USA Truck and Knight Transportation have entered into a settlement agreement that dismisses all claims between the two parties arising from litigation filed last fall.
In connection with the settlement, Van Buren-based USA Truck and Phoenix-based Knight Transportation have entered into a "standstill agreement" and a "voting agreement" effective through Sept. 30. Knight Transportation has agreed not to vote the USA Truck shares it beneficially owns at the company's 2014 shareholder meeting in May.
USA Truck filed the breach of contract lawsuit in October, claiming Knight used confidential information to disrupt USA Truck's turnaround plan in hopes of forcing USA Truck to sell the company for less than its full value.
Last fall, USA Truck turned down an unsolicited buyout offer from Knight of $242 million, at $9 a share.
The October lawsuit also sought a temporary restraining order to prevent Knight Transportation's continued purchase of USA Truck stock. An expedited trial was requested for mid-April to keep Knight from voting in the May shareholder meeting.
October filings by Knight with the Security and Exchange Commission show it owned 12.4 percent of outstanding USA Truck stock and was the largest single shareholder of USA Truck stock. It September it owned 7.9 percent. Knight acknowledged a confidentiality agreement existed but denied it was violating the agreement or was attempting a hostile takeover.
USA Truck had experienced three years of losses and instituted a turnaround strategy with John Simone as president and CEO last February. In October, the Van Buren trucking company reported its third consecutive quarter with narrower losses, showing signs of improvement on revenue.
USA Truck says its 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."
In conjunction with the settlement, USA Truck and Knight Transportation will file a joint stipulation to dismiss the lawsuit in its entirety with prejudice.
"We are pleased that the parties have reached a settlement," a USA Truck news release states.
Knight Transportation has agreed to "not acquire any securities or assets of USA Truck, propose any tender or exchange offer to acquire USA Truck securities, or any consent solicitation, or seek representation on the USA Truck board of directors."
"Our agreement with USA Truck represents a positive outcome for our company, as it resolves all related litigation while preserving our flexibility with respect to our investment," Kevin Knight, chairman and chief executive officer of Knight, stated in a news release.
USA Truck stock closed Tuesday at $13.58 a share, and closed trading Wednesday at $13.81, up 1.69 percent.
Copyright 2014 - Times Record, Fort Smith, Ark.
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