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By Telephone
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By Internet
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By Mail
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| | | | | A-1 | | | |
| | | | | B-1 | | | |
| ANNEX C Appraisal Rights Provisions of the Delaware General Corporation Law. | | | | | C-1 | | |
| | |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| |
2025
|
| |||||||||||||||
Adjusted Gross Profit(2)
|
| | | $ | 516 | | | | | $ | 489 | | | | | $ | 520 | | | | | $ | 554 | | | | | $ | 592 | | |
Adjusted EBITDA(3)
|
| | | $ | 124 | | | | | $ | 113 | | | | | $ | 123 | | | | | $ | 140 | | | | | $ | 158 | | |
Adjusted EBITDA less Capital Expenditures(4)
|
| | | $ | 96 | | | | | $ | 83 | | | | | $ | 91 | | | | | $ | 105 | | | | | $ | 121 | | |
Earnings Per Share(5)
|
| | | $ | 2.73 | | | | | $ | 2.37 | | | | | $ | 2.54 | | | | | $ | 2.89 | | | | | $ | 3.25 | | |
| | |
Implied Value Per Share Range
for the Company |
| |||
December 31, 2022E Price / NTM EPS
|
| | | $ | 31.50 – $36.25 | | |
December 31, 2023E Price / NTM EPS
|
| | | $ | 33.25 – $38.00 | | |
| | |
CY2022E
Price / EPS Multiple |
| |
CY2022E
AV / EBITDA Multiple |
| ||||||
The Company
|
| | | | 13.6x | | | | | | 8.0x | | |
CHRW
|
| | | | 17.1x | | | | | | 12.9x | | |
JBHTS
|
| | | | 22.9x | | | | | | 11.3x | | |
Landstar
|
| | | | 19.2x | | | | | | 13.2x | | |
Forward Air
|
| | | | 18.2x | | | | | | 11.2x | | |
Hub Group
|
| | | | 15.6x | | | | | | 6.9x | | |
| | |
Selected Comparable
Company Multiple Range |
| |
Implied Value Per
Share Range the Company |
|
Consensus CY2022E EPS
|
| |
14.0x – 16.0x
|
| |
$33.00 – $37.75
|
|
Management CY2022E EPS
|
| |
14.0x – 16.0x
|
| |
$33.25 – $38.00
|
|
Consensus CY2022E EBITDA
|
| |
8.5x – 9.5x
|
| |
$34.00 – $38.25
|
|
Management CY2022E EBITDA
|
| |
8.5x – 9.5x
|
| |
$33.50 – $37.50
|
|
| | |
Selected Precedent
Transaction Multiple |
| |
Implied Value
Per Share for the Company |
| ||||||
Acquisition of Freightquote by CHRW
|
| | | | 10.7x | | | | | $ | 42.75 | | |
Acquisition of Command Transportation by Echo
|
| | | | 11.4x | | | | | $ | 45.50 | | |
Name of Non-Employee Director
|
| |
No. of Restricted
Stock Units(1) |
| |
Value of Restricted Stock
Units upon Vesting ($)(2) |
| ||||||
Samuel K. Skinner
|
| | | | 5,385 | | | | | | 259,826 | | |
Matthew Ferguson
|
| | | | 5,385 | | | | | | 259,826 | | |
David Habiger
|
| | | | 5,385 | | | | | | 259,826 | | |
William M. Farrow III
|
| | | | 5,385 | | | | | | 259,826 | | |
Virginia L. Henkels
|
| | | | 5,385 | | | | | | 259,826 | | |
Named Executive Officer
|
| |
Golden Parachute Compensation
|
| |||||||||||||||||||||
|
Cash
($)(1) |
| |
Equity
($)(2) |
| |
Perquisites/Benefits
($)(3) |
| |
Total Value
($)(4) |
| ||||||||||||||
Douglas R. Waggoner
|
| | | | 6,035,516 | | | | | | 19,122,746 | | | | | | 20,910 | | | | | | 25,179,172 | | |
Peter M. Rogers
|
| | | | 1,912,500 | | | | | | 3,054,047 | | | | | | 10,455 | | | | | | 4,977,002 | | |
David B. Menzel
|
| | | | 3,397,843 | | | | | | 8,965,703 | | | | | | 20,910 | | | | | | 12,384,456 | | |
Named Executive Officer
|
| |
Cash Severance
($)(a) |
| |
2021 AIP Bonus
($)(b) |
| |
Total
($) |
| |||||||||
Douglas R. Waggoner
|
| | | | 4,308,541 | | | | | | 1,726,975 | | | | | | 6,035,516 | | |
Peter M. Rogers
|
| | | | 1,440,000 | | | | | | 472,500 | | | | | | 1,912,500 | | |
David B. Menzel
|
| | | | 2,543,818 | | | | | | 851,025 | | | | | | 3,394,843 | | |
Named Executive Officer
|
| |
Restricted
Stock Awards (Single Trigger) ($) |
| |
Restricted
Stock Units (Single Trigger) ($) |
| |
Performance
Share Awards (Double Trigger) ($) |
| |
Total
($) |
| ||||||||||||
Douglas R. Waggoner
|
| | | | 1,769,810 | | | | | | 4,277,186 | | | | | | 13,075,750 | | | | | | 19,122,746 | | |
Peter M. Rogers
|
| | | | 215,533 | | | | | | 1,416,104 | | | | | | 1,422,410 | | | | | | 3,054,047 | | |
David B. Menzel
|
| | | | 834,629 | | | | | | 1,999,271 | | | | | | 6,131,803 | | | | | | 8,965,703 | | |
| | |
Market Price
|
| |
Dividend
Declared |
| ||||||||||||
|
High
|
| |
Low
|
| ||||||||||||||
Fiscal 2018 | | | | | | | | | | | | | | | | | | | |
Second Quarter
|
| | | $ | 32.45 | | | | | $ | 25.35 | | | | | | N/A | | |
Third Quarter
|
| | | $ | 36.75 | | | | | $ | 28.70 | | | | | | N/A | | |
Fourth Quarter
|
| | | $ | 31.22 | | | | | $ | 18.83 | | | | | | N/A | | |
Fiscal 2019 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 25.91 | | | | | $ | 19.90 | | | | | | N/A | | |
Second Quarter
|
| | | $ | 25.95 | | | | | $ | 18.92 | | | | | | N/A | | |
Third Quarter
|
| | | $ | 23.74 | | | | | $ | 18.00 | | | | | | N/A | | |
Fourth Quarter
|
| | | $ | 24.50 | | | | | $ | 18.70 | | | | | | N/A | | |
Fiscal 2020 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 23.32 | | | | | $ | 14.17 | | | | | | N/A | | |
Second Quarter
|
| | | $ | 23.42 | | | | | $ | 14.33 | | | | | | N/A | | |
Third Quarter
|
| | | $ | 28.08 | | | | | $ | 21.28 | | | | | | N/A | | |
Fourth Quarter
|
| | | $ | 31.23 | | | | | $ | 25.20 | | | | | | N/A | | |
Fiscal 2021 | | | | | | | | | | | | | | | | | | | |
First Quarter
|
| | | $ | 34.61 | | | | | $ | 25.99 | | | | | | N/A | | |
Second Quarter
|
| | | $ | 37.65 | | | | | $ | 30.26 | | | | | | N/A | | |
Third Quarter
|
| | | $ | 48.26 | | | | | $ | 26.94 | | | | | | N/A | | |
Fourth Quarter (through October 20, 2021)
|
| | | $ | 48.14 | | | | | $ | 47.64 | | | | | | N/A | | |
| | |
Common Stock
|
| |||||||||
|
Number of Shares
Beneficially Owned |
| |
Percent of Class
|
| ||||||||
BlackRock, Inc.(1)
|
| | | | 5,106,760 | | | | | | 19.2% | | |
Dimensional Fund Advisors, L.P.(2)
|
| | | | 2,059,360 | | | | | | 7.7% | | |
The Vanguard Group, Inc.(3)
|
| | | | 1,875,587 | | | | | | 7.0% | | |
Douglas R. Waggoner
|
| | | | 268,887 | | | | | | 1.0% | | |
David B. Menzel
|
| | | | 103,381 | | | | | | * | | |
Peter M. Rogers
|
| | | | 17,579 | | | | | | * | | |
Samuel K. Skinner
|
| | | | 40,142 | | | | | | * | | |
Matthew Ferguson
|
| | | | 10,779 | | | | | | * | | |
David Habiger
|
| | | | 33,128 | | | | | | * | | |
William M Farrow III
|
| | | | 18,850 | | | | | | * | | |
Virginia L. Henkels
|
| | | | 13,339 | | | | | | * | | |
Current directors and executive officers as a group (8 persons)
|
| | | | 506,085 | | | | | | 1.9% | | |
|
ARTICLE I The Merger
|
| | |||||
| | | | | A-1 | | | |
| | | | | A-1 | | | |
| | | | | A-2 | | | |
| | | | | A-2 | | | |
| | | | | A-2 | | | |
| | | | | A-2 | | | |
|
ARTICLE II Effect of the Merger on Capital Stock
|
| | |||||
| | | | | A-2 | | | |
| | | | | A-3 | | | |
| | | | | A-5 | | | |
| | | | | A-5 | | | |
| | | | | A-5 | | | |
| | | | | A-6 | | | |
|
ARTICLE III Representations and Warranties
|
| | |||||
| | | | | A-6 | | | |
| | | | | A-21 | | | |
|
ARTICLE IV Covenants
|
| | |||||
| | | | | A-25 | | | |
| | | | | A-27 | | | |
| | | | | A-30 | | | |
| | | | | A-31 | | | |
| | | | | A-32 | | | |
| | | | | A-33 | | | |
| | | | | A-34 | | | |
| | | | | A-34 | | | |
| | | | | A-34 | | | |
| | | | | A-36 | | | |
| | | | | A-36 | | | |
| | | | | A-37 | | | |
| | | | | A-37 | | | |
| | | | | A-37 | | | |
| | | | | A-37 | | | |
| | | | | A-41 | | | |
| | | | | A-41 | | | |
| | | | | A-41 | | | |
| | | | | A-41 | | |
|
ARTICLE V Conditions
|
| | |||||
| | | | | A-42 | | | |
| | | | | A-42 | | | |
| | | | | A-43 | | | |
| | | | | A-43 | | | |
|
ARTICLE VI Termination
|
| | |||||
| | | | | A-43 | | | |
| | | | | A-43 | | | |
| | | | | A-44 | | | |
| | | | | A-44 | | | |
| | | | | A-44 | | | |
|
ARTICLE VII Miscellaneous
|
| | |||||
| | | | | A-46 | | | |
| | | | | A-47 | | | |
| | | | | A-47 | | | |
| | | | | A-47 | | | |
| | | | | A-47 | | | |
| | | | | A-48 | | | |
| | | | | A-49 | | | |
| | | | | A-49 | | | |
| | | | | A-50 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-52 | | | |
| | | | | A-54 | | | |
| | | | | A-58 | | |
Terms
|
| |
Page
|
|
2008 Plan
|
| |
11
|
|
Acceptable Confidentiality Agreement
|
| |
42
|
|
Acquisition Proposal
|
| |
45
|
|
Actions
|
| |
16
|
|
Affiliate
|
| |
10
|
|
Agreement
|
| |
1
|
|
Alternative Acquisition Agreement
|
| |
42
|
|
Alternative Financing
|
| |
56
|
|
Anti-Corruption Laws
|
| |
20
|
|
Applicable Date
|
| |
14
|
|
Bankruptcy and Equity Exception
|
| |
13
|
|
Benefit Plan
|
| |
17
|
|
Book-Entry Shares
|
| |
3
|
|
business day
|
| |
2
|
|
By-laws | | |
3
|
|
Capitalization Date
|
| |
11
|
|
Certificate of Merger
|
| |
2
|
|
Certificates
|
| |
3
|
|
Change
|
| |
9
|
|
Change of Recommendation
|
| |
42
|
|
Charter
|
| |
2
|
|
Claim
|
| |
36
|
|
Closing
|
| |
2
|
|
Closing Date
|
| |
2
|
|
Code
|
| |
17
|
|
Collection Costs
|
| |
67
|
|
Commitment Letters
|
| |
34, 57
|
|
Company
|
| |
1
|
|
Company AIP
|
| |
51
|
|
Company Approvals
|
| |
13
|
|
Company Board
|
| |
1
|
|
Company Disclosure Letter
|
| |
8
|
|
Company Intellectual Property
|
| |
26
|
|
Company Material Adverse Change
|
| |
9
|
|
Company Material Contracts
|
| |
30
|
|
Company Non-Recourse Parties
|
| |
65
|
|
Company Qualifying Transaction
|
| |
64
|
|
Company Recommendation
|
| |
1
|
|
Company Reports
|
| |
14
|
|
Company Requisite Vote
|
| |
12
|
|
Terms
|
| |
Page
|
|
Company Securities
|
| |
12
|
|
Company Termination Fee
|
| |
65
|
|
Confidentiality Agreement
|
| |
71
|
|
Continuing Employees
|
| |
50
|
|
Contract
|
| |
14
|
|
Corporate Bonus Plan
|
| |
52
|
|
COVID-19
|
| |
10
|
|
COVID-19 Measures
|
| |
10
|
|
D&O Insurance
|
| |
53
|
|
Debt
|
| |
36
|
|
Debt Commitment Letter
|
| |
33, 57
|
|
Debt Financing
|
| |
33, 57
|
|
DGCL
|
| |
2
|
|
Dissenting Shares
|
| |
4
|
|
Effective Time
|
| |
2
|
|
Environmental Law
|
| |
22
|
|
Equity Commitment Letter
|
| |
33
|
|
Equity Financing
|
| |
34
|
|
ERISA
|
| |
17
|
|
Exchange Act
|
| |
9
|
|
Exchange Fund
|
| |
4
|
|
Excluded Share
|
| |
3
|
|
Excluded Shares
|
| |
3
|
|
Ex-Im Laws
|
| |
21
|
|
FCPA
|
| |
20
|
|
Financing
|
| |
34, 57
|
|
Financing Commitments
|
| |
34
|
|
Financing Sources
|
| |
58
|
|
GAAP
|
| |
15
|
|
Government Antitrust Entity
|
| |
48
|
|
Governmental Entity
|
| |
6
|
|
Governmental Order
|
| |
10
|
|
Guarantee
|
| |
1
|
|
Guarantor
|
| |
1
|
|
Hazardous Substance
|
| |
22
|
|
HSR Act
|
| |
13
|
|
Indemnified Parties
|
| |
53
|
|
Indemnified Party
|
| |
53
|
|
Insurance Policies
|
| |
28
|
|
Intellectual Property
|
| |
28
|
|
Intervening Event
|
| |
45
|
|
Investors
|
| |
34
|
|
IRS
|
| |
17
|
|
Terms
|
| |
Page
|
|
ITAR
|
| |
21
|
|
Knowledge
|
| |
16, 33
|
|
Labor Agreement
|
| |
29
|
|
Laws
|
| |
19
|
|
Leased Real Property
|
| |
30
|
|
Leases
|
| |
30
|
|
Lenders
|
| |
33
|
|
Licenses
|
| |
19
|
|
Lien
|
| |
11
|
|
Merger
|
| |
1
|
|
Merger Sub
|
| |
1
|
|
NASDAQ
|
| |
13
|
|
OFAC
|
| |
20
|
|
Order
|
| |
60
|
|
Outside Date
|
| |
62
|
|
Parent
|
| |
1
|
|
Parent Approvals
|
| |
32
|
|
Parent Benefit Plans
|
| |
51
|
|
Parent Disclosure Letter
|
| |
31
|
|
Parent Non-Recourse Parties
|
| |
65
|
|
Parent Termination Fee
|
| |
66
|
|
Paying Agent
|
| |
4
|
|
Pension Plan
|
| |
17
|
|
Per Share Merger Consideration
|
| |
3
|
|
Performance Share
|
| |
7
|
|
Permitted Tax Liens
|
| |
11
|
|
Person
|
| |
6
|
|
Present Fair Salable Value
|
| |
36
|
|
Protected Data
|
| |
27
|
|
Proxy Statement
|
| |
45
|
|
Representatives
|
| |
31
|
|
Required Financing Amount
|
| |
35
|
|
Restricted Share
|
| |
6
|
|
Restricted Stock Unit
|
| |
7
|
|
Sanctioned Country
|
| |
21
|
|
Sanctioned Person
|
| |
20
|
|
Sanctions Laws
|
| |
21
|
|
SEC
|
| |
14
|
|
Securities Act
|
| |
14
|
|
Share
|
| |
3
|
|
Shares
|
| |
3
|
|
Significant Subsidiary
|
| |
8
|
|
Solvency
|
| |
36
|
|
Terms
|
| |
Page
|
|
Solvent
|
| |
36
|
|
SOX
|
| |
14
|
|
Stock Plan
|
| |
11
|
|
Stockholder Litigation
|
| |
60
|
|
Stockholders Meeting
|
| |
46
|
|
Subsidiary
|
| |
8
|
|
Superior Proposal
|
| |
45
|
|
Surviving Corporation
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2
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Takeover Statute
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21
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Tax
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23
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Tax Authority
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24
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Tax Return
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23
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Taxes
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23
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Trade Control Laws
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20
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WARN Act
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24
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willful breach
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64
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| | | | Very truly yours, | |
| | | | MORGAN STANLEY & CO. LLC | |
| | | |
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By:
Kristin Healy Managing Director
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