with the Company; we
regularly publish research reports on the Company; and we have
previously provided investment banking services to the Company.
We serve as financial adviser to the Board of Directors of the
Company in connection with the Transaction, and we are entitled
to receive from the Company reimbursement of our expenses and a
fee for our services as financial adviser to the Company, a
significant portion of which is contingent upon the consummation
of the Transaction. We are also entitled to receive a fee from
the Company for providing our fairness opinion to the Company,
which fee is not contingent upon consummation of the
Transaction. The Company has also agreed to indemnify us for
certain liabilities arising out of our engagement, including
certain liabilities that could arise out of our providing this
opinion letter. Stephens expects to pursue future investment
banking services assignments from participants in this
Transaction. In the ordinary course of business, Stephens Inc.
and its affiliates at any time may hold long or short positions,
and may trade or otherwise effect transactions as principal or
for the accounts of customers, in debt or equity securities or
options on securities of the Company or of any other participant
in the Transaction.
We are not legal, accounting, regulatory or tax experts and have
relied solely, and without independent verification, on the
assessments of the Company and its other advisors with respect
to such matters.
Our opinion is necessarily based upon market, economic and other
conditions as they exist and can be evaluated on, and on the
information made available to us as of, the date hereof. It
should be understood that subsequent developments may affect
this opinion and that we do not have any obligation to update,
revise or reaffirm this opinion. We have assumed that the
Transaction will be consummated on the terms of the latest draft
of the Agreement provided to us, without material waiver or
modification. We have assumed that in the course of obtaining
the necessary regulatory, lending or other consents or approvals
(contractual or otherwise) for the Transaction, no restrictions,
including any divestiture requirements or amendments or
modifications, will be imposed that would have a material
adverse effect on the contemplated benefits of the Transaction
to the public shareholders of the Company. We are not expressing
any opinion herein as to the price at which the Common Stock or
any other securities of the Company will trade following the
announcement of the Transaction.
This opinion is for the use and benefit of the Board of
Directors of the Company for the purposes of its evaluation of
the Transaction. Our opinion does not address the merits of the
underlying decision by the Company to engage in the Transaction,
the merits of the Transaction as compared to other alternatives
potentially available to the Company or the relative effects of
any alternative transaction in which the
December 14, 2010
Page 3
Company might engage, nor is it intended to be a recommendation
to any person as to how to vote in connection with the
Transaction. This opinion is not intended to confer any rights
or remedies upon any other person. In addition, except as
explicitly set forth in this letter, you have not asked us to
address, and this opinion does not address, the fairness to, or
any other consideration of, the holders of any class of
securities, creditors or other constituencies of the Company
other than the public shareholders of the Common Stock. We have
not been asked to express any opinion, and do not express any
opinion, as to the fairness of the amount or nature of the
compensation to any of the Companys officers, directors or
employees, or to any group of such officers, directors or
employees, relative to the compensation to other shareholders of
the Company. Our fairness opinion committee has approved the
opinion set forth in this letter. Neither this opinion nor its
substance may be disclosed by you to anyone other than your
advisors without our written permission, except that
(A) the Company may provide a copy of this opinion to
Merger Sub and Parent and their respective advisors and
(B) this opinion and a summary discussion of our underlying
analyses and role as financial adviser to the Company may be
included in communications to shareholders of the Company and in
any materials required to be filed by the Company with the
Securities and Exchange Commission, provided that we approve of
the content of such disclosures prior to any filing or
publication of such shareholder communications.
Based on the foregoing and our general experience as investment
bankers, and subject to the qualifications stated herein, we are
of the opinion on the date hereof that the consideration to be
received by the public shareholders of the Company in the
Transaction is fair to them from a financial point of view.
Very truly yours,
STEPHENS INC.
ANNEX C
GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
§
262. Appraisal rights
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
corporation; the words stock and share
mean and include what is ordinarily meant by those words; and
the words depository receipt mean a receipt or other
instrument issued by a depository representing an interest in 1
or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 255, § 256,
§ 257, § 258, § 263 or
§ 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 255, 256, 257, 258, 263 and 264
of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 or
§ 267 of this title is not owned by the parent
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a
C-1
provision, the procedures of this section, including those set
forth in subsections (d) and (e) of this section,
shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting (or such members who received
notice in accordance with § 255(c) of this title) with
respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) of this section that
appraisal rights are available for any or all of the shares of
the constituent corporations, and shall include in such notice a
copy of this section and, if 1 of the constituent corporations
is a nonstock corporation, a copy of § 114 of this
title. Each stockholder electing to demand the appraisal of such
stockholders shares shall deliver to the corporation,
before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholders shares.
Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
stockholders shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection
and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228, § 253, or § 267 of this
title, then either a constituent corporation before the
effective date of the merger or consolidation or the surviving
or resulting corporation within 10 days thereafter shall
notify each of the holders of any class or series of stock of
such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such
class or series of stock of such constituent corporation, and
shall include in such notice a copy of this section and, if 1 of
the constituent corporations is a nonstock corporation, a copy
of § 114 of this title. Such notice may, and, if given
on or after the effective date of the merger or consolidation,
shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holders
shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
holders shares. If such notice did not notify stockholders
of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of
such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or
(ii) the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10 days
after such effective date; provided, however, that if such
second notice is sent more than 20 days following the
sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and
who has demanded appraisal of such holders shares in
accordance with this subsection. An affidavit of the secretary
or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who
C-2
is otherwise entitled to appraisal rights, may commence an
appraisal proceeding by filing a petition in the Court of
Chancery demanding a determination of the value of the stock of
all such stockholders. Notwithstanding the foregoing, at any
time within 60 days after the effective date of the merger
or consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a) and (d) of
this section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of
C-3
stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
C-4
DYNAMEX INC.
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Using a black ink pen, mark your
votes with an X as shown
in
this example. Please do not
write outside the designated areas.
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x |
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote
your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on XXXXXX XX, 20XX.
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Vote by Internet
Log on to the Internet and go to www.investorvote.com/DDMX
Follow the steps outlined on the secured website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the USA,
US TERRITORIES & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call.
Follow the instructions provided by the recorded message. |
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Special Meeting Proxy Card |
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IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
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A
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Proposals The board of Directors recommends a vote FOR Proposals 1 and 2. |
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For |
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Against |
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Abstain |
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+ |
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1. To adopt the Agreement and Plan
of Merger, dated as of December 14, 2010, as it may be amended from
time to time, by and among Dynamex Inc., TransForce Inc., and
TransForce Acquisition Corp.
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2. To approve any adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if
there are insufficient votes at the time of the special meeting to
approve the proposal to adopt the Agreement and Plan of Merger.
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NOTE: The shares represented by this proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
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Change of Address Please print your new address below. |
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Comments Please print your comments below. |
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Meeting Attendance |
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Mark the box to the right
if you plan to attend
the Special Meeting.
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and
Sign Below |
Please sign exactly as names(s) appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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Date
(mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box. |
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▼ IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
Proxy DYNAMEX INC.
5429 LBJ Freeway, Suite 1000, Dallas, Texas 75240
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON [ , 20 ]
The stockholder(s) hereby appoints James Welch and Wayne Kern, and each of them, with full
power of substitution, proxies of the stockholder(s), to represent the stockholder(s) and to vote,
as specified on the reverse side, all shares of common stock of Dynamex Inc. held of record by the
stockholder(s)
as of [ , 20 ] at the special meeting of stockholders of Dynamex Inc. to be held on [ , 20 ] at
[__] a.m., local time, at the offices of Dynamex
Inc., 5429 LBJ Freeway, Suite 900, Dallas, Texas, and at any postponement or adjournment thereof,
upon the matters listed on the reverse side, all as more fully described in the proxy statement
for the special meeting (receipt of which the stockholder(s) hereby acknowledge), and, in the
discretion of the proxies, on any other matters as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. ANY AND ALL PROXIES HERETOFORE GIVEN ARE HEREBY REVOKED.
(Continued and to be marked, signed and dated on the reverse side.)