Yesterday, USA Truck and Knight Transportation announced the two have entered into a settlement agreement, dismissing “all claims between the two parties arising from the litigation it filed against Knight on October 10, 2013.”
In a press release, USA Truck and Knight said they have entered into a “standstill agreement” which is effective until September 30, 2014.
As per the agreement, Knight will not acquire any of USA Truck’s assets or securities, nor will it propose any offers to acquire, solicit or seek representation against USA Truck during the duration of the standstill agreement.
In addition, “Knight Transportation has agreed not to vote theUSA Truck shares it beneficially owns at the Company’s 2014 shareholder meeting.”
In October, USA Truck filed a beach of contract lawsuit against Knight Transportation for, “improperly using USA Truck’s confidential information to begin a creeping hostile acquisition of USA Truck at a price that the Board has unanimously concluded does not reflect the Company’s full intrinsic value.”
The lawsuit stems form Knight Transportation’s attempt to purchase USA Truck for $9.00 per share last month, an offer USA Truck refused.
The lawsuit was filed in the Circuit Court of Crawford County, in Van Buren, Arkansas. It alleges “Knight Transportation’s actions, including its purchasing shares of USA Truck stock using USA Truck’s confidential information and its disclosure of the prior discussions with USA Truck, are blatant violations of the Confidentiality Agreement between the parties and have disadvantaged the Company’s other stockholders.”
The lawsuit goes on to state that Knight Transportation’s recent statements to the public made it clear that Knight Transportation plans to “further violate the Confidentiality Agreement by using such confidential information to pursue a hostile takeover of USATruck without negotiating with USA Truck’s Board of Directors.”
USA Truck says the company filed the lawsuit to provide that the company can consider any proposed sale without the threat imposed by Knight Transportation’s share acquisition.
USA Truck issued the following statement regarding the settlement:
We are pleased that the parties have reached a settlement. USA Truck’s management team and employees have been focused on executing plans to restore the Company’s profitability and unlock its earnings leverage potential through improved operational excellence, profitable revenue growth and cost effectiveness. Nevertheless, by eliminating any of the distractions that have been created by this litigation, the settlement is a positive outcome for USA Truck’s employees, customers and shareholders.
In conjunction with the settlement, USA Truck and Knight Transportation will file a joint stipulation to dismiss the lawsuit in its entirety with prejudice.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally may be identified by their use of terms or phrases such as “expects,” “estimates,” “anticipates,” “projects,” “believes,” “plans,” “goals,” “intends,” “may,” “will,” “should,” “could,” “potential,” “continue,” “future” and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements, including risks and uncertainties associated with the unsolicited proposal from Knight Transportation, Inc. to acquire all of the Company’s shares and the settlement of related litigation, the impact of the pendency of that proposal or the settlement of litigation on the Company’s relationships with its employees, customers and vendors, and the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release might not occur.
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