Entry into a Material Definitive Agreement.
Treasury Equity Issuance
On June 30, 2020, YRC
Worldwide Inc. (the Company) entered into a Share Issuance Agreement (the Share Issuance Agreement) with the United States Department of the Treasury (the UST), pursuant to which the Company has agreed to issue to
the UST 15,943,753 shares of common stock (the Treasury Equity and such issuance, the Treasury Equity Issuance) in consideration for entry into certain loan agreements with the UST (the UST loan agreements). The
Treasury Equity will be issued without stockholder approval in reliance on The Nasdaq Stock Market LLC Rule 5636T (the Temporary COVID-19 Exception) representing approximately 29.6% of the fully
diluted common stock outstanding on a pro forma basis reflecting the US Treasury Equity Issuance. Stockholder approval would ordinarily be required under the Nasdaq rules but for the fact that the Company is relying on this temporary exception to
stockholder approval, which has been approved by the Nasdaq Listing Qualifications Department. The Audit & Ethics Committee of the Board of Directors of the Company, which is comprised solely of independent, disinterested directors,
expressly approved the Companys reliance on the Temporary COVID-19 Exception and determined that the transaction is in the best interest of the Companys stockholders. The Treasury Equity represents
restricted securities, as defined in Rule 144, promulgated under the Securities Act of 1933, as amended, and will be sold without registration thereunder in reliance on the exemption from registration afforded by Section 4(a)(2)
The consummation of the Treasury Equity Issuance is conditioned upon, among other things, the execution of the UST loan agreements and the
funding of at least $50 million thereunder.
There is no assurance that the proposed Treasury Equity Issuance will be completed on the terms
described herein or at all or when it may be completed. The UST loan agreements are still being negotiated and the terms thereof have not been finalized at this time. There can be no assurance that such financing will be completed, if it all, or
when it may be completed.
A copy of the Share Issuance Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The
foregoing description of the Share Issuance Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Share Issuance Agreement.
Voting Trust Agreement
The Share Issuance Agreement
contemplates that, among other things, the Treasury Equity will be delivered to a voting trust (the Voting Trust) for the benefit of the UST pursuant to a voting trust agreement (the Voting Trust Agreement). The Voting Trust
Agreement will provide that (a) subject to certain exceptions, all shares of the Companys common stock beneficially owned by the UST shall be voted in the same proportion as all other shares of the Companys common stock are voted (other
than any shares voted by or at the direction of any beneficial owner of more than 10% of the common stock) with respect to all matters to come before the Companys stockholders; (b) prior to one year after the date of the Voting Trust
Agreement, the trustee may not transfer any Treasury Equity to any person, except (i) with the Companys prior written consent (not to be unreasonably withheld, conditioned or delayed), (ii) in connection with a transaction previously approved
by Companys stockholders or (iii) to any other United States federal governmental authority that agrees, as a condition to the effectiveness of such transfer, to be bound by all of the terms and conditions of the Voting Trust Agreement; and
(d) after the one-year date of the Voting Trust Agreement, the trustee may not transfer any Treasury Equity to any person, except (i) to any person that, following such transfer, would beneficially own no more than 19.99% of the shares of the
Companys common stock (subject to certain exceptions), (ii) to any person as previously approved by the Companys stockholders or (iii) to any other United States federal governmental authority that agrees, as a condition to the
effectiveness of such transfer, to be bound by all of the terms and conditions of the Voting Trust Agreement.
Registration Rights Agreement
The Share Issuance Agreement contemplates that, among other things, the company will enter into a registration rights agreement (the Registration Rights
Agreement) with the UST, which will provide registration rights with respect to the Treasury Equity.