DEFM14A 1 tm212871-2_defm14a.htm DEFM14A tm212871-2_defm14a - block - 19.8594779s
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
Filed by the Registrant ☒    Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12
SPORTSMAN’S WAREHOUSE HOLDINGS, 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):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
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):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:

Fee paid previously with preliminary materials.

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.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:

 
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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
1475 WEST 9000 SOUTH, SUITE A
WEST JORDAN, UT 84088

Telephone: (801) 566-6681
February 16, 2021
Dear Fellow Stockholder,
You are cordially invited to attend a special meeting of stockholders of Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (which we refer to as “Sportsman’s Warehouse,” “we” or “us”) that will be held on March 23, 2021 at 10:00 a.m. Mountain Time. In light of the COVID-19 pandemic and the protocols that federal, state and local governments are currently imposing, and out of an abundance of caution and appreciation for the well-being of our stockholders, we have determined that the special meeting will be a virtual meeting of stockholders conducted via live audiocast on the Internet. You may register to listen to and participate in the special meeting by going to register.proxypush.com/spwh and following the instructions provided for registration by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting. You will not be able to attend the special meeting physically in person. For purposes of attendance at the special meeting, all references herein to “present in person” or “in person” shall mean virtually present at the special meeting.
At the special meeting, you will be asked to consider and vote upon (i) a proposal to adopt and approve the Agreement and Plan of Merger, dated December 21, 2020, by and among Great Outdoors Group, LLC (which we refer to as “Great Outdoors Group”), a wholly-owned subsidiary of Great Outdoors Group, Phoenix Merger Sub I, Inc. (which we refer to as “Merger Sub”), and Sportsman’s Warehouse, as amended from time to time (which we refer to as the “merger agreement”), pursuant to which Merger Sub would be merged with and into Sportsman’s Warehouse (which we refer to as the “merger”), with Sportsman’s Warehouse continuing as the surviving corporation in the merger and a wholly-owned subsidiary of Great Outdoors Group, (ii) a non-binding, advisory proposal to approve specified compensation that may be paid or may become payable to Sportsman’s Warehouse’s named executive officers based on or otherwise relating to the merger, and (iii) a proposal to adjourn the special meeting from time to time to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting (or any adjournment thereof) to adopt and approve the merger agreement.
If the merger is completed following the satisfaction or waiver of the conditions set forth in the merger agreement, holders of shares of Sportsman’s Warehouse common stock, par value $0.01 per share (which we refer to as our “common stock”) as of immediately prior to the effective time of the merger (other than our common stock held by (i) Great Outdoors Group, Merger Sub or any other subsidiary of Great Outdoors Group, (ii) Sportsman’s Warehouse or any of its subsidiaries as treasury stock, or (iii) stockholders of Sportsman’s Warehouse who do not vote in favor of the proposal to adopt and approve the merger agreement (either in person or by proxy) and who properly demand appraisal of their shares of our common stock and otherwise comply with the requirements for perfecting and preserving appraisal rights set forth in Section 262 of the Delaware General Corporation Law, as amended) will be entitled to receive $18.00 in cash, without interest and less applicable withholding taxes, for each share of our common stock they own.
After careful consideration, our board of directors (which we refer to as the “Board”) has unanimously (i) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sportsman’s Warehouse’s stockholders, (ii) approved and declared advisable the merger agreement and the transactions contemplated thereby, (iii) directed that the merger agreement be submitted to
 

 
Sportsman’s Warehouse’s stockholders to be adopted and approved, and (iv) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders. Accordingly, the Board unanimously recommends that our stockholders vote “FOR” the adoption and approval of the merger agreement; “FOR” the non-binding, advisory proposal to approve specified compensation that may be paid or may become payable to Sportsman’s Warehouse’s named executive officers based on or otherwise relating to the merger; and “FOR” the adjournment of the special meeting from time to time to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting (or any adjournment thereof) to adopt and approve the merger agreement.
The accompanying proxy statement provides 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. The proxy statement also describes the actions and determinations of the Board in connection with its evaluation of the merger agreement and the merger. We encourage you to read the proxy statement and its annexes, including the merger agreement, carefully and in their entirety.
Whether or not you plan to be virtually present at the special meeting, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid envelope or follow the instructions set forth on the proxy card and the accompanying proxy statement to grant your proxy electronically over the Internet or by telephone. If you hold your shares in street name, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee. Your broker, bank or other nominee cannot vote on any of the proposals at the special meeting, including the proposal to adopt and approve the merger agreement, without your instructions.
Your vote is very important. The merger cannot be completed unless the proposal to adopt and approve the merger agreement is approved by the affirmative vote of holders of a majority of the outstanding shares of our common stock entitled to vote thereon. Therefore, if you (i) do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock, (ii) abstain from voting, or (iii) if you hold your shares in street name, fail to instruct your broker, bank or other nominee how to vote your shares on the proposal to adopt and approve the merger agreement, it will have the same effect as a vote “AGAINST” the proposal to adopt and approve the merger agreement. Therefore, please submit your proxy or voting instruction form as soon as possible to ensure your shares are represented and voted at the special meeting.
If you have any questions or need assistance voting your shares, please contact our proxy solicitor:
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90 Park Avenue
New York, NY 10016
Banks and Brokers Call: 1 (516) 220-8356
All Others Call Toll-free: 1 (833) 503-4127
Email: gerard.comer@equiniti.com
On behalf of the Board, thank you for your continued support.
Sincerely,
[MISSING IMAGE: sg_jonbarker-bw.jpg]
Jon Barker
President and Chief Executive Officer
The accompanying proxy statement is dated February 16, 2021, and is first being mailed to Sportsman’s Warehouse’s stockholders of record on or about February 18, 2021.
 

 
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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
1475 WEST 9000 SOUTH, SUITE A
WEST JORDAN, UT 84088
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on March 23, 2021
To Our Fellow Stockholders:
Notice is hereby given that a special meeting of stockholders of Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (which we refer to as “Sportsman’s Warehouse,” “we” or “us”) will be held on March 23, 2021 at 10:00 a.m. Mountain Time, via live audiocast on the Internet, for the following purposes:
1.
To consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated December 21, 2020, by and among Great Outdoors Group, LLC (which we refer to as “Great Outdoors Group”), a wholly-owned subsidiary of Great Outdoors Group, Phoenix Merger Sub I, Inc. (which we refer to as “Merger Sub”), and Sportsman’s Warehouse, as amended from time to time (which we refer to as the “merger agreement”), pursuant to which Merger Sub will be merged with and into Sportsman’s Warehouse (which we refer to as the “merger”), with Sportsman’s Warehouse continuing as the surviving corporation in the merger and a wholly-owned subsidiary of Great Outdoors Group (which we refer to as the “merger proposal”).
2.
To consider and vote on a non-binding, advisory proposal to approve specified compensation that may be paid or may become payable to Sportsman’s Warehouse’s named executive officers based on or otherwise relating to the merger (which we refer to as the “proposal to approve the merger-related executive compensation”).
3.
To consider and vote on a proposal to adjourn the special meeting from time to time to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting (or any adjournment thereof) to adopt and approve the merger agreement (which we refer to as the “adjournment proposal”).
You may register to listen to and participate in the special meeting via live audiocast on the Internet by going to register.proxypush.com/spwh and following the instructions provided for registration by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting. The accompanying proxy statement provides 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 proxy statement and its annexes, including the merger agreement, carefully and in their entirety.
Only holders of record of our common stock, par value $0.01 per share (which we refer to as our “common stock”), as of the close of business on January 29, 2021 are entitled to receive notice of, and to vote at, the special meeting and any adjournments or postponements thereof. You will be entitled to one vote for each share of our common stock that you held as of the close of business on January 29, 2021. A list of all stockholders entitled to vote at the special meeting will be available for examination at our principal executive offices at 1475 West 9000 South, Suite A, West Jordan, Utah, for ten days before the special meeting, and during the special meeting such list will be available for examination by following the link you will receive to virtually attend the special meeting after completing your registration.
 

 
YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. The merger cannot be completed unless the merger proposal is approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. Whether or not you plan to be virtually present at the special meeting, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or follow the instructions set forth on the proxy card and the accompanying proxy statement to grant your proxy electronically over the Internet or by telephone. If you hold your shares in street name, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee. Your broker, bank or other nominee cannot vote on any of the proposals at the special meeting, including the merger proposal, without your instructions.
The board of directors of Sportsman’s Warehouse (i) has unanimously (a) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sportsman’s Warehouse’s stockholders, (b) approved and declared advisable the merger agreement and the transactions contemplated thereby, (c) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (d) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders; and (ii) unanimously recommends that Sportsman’s Warehouse’s stockholders vote “FOR” the merger proposal; “FOR” the proposal to approve the merger-related executive compensation; and “FOR” the adjournment proposal.
By Order of the Board of Directors,
Robert K. Julian
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Chief Financial Officer and Secretary
Dated: February 16, 2021
 

 
TABLE OF CONTENTS
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SUMMARY
This summary, together with the following section entitled “Questions and Answers About The Special Meeting and The Merger,” highlights selected information in this proxy statement and does not contain all of 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 or incorporated by reference in this proxy statement for a more complete understanding of the matters being considered at the special meeting of Sportsman’s Warehouse’s stockholders. Each item in this summary includes a page reference directing you to a more complete description of that topic. This proxy statement is dated February 16, 2021, and is first being mailed to our stockholders of record on or about February 18, 2021.
In this proxy statement, the terms “Sportsman’s Warehouse,” “we,” “us” and “our” refer to Sportsman’s Warehouse Holdings, Inc. and, where appropriate, its subsidiaries. We also refer to Great Outdoors Group, LLC as “Great Outdoors Group” and Phoenix Merger Sub I, Inc. as “Merger Sub.” All references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of December 21, 2020, as it may be amended from time to time, by and among Sportsman’s Warehouse, Great Outdoors Group and Merger Sub, a copy of which is included as Annex A to this proxy statement, and all references to the “merger” refer to the merger of Merger Sub with and into Sportsman’s Warehouse pursuant to the merger agreement, with Sportsman’s Warehouse continuing as the surviving corporation and a wholly-owned subsidiary of Great Outdoors Group. Sportsman’s Warehouse, following the consummation of the merger, is sometimes referred to as the “surviving corporation.”
Parties to the Merger (Page 26)
Sportsman’s Warehouse Holdings, Inc., a Delaware corporation, is an outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant, and everyone in between. Sportsman’s Warehouse’s mission is to provide outstanding gear and exceptional service to inspire outdoor memories. Sportsman’s Warehouse strives to accomplish this goal by tailoring our broad and deep merchandise assortment to meet local conditions and demand, offering everyday low prices, providing friendly support from Sportsman’s Warehouse’s knowledgeable and highly-trained staff, and offering a top-tier e-commerce experience, extensive in-store events and educational programming. Sportsman’s Warehouse’s principal executive offices are located at 1475 West 9000 South, Suite A, West Jordan, Utah, 84088, and our telephone number is (801) 566-6681.
Sportsman’s Warehouse common stock, par value $0.01 per share (which we refer to as our “common stock”), is listed on the Nasdaq Global Select Market (which we refer to as “Nasdaq”) under the symbol “SPWH.” Additional information about Sportsman’s Warehouse can be found at www.sportsmans.com. The information provided on or accessible through Sportsman’s Warehouse’s website is not a part of or incorporated by reference in this proxy statement or any other report or document we file with or furnish to the Securities and Exchange Commission (which we refer to as the “SEC”).
Great Outdoors Group, LLC, a privately-held Delaware limited liability company, serves as the holding company for the operations of Bass Pro Shops, Cabela’s, White River Marine Group and a collection of nature-based resorts. Bass Pro Shops was founded in 1972 and is a leading national retailer of sporting and hunting gear and apparel. In 2017, Bass Pro Shops united with Cabela’s; together they operate 169 stores, and more than 500 million outdoors enthusiasts visit their websites annually. White River Marine Group is a manufacturer and retailer of recreational boats with industry-leading brands including Tracker Boats, Sun Tracker, Nitro, Tahoe, Regency, Mako, Ranger and Triton. Great Outdoors Group’s collection of nature-based resorts include Big Cedar Lodge, America’s premier wilderness resort, which welcomes more than one million guests annually to Missouri’s Ozark Mountains. Great Outdoors Group and its businesses employ over 30,000 team members. Great Outdoors Group’s principal executive offices are located at 2500 East Kearney, Springfield, Missouri 65898, and its telephone number is (417) 873-5000.
Phoenix Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of Great Outdoors Group, was incorporated for the sole purpose of consummating the transactions contemplated by the merger agreement. Prior to the effective time of the merger, Merger Sub will have engaged in no other business activities and will have incurred no liabilities or obligations, other than activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement. Upon
 
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the completion of the merger, Merger Sub will cease to exist and Sportsman’s Warehouse will continue as the surviving corporation. Merger Sub’s principal executive offices are located at 2500 East Kearney, Springfield, Missouri 65898, and its telephone number is (417) 873-5000.
The Special Meeting (Page 27)
Date, Time and Place of the Special Meeting (Page 27)
This proxy statement is being furnished to our stockholders of record as of the record date (as such term is defined below) as part of the solicitation of proxies by the board of directors of Sportsman’s Warehouse (which we refer to as the “Board”) for use at the special meeting to be held virtually on March 23, 2021 at 10:00 a.m. Mountain Time, via live audiocast on the Internet, or at any adjournment or postponement thereof. You may register to listen to and participate in the special meeting by going to register.proxypush.com/spwh and following the instructions provided for registration by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting. You will not be able to attend the special meeting physically in person. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.
The Purpose of the Special Meeting (Page 27)
At the special meeting, holders of our common stock will be asked to consider and vote on (i) a proposal to adopt and approve the merger agreement (which we refer to as the “merger proposal”), (ii) a non-binding, advisory proposal to approve specified compensation that may be paid or may become payable to Sportsman’s Warehouse’s named executive officers based on or otherwise relating to the merger (which we refer to as the “proposal to approve the merger-related executive compensation”), and (iii) a proposal to adjourn the special meeting from time to time to a later date or time, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting (or any adjournment thereof) to adopt and approve the merger agreement (which we refer to as the “adjournment proposal”).
The Board (i) has unanimously (a) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sportsman’s Warehouse’s stockholders, (b) approved and declared advisable the merger agreement and the transactions contemplated thereby, (c) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (d) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders; and (ii) unanimously recommends that Sportsman’s Warehouse’s stockholders vote “FOR” the merger proposal; “FOR” the proposal to approve the merger-related executive compensation; and “FOR” the adjournment proposal.
Record Date, Notice and Quorum (Page 27)
You are entitled to receive notice of, and to vote at, the special meeting if you held shares of our common stock at the close of business on January 29, 2021 (which the Board has set as the record date for the special meeting and which we refer to as the “record date”). As of the close of business on the record date, there were 43,648,226 shares of our common stock outstanding. The presence at the special meeting, in person or represented by proxy, of the holders of a majority of our common stock issued and outstanding and entitled to vote at the special meeting constitutes a quorum for the transaction of business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to solicit additional proxies as permitted by our Amended and Restated Bylaws (which we refer to as our “bylaws”). Abstentions will count as present and entitled to vote for purposes of determining the existence of a quorum. If you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares at the special meeting, your shares will not be counted for purposes of determining the existence of a quorum.
 
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Vote Required (Page 28)
Each holder of our common stock is entitled to one vote for each share of our common stock held on the record date.
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. Therefore, abstentions will have the same effect as a vote “AGAINST” the merger proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.
Approval of the proposal to approve the merger-related executive compensation and the adjournment proposal each require the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. Abstentions with respect to each of the proposal to approve the merger-related executive compensation and the adjournment proposal will have the same effect as a vote “AGAINST” such proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the proposal to approve the merger-related executive compensation or the adjournment proposal, your shares will not be voted at the special meeting and will not be counted in determining the outcome of the proposal to approve the merger-related executive compensation or the adjournment proposal. The completion of the merger is not conditioned upon the approval of the proposal to approve the merger-related executive compensation or the adjournment proposal.
As of the record date, the directors and executive officers of Sportsman’s Warehouse beneficially owned and were entitled to vote, in the aggregate, 397,488 (0.91%) shares of our common stock (not including any shares of our common stock deliverable upon settlement of any Sportsman’s Warehouse restricted stock unit awards). The directors and executive officers of Sportsman’s Warehouse have informed Sportsman’s Warehouse that they currently intend to vote all such shares of our common stock “FOR” approval of the merger proposal, “FOR” approval of the proposal to approve the merger-related executive compensation and “FOR” approval of the adjournment proposal.
Voting (Page 29)
All holders of shares of our common stock as of the close of business on the record date, including stockholders of record and stockholders who hold shares of our common stock in street name, may virtually attend the special meeting and vote their shares by pre-registering at the following website: register.proxypush.com/spwh. You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able to pre-register for the special meeting. Approximately one hour prior to the start time of the special meeting, all stockholders who have pre-registered by no later than 3:00 p.m. Mountain Time on March 19, 2021 will receive an email containing a unique Uniform Resource Locator (which we refer to as “URL”) link providing access to the special meeting, as well as a URL link providing ability to vote during the special meeting. Please note that if you hold your shares in street name, you may not vote your shares by virtually attending the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the special meeting. Once you have obtained the legal proxy, you must send a copy of the legal proxy to EQ Proxy Services via e-mail to EQSS-ProxyTabulation@equiniti.com by 11:59 p.m., Mountain Time, on March 22, 2021, the day before the special meeting.
If you hold your shares of common stock as a record holder, you may cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid envelope. You may also submit a proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. If you submit a proxy by Internet or telephone, you need not return a written proxy card by mail.
If you hold your shares of common stock in street name, you will receive instructions from your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will allow
 
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you to deliver your voting instructions over the Internet and may also permit you to provide your voting instructions by telephone. In addition, you may submit your voting instructions by completing, signing and dating the voting instruction form that was included with this proxy statement and returning it in the accompanying prepaid envelope. If you provide voting instructions by Internet or telephone, you need not return a written voting instruction form by mail.
If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:

delivering a later dated proxy card or submitting another proxy by telephone or the Internet as provided in the section entitled “The Special Meeting — Voting” beginning on page 29 (your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of Sportsman’s Warehouse at our principal executive offices a written notice of revocation prior to the voting of the proxy at the special meeting; or

by voting in person at the special meeting. However, attendance at the special meeting will not, by itself, revoke your proxy.
Written notices of revocation should be addressed to:
Sportsman’s Warehouse Holdings, Inc.
Attn: Secretary
1475 West 9000 South, Suite A
West Jordan, Utah 84088
Any change to your proxy that is provided by telephone or the Internet must be submitted before the commencement of the special meeting at 10:00 a.m. Mountain Time on March 23, 2021.
If your shares are held in street name, you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions.
The Merger (Page 33)
The merger agreement provides that, subject to the satisfaction or waiver of the conditions set forth therein, at the effective time of the merger, which we refer to as the “effective time,” Merger Sub will merge with and into Sportsman’s Warehouse. Sportsman’s Warehouse will be the surviving corporation following the merger. As a result of the merger, Sportsman’s Warehouse will cease to be a publicly traded company and will become a wholly-owned subsidiary of Great Outdoors Group. You will not own any shares of the capital stock of the surviving corporation after upon the completion of the merger.
Merger Consideration (Page 33)
At the effective time, each share of our common stock outstanding immediately prior to the effective time will automatically be canceled and converted into the right to receive an amount in cash equal to $18.00, without interest and less any applicable withholding taxes (which we refer to as the “merger consideration”), other than shares of our common stock held as of immediately prior to the effective time by (i) Great Outdoors Group, Merger Sub or any other subsidiaries of Great Outdoors Group, (ii) Sportsman’s Warehouse or any of its subsidiaries as treasury stock, or (iii) stockholders of Sportsman’s Warehouse who do not vote in favor of the merger proposal (either in person or by proxy) and who properly demand appraisal of their shares of our common stock and otherwise comply with the requirements for perfecting and preserving appraisal rights set forth in Section 262 of the Delaware General Corporation Law, as amended (which we refer to as the “DGCL”). We refer to the shares of our common stock held by the holders listed in clauses (i) and (ii) above, collectively as the “excluded shares”; and we refer to the shares of our common stock held by the holders listed in clause (iii) above as the “dissenting shares.” Dissenting shares will not be converted into the right to receive the merger consideration at the effective time, and the holders of such dissenting shares will only have the right to receive the “fair value” of their dissenting shares as of the effective time as determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration, if such stockholders follow exactly the procedures set forth in Section 262 of the DGCL. See “Appraisal Rights” beginning on page 103.
 
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Reasons for the Merger; Recommendation of the Board (Page 44)
After careful consideration of various factors as described in the section entitled “The Merger — Reasons for the Merger; Recommendation of the Board” beginning on page 44, the Board (i) has unanimously (a) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sportsman’s Warehouse’s stockholders, (b) approved and declared advisable the merger agreement and the transactions contemplated thereby, (c) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (d) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders; and (ii) unanimously recommends that Sportsman’s Warehouse’s stockholders vote “FOR” the merger proposal; “FOR” the proposal to approve the merger-related executive compensation; and “FOR” the adjournment proposal.
In considering the recommendation of the Board with respect to the merger proposal, you should be aware that our directors and executive officers may have interests in the merger that may be different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement, and in recommending that the merger agreement be adopted and approved by the stockholders of Sportsman’s Warehouse. See “The Merger — Interests of Certain Persons in the Merger” beginning on page 66.
Opinion of Robert W. Baird & Co. Incorporated (Page 57)
Sportsman’s Warehouse engaged Robert W. Baird & Co. Incorporated (which we refer to as “Baird”) to provide financial advice in connection with the proposed merger based on Baird’s qualifications, expertise, reputation and knowledge of Sportsman’s Warehouse’s business and the industries in which Sportsman’s Warehouse operates. At the December 21, 2020 meeting of the Board, representatives of Baird rendered Baird’s oral opinion, which was subsequently confirmed by delivery of a written opinion to the Board dated December 21, 2020, as to the fairness, as of such date, from a financial point of view, to the holders of our common stock (other than Great Outdoors Group and its affiliates or those holding excluded shares or dissenting shares) of the merger consideration to be received by such holders in the merger pursuant to the merger agreement, based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Baird in connection with the preparation of its opinion.
The full text of the written opinion of Baird, dated December 21, 2020, which sets forth, among other things, the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken, is attached as Annex B to this document. Baird provided its opinion for the information and assistance of the Board (in its capacity as such) in connection with, and for purposes of, its consideration of the merger, and its opinion only addresses whether the merger consideration to be received by the holders of our common stock (other than Great Outdoors Group and its affiliates or those holding excluded shares or dissenting shares) in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders. The opinion of Baird did not address any other term or aspect of the merger agreement or the merger. The Baird opinion does not constitute a recommendation to the Board or any holder of our common stock as to how the Board, such stockholder or any other person should vote or otherwise act with respect to the merger or any other matter.
Financing of the Merger (Page 64)
Great Outdoors Group expects to fund amounts needed to acquire Sportsman’s Warehouse under the merger agreement through a combination of available borrowings under its existing credit agreement and its cash and cash equivalents on hand at closing. Great Outdoors Group’s and Merger Sub’s obligations under the merger agreement are not subject to, or conditioned on, the receipt or availability of any funds or financing.
Interests of Certain Persons in the Merger (Page 66)
In considering the recommendation of the Board that you vote to approve the merger proposal, you should be aware that Sportsman’s Warehouse’s directors and executive officers may have interests in the
 
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merger that may be different from, in conflict with or in addition to, those of Sportsman’s Warehouse’s stockholders generally. Members of the Board were aware of and considered these interests, at the time, among other matters, in evaluating and negotiating the merger agreement and the merger, approving the merger agreement, and in recommending to Sportsman’s Warehouse stockholders that the merger agreement be adopted and approved.
Interests of Sportsman’s Warehouse’s directors and executive officers include, but are not limited to, the following:

Sportsman’s Warehouse restricted stock unit awards that are subject to time-vesting requirements (which we refer to as “RSUs”) and restricted stock unit awards that are subject to time- and performance-vesting requirements (which we refer to as “PSUs”) held by Sportsman’s Warehouse’s executive officers, and RSUs held by Sportsman’s Warehouse’s non-employee directors, immediately prior to the effective time will be treated in the same manner as those RSUs and PSUs held by other employees of Sportsman’s Warehouse;

The outstanding ESPP share purchase rights of Sportsman’s Warehouse’s executive officers under the Sportsman’s Warehouse employee stock purchase plan (which we refer to as the “ESPP”) will be treated in the same manner as outstanding ESPP share purchase rights held by other employees of Sportsman’s Warehouse;

Sportsman’s Warehouse’s Director Compensation Policy provides that in the event of a change in control of Sportsman’s Warehouse (such as the merger), non-employee directors will fully vest in all of their outstanding equity awards;

Each executive officer is party to an agreement with us (in Mr. Barker’s case, his employment agreement, and in Mr. Julian’s case, his severance agreement) that provides for certain severance benefits in the event the executive officer’s employment is terminated by Sportsman’s Warehouse other than due to “gross misconduct,” or by the executive officer for “good reason” ​(as such terms are defined in the respective agreements);

The Board approved Sportsman’s Warehouse reimbursing the executive officers for up to $35,000, in the aggregate, of legal fees that they may incur in connection with the review and negotiation of their employment arrangements in connection with the merger (no discussions between Great Outdoors Group and our executive officers regarding any potential changes to their employment arrangements in connection with the merger have taken place as of the date of this proxy statement);

Each executive officer was paid an annual performance bonus in December 2020 based on our compensation committee’s assessment of our performance for fiscal year 2020 relative to pre-established goals, as well as each executive’s individual performance; and

Sportsman’s Warehouse’s directors and officers will be entitled to certain ongoing indemnification, exculpation of liability and advancement rights as well as coverage under directors’ and officers’ liability policies.
For more information, see the sections entitled “The Merger — Background of the Merger” beginning on page 33 and “The Merger — Reasons for the Merger; Recommendation of the Board” beginning on page 44. These interests are described in more detail below, and certain of them are quantified in the narrative and in the section entitled “Proposal 2: Non-Binding, Advisory Vote on Merger-Related Compensation for Sportsman’s Warehouse’s Named Executive Officers — Golden Parachute Compensation” beginning on page 95.
Material U.S. Federal Income Tax Consequences of the Merger (Page 70)
The exchange of shares of our common stock for cash pursuant to the merger, generally, will be a taxable transaction to U.S. holders (as defined in the section entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” on page 70) for U.S. federal income tax purposes. Stockholders who are U.S. holders will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to their shares of our common stock pursuant to the merger and their adjusted tax basis in such shares. You should read “The Merger — Material U.S. Federal Income Tax
 
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Consequences of the Merger” beginning on page 70 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.
Regulatory Clearance (Page 71)
Sportsman’s Warehouse, Great Outdoors Group, and Merger Sub have agreed to cooperate and coordinate with each other and, subject to the terms and conditions of the merger agreement, use their respective reasonable best efforts to, among other matters, (i) prepare and file as promptly as practicable after the date of the merger agreement with any governmental authority all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, and (ii) obtain and maintain all approvals, consents, registrations, permits, authorizations, licenses, waivers and other confirmations required to be obtained from any governmental authority or any other third party that are necessary in connection with the consummation of the transactions contemplated by the merger agreement, including under applicable antitrust laws (as described more particularly in the section entitled “The Merger — Regulatory Clearance” beginning on page 71).
HSR Clearance.   Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the “HSR Act”), and related rules, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division of the Department of Justice (which we refer to as the “Antitrust Division”) and the United States Federal Trade Commission (which we refer to as the “FTC”) and all statutory waiting period requirements have been satisfied. The merger agreement requires the parties to make an appropriate filing of a notification and report form pursuant to the HSR Act as promptly as practicable after the date of the merger agreement (and in any event within ten business days after the date of the merger agreement). Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act.
On January 6, 2021, Sportsman’s Warehouse filed its notification of the proposed merger with the Antitrust Division and the FTC under the HSR Act. On January 6, 2021, Great Outdoors Group filed its notification of the proposed merger with the Antitrust Division and the FTC under the HSR Act.
On February 5, 2021, each of Sportsman's Warehouse and Great Outdoors Group received a request for additional information and documentary materials, commonly referred to as a “second request,” from the FTC pursuant to the HSR Act in connection with the merger. The FTC’s “second request” extends the applicable waiting period relating to the merger until 30 days after both Sportsman's Warehouse and Great Outdoors Group have complied with the “second request,” unless the waiting period is terminated earlier by the FTC or voluntarily extended by Sportsman's Warehouse and Great Outdoors Group. Sportsman's Warehouse and Great Outdoors Group will continue to cooperate with the FTC staff in its review of the merger.
The Merger Agreement (Page 73)
Treatment of Common Stock, Stock-Based Awards and Performance Awards (Page 74)

Common Stock.   Each share of our common stock outstanding immediately prior to the effective time (other than excluded shares and dissenting shares) will be canceled and converted into the right to receive $18.00 in cash, without interest and less any applicable withholding taxes.

RSU Awards.   At or immediately prior to the effective time, each Sportsman’s Warehouse RSU award that is outstanding immediately prior to the effective time will be canceled by virtue of the merger and without any action on the part of the holder thereof and converted into the right to receive (less applicable withholding taxes and without interest) an amount in cash equal to (i) the number of shares of our common stock subject to the Sportsman’s Warehouse RSU award immediately prior to the effective time multiplied by (ii) $18.00.

PSU Awards.   At or immediately prior to the effective time, each Sportsman’s Warehouse PSU award that is outstanding immediately prior to the effective time will be canceled by virtue of the merger and without any action on the part of the holder thereof and converted into the right to receive (less applicable withholding taxes and without interest) an amount in cash equal to (i) the number
 
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of shares of our common stock subject to the Sportsman’s Warehouse PSU award immediately prior to the effective time, as determined pursuant to the terms of the award and as outlined in the following paragraph, multiplied by (ii) $18.00.

Each outstanding Sportsman’s Warehouse PSU award covers three distinct performance periods (the Sportsman’s Warehouse fiscal years 2020, 2021 and 2022), with one-third of the total target number of PSUs subject to each award allocated to each of those three performance periods. Between 0% and 200% of the portion of the target number of PSUs allocated to any one of the individual performance periods may become eligible to vest based on performance during that performance period. If the effective time occurs on or before April 16, 2021, then the number of shares of our common stock subject to the Sportsman’s Warehouse PSU awards that are outstanding immediately prior to the effective time and that will be cashed out in accordance with the preceding paragraph will equal the sum of (i) 200% of the portion of the PSUs subject to the award corresponding to fiscal year 2020 (as the performance goals for that year were achieved at the applicable maximum levels), and (ii) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal years 2021 and 2022. If the effective time occurs after April 16, 2021 but on or before April 18, 2022, then the number of shares of our common stock subject to the Sportsman’s Warehouse PSU awards that are outstanding immediately prior to the effective time and that will be cashed out in accordance with the preceding paragraph will equal the sum of (i) 200% of the portion of the PSUs subject to the award corresponding to fiscal year 2020 (as the performance goals for that year were achieved at the applicable maximum levels), (ii) the greater of (a) the portion of the PSUs subject to the award corresponding to fiscal year 2021 that would vest assuming the 2021 performance year ended on the effective time and based on actual performance for that shortened period measured against pro-rated fiscal year 2021 performance goals, and (b) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal year 2021, and (iii) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal year 2022.

Treatment of Employee Stock Purchase Plan.   We caused the offering period under the ESPP in progress at the time of the execution of the merger agreement to be the final offering period under the ESPP. The termination date for such final offering under the ESPP was December 31, 2020 (which date we refer to as the “final ESPP purchase date”). On the final ESPP purchase date, the funds credited for each participant under the ESPP were used to purchase shares of our common stock in accordance with the terms of the ESPP. No new offering or purchase periods under the ESPP will commence after the final ESPP purchase date. The ESPP will be terminated as of the effective time.
Solicitation Period for Acquisition Proposals (Page 82)
During the period beginning on December 21, 2020 and ending at 11:59 p.m. New York City time on January 31, 2021 (such date, the “no-shop period start date” and such period, the “go-shop period”), Sportsman’s Warehouse, its subsidiaries and their respective Representatives (as such term is defined in the section entitled “The Merger Agreement — Solicitation Period for Acquisition Proposals” beginning on page 82) had the right to: (i) solicit, initiate, propose or induce the making, submission or announcement of, or encourage, facilitate or assist any proposal or offer that could constitute an acquisition proposal (as such term is defined in the section entitled “The Merger Agreement — No Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 83); (ii) provide information (including non-public information and data) relating to Sportsman’s Warehouse or any of its subsidiaries, and afford access to the business, properties, assets, books, records or other non-public information, or to any personnel, of Sportsman’s Warehouse or any of its subsidiaries to any person (including such person’s Representatives and potential financing sources), pursuant to an acceptable confidentiality agreement between Sportsman’s Warehouse and such person, provided, however, that Sportsman’s Warehouse also provided to Great Outdoors Group and Merger Sub any non-public information or data that was provided to any person given such access that was not previously provided or made available to Great Outdoors Group or Merger Sub, prior to or substantially concurrently with the time it was provided to such person; (iii) engage in, enter into, continue or otherwise participate in, any discussions or negotiations with any person (including such person’s Representatives and potential financing sources) with respect to any acquisition proposal (or any inquiries, proposals, offers or other efforts that would reasonably be expected to lead to an acquisition proposal); and (iv) cooperate with, assist or participate in, or facilitate any such inquiries, proposals, offers,
 
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discussions or negotiations or any effort or attempt to make any acquisition proposal. As promptly as reasonably practicable, and in any event within one business day after the no-shop period start date, Sportsman’s Warehouse agreed to deliver to Great Outdoors Group a written notice setting forth the identity of each person that made an acquisition proposal during the go-shop period that the Board has determined in good faith constitutes or would be reasonably expected to lead to a superior proposal to the merger (we refer to each such person as an “excluded party”). No acquisition proposals were made to Sportsman’s Warehouse during the go-shop period, and accordingly, there are no excluded parties.
No Solicitation of Acquisition Proposals; Board Recommendation Changes (Page 83)
During the period from the no-shop period start date (or, with respect to an excluded party, from 11:59 p.m. New York City time on February 20, 2021, which we refer to as the “cut-off time”) until the earlier of the effective time or the valid termination of the merger agreement pursuant to its terms, Sportsman’s Warehouse has agreed not to, has agreed to cause each of its subsidiaries’ and its and their respective officers and directors not to, and has agreed to instruct its and its subsidiaries’ other Representatives not to, directly or indirectly (i) solicit, initiate, knowingly encourage or knowingly facilitate any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal; or (ii) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any information in connection with, or for the purpose of knowingly encouraging or knowingly facilitating, any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to, an acquisition proposal. However, even after the no-shop period start date, Sportsman’s Warehouse is permitted to continue discussions with and provide non-public information to excluded parties (and their Representatives and potential financial sources), to the same extent as permitted during the go-shop period, including with respect to any amended or modified acquisition proposal submitted by an excluded party following the no-shop period start date, until approval of the merger proposal is obtained from Sportsman’s Warehouse’s stockholders.
Sportsman’s Warehouse further agreed that from December 21, 2020 until the earlier to occur of the effective time or the valid termination of the merger agreement pursuant to its terms, neither the Board nor any committee thereof will: (i) make an adverse recommendation change (as such term is defined in the section entitled “The Merger Agreement — No Solicitation of Acquisition Proposals; Board Recommendation Changes — Adverse Recommendation Change” beginning on page 85); or (ii) cause or direct Sportsman’s Warehouse or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, agreement, legally binding commitment, or agreement in principle with respect to, or that would reasonably be expected to lead to, any acquisition proposal (other than an acceptable confidentiality agreement entered into in accordance with the merger agreement).
However, prior to obtaining approval of the merger proposal from the stockholders of Sportsman’s Warehouse and subject to the satisfaction of certain conditions, Sportsman’s Warehouse and the Board, as applicable, are permitted to take certain actions which may, as more fully described in the merger agreement, include changing the Board recommendation following receipt of an acquisition proposal, if the Board has determined in good faith after consultation with its financial advisor and outside legal counsel and taking into account any revisions to the terms and conditions of the merger agreement proposed in writing by Great Outdoors Group and capable of being accepted by Sportsman’s Warehouse, that (x) such acquisition proposal constitutes a superior proposal to the merger and (y) failure to change the Board recommendation would reasonably be expected to result in a breach of the Board’s fiduciary duties under applicable law. In addition, the Board is permitted to change its recommendation, for reasons not related to the receipt of an acquisition proposal, if an intervening event occurs, and the Board has determined in good faith, after consultation with its financial advisor and outside legal counsel, that failure to do so would reasonably be expected to result in a breach of the Board’s fiduciary duties under applicable law.
Conditions to the Merger (Page 89)
The respective obligations of Sportsman’s Warehouse, Great Outdoors Group and Merger Sub to consummate the merger are subject to the satisfaction or waiver of certain customary conditions, including the adoption and approval of the merger agreement by our stockholders, receipt of antitrust clearance under the HSR Act, the absence of any order, injunction or judgment issued by any governmental authority
 
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of competent jurisdiction that enjoins or otherwise prohibits the consummation of the merger, the accuracy of the representations and warranties of the parties, compliance in all material respects by the parties with their respective obligations under the merger agreement, and the absence of a material adverse effect on Sportsman’s Warehouse following the date of the merger agreement. See “The Merger Agreement — Conditions to the Merger” beginning on page 89.
Termination (Page 90)
Sportsman’s Warehouse and Great Outdoors Group may, by mutual written agreement, terminate the merger agreement and abandon the merger at any time prior to the effective time.
The merger agreement may also be terminated and the merger may be abandoned at any time prior to the effective time, as follows (in each case, subject to certain conditions and as further described in the section entitled “The Merger Agreement — Termination” beginning on page 90):

by either Sportsman’s Warehouse or Great Outdoors Group, if:

the merger has not been consummated on or before September 17, 2021 (which date will be automatically extended for up to an additional 90 days if any applicable waiting period (and any extensions thereof) under the HSR Act relating to the merger has not expired or been terminated on or prior to September 17, 2021, and which we refer to as the “end date”), provided, that this right to terminate the merger agreement due to failure of the merger to be consummated on or before the end date will not be available to any party whose breach of any provision of the merger agreement primarily results in the failure of the merger to be consummated by the end date (with Great Outdoors Group and Merger Sub being deemed a single party for the purposes of the foregoing proviso);

any temporary restraining order, preliminary or permanent injunction or other judgment issued by any governmental authority of competent jurisdiction (which we refer to, collectively as “restraints”) is in effect permanently enjoining or otherwise permanently prohibiting the consummation of the merger, and such restraint has become final and non-appealable; provided, that this right to terminate the merger agreement due to any such restraint will not be available to any party whose breach of any provision of the merger agreement results in such restraint (which is referred to as a “restraint termination event”); or

at a meeting of the stockholders of Sportsman’s Warehouse called for the purpose of voting on the merger proposal (including any adjournment or postponement thereof), approval of the merger proposal is not obtained from the stockholders of Sportsman’s Warehouse upon a vote taken thereon;

by Great Outdoors Group, if:

prior to obtaining approval of the merger proposal from the stockholders of Sportsman’s Warehouse, the Board makes an adverse recommendation change (which is referred to as an “adverse recommendation change termination event”);

any member of the Board or any executive officer of Sportsman’s Warehouse, has breached, or has caused or directed Sportsman’s Warehouse, its subsidiaries or their respective Representatives to breach, in any material respect, certain no solicitation obligations under the provisions of the merger agreement described in the section entitled “The Merger Agreement — No Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 83, provided, that Great Outdoors Group will only be permitted to terminate the merger agreement in the event of such breach if Great Outdoors Group exercises such termination right no later than the earlier of (i) the date that is 10 days after Great Outdoors Group learns or is made aware of such breach, and (ii) the date immediately preceding the date that approval of the merger proposal is obtained from the stockholders of Sportsman’s Warehouse (which is referred to as a “no solicitation termination event”); or

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Sportsman’s Warehouse set forth in the merger agreement has occurred that would cause Sportsman’s Warehouse to fail to satisfy the applicable condition to closing of the merger related
 
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to performance of Sportsman’s Warehouse’s covenants and agreements or accuracy of representations and warranties by Sportsman’s Warehouse; provided, that, Great Outdoors Group may not terminate the merger agreement upon such breach or failure to perform (i) prior to the earlier of (a) 30 days following Sportsman’s Warehouse’s receipt of written notice of such breach or failure to perform from Great Outdoors Group and of Great Outdoors Group’s intention to terminate the merger agreement, and (b) the end date, it being understood that Great Outdoors Group may not terminate the merger agreement if such breach or failure to perform is cured, if capable of cure, prior to the end of the period described in this clause (i); or (ii) if Great Outdoors Group’s breach of any provision of the merger agreement would cause the applicable condition to the closing of the merger related to the performance of Great Outdoors Group’s covenants and agreements or accuracy of representations and warranties by Great Outdoors Group to not be satisfied;

by Sportsman’s Warehouse, if:

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Great Outdoors Group or Merger Sub has occurred that would cause Great Outdoors Group or Merger Sub to fail to satisfy the applicable condition to closing of the merger related to performance of Great Outdoors Group and Merger Sub’s covenants and agreements or accuracy of representations and warranties by Great Outdoors Group and Merger Sub; provided, that Sportsman’s Warehouse may not terminate the merger agreement upon such breach or failure to perform (i) prior to the earlier of (a) 30 days following Great Outdoors Group’s receipt of written notice of such breach or failure to perform from Sportsman’s Warehouse and of Sportsman’s Warehouse’s intention to terminate the merger agreement, and (b) the end date, it being understood that Sportsman’s Warehouse may not terminate the merger agreement if such breach or failure to perform is cured, if capable of cure, prior to the end of the period described in this clause (i); or (ii) if Sportsman’s Warehouse’s breach of any provision of the merger agreement would cause the applicable condition to the closing of the merger related to the performance of Sportsman’s Warehouse’s covenants and agreements or accuracy of representations and warranties by Sportsman’s Warehouse to not be satisfied; or

prior to obtaining approval of the merger proposal from the stockholders of Sportsman’s Warehouse, in order for Sportsman’s Warehouse to enter into any letter of intent, memorandum of understanding, agreement, legally binding commitment, or agreement in principle to effect a superior proposal, in accordance with, and subject to compliance with the terms and conditions of, the merger agreement; provided, that Sportsman’s Warehouse pays the applicable termination fee to Great Outdoors Group substantially concurrently with such termination, as described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 92 (which we refer to as the “superior proposal termination event”).
Termination Fees (Page 92)
In certain circumstances, Sportsman’s Warehouse or Great Outdoors Group may be required to pay the other party a termination fee if the merger agreement is terminated.
A termination fee in the amounts set forth below would be payable by Sportsman’s Warehouse if any of the following occur (in each case, subject to certain conditions and as further described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 92):

Sportsman’s Warehouse terminates the merger agreement pursuant to a superior proposal termination event, in which case Sportsman’s Warehouse must pay Great Outdoors Group (or its designees) a termination fee in the amount of $23,000,000 substantially concurrently with such termination, provided, that the termination fee payable by Sportsman’s Warehouse in the event of such termination would be $9,000,000 if such termination occurred prior to the no-shop period start date or with respect to a superior proposal made by an excluded party, prior to the cut-off time;

Great Outdoors Group terminates the merger agreement pursuant to an adverse recommendation change termination event or a no solicitation termination event, in which case Sportsman’s Warehouse
 
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must pay Great Outdoors Group (or its designee) a termination fee in the amount of $23,000,000 as promptly as reasonably practicable (and, in any event, within two business days after such termination); or

if (i) after December 21, 2020 and prior to obtaining approval of the merger proposal from the stockholders of Sportsman’s Warehouse, a bona fide acquisition proposal has been publicly made, publicly announced or otherwise communicated to the Board or to Sportsman’s Warehouse or has been made directly to the stockholders of Sportsman’s Warehouse generally (and in, any such case, such acquisition proposal is not withdrawn), (ii) thereafter, (a) either Great Outdoors Group or Sportsman’s Warehouse terminates the merger agreement for the failure of the merger to be consummated by the end date (at a time when Great Outdoors Group is also entitled to terminate the merger agreement for such failure) or for failure to obtain approval of the merger proposal from the stockholders of Sportsman’s Warehouse, or (b) Great Outdoors Group terminates the merger agreement pursuant to a no solicitation termination event, and (iii) within 12 months after such termination, Sportsman’s Warehouse consummates any acquisition proposal or enters into a definitive agreement in respect of any acquisition proposal that is later consummated (in each case, the references to “20%” in the definition of “acquisition proposal” being deemed to be references to “50%”); in which case Sportsman’s Warehouse must pay Great Outdoors Group a termination fee in the amount of $23,000,000 on the date of consummation of such acquisition proposal.
A termination fee would be payable by Great Outdoors Group in the following circumstances:

If the merger agreement is terminated by Great Outdoors Group or Sportsman’s Warehouse pursuant to any restraint termination event and if the applicable restraint is in connection with or pursuant to any antitrust law, Great Outdoors Group must pay Sportsman’s Warehouse a termination fee in the amount of $55,000,000 concurrently with such termination, in the case of a termination by Great Outdoors Group, or within two business days following such termination, in the case of a termination by Sportsman’s Warehouse; provided that no termination fee shall be payable by Great Outdoors Group if Sportsman’s Warehouse’s breach of the merger agreement resulted in such restraint; or

If (i) the merger agreement is terminated by Great Outdoors Group or Sportsman’s Warehouse for the failure of the merger to be consummated by the end date, and (ii) as of the time of the termination, either (a) a restraint remains in effect enjoining or otherwise prohibiting the consummation of the merger, or (b) any applicable waiting period (or extension thereof) under the HSR Act relating to the merger has not expired or been terminated (solely due to a restraint arising under, or an applicable law that is, an antitrust law), then Great Outdoors Group must pay Sportsman’s Warehouse a termination fee in the amount of $55,000,000 concurrently with such termination, in the case of a termination by Great Outdoors Group, or within two business days following such termination, in the case of a termination by Sportsman’s Warehouse; provided that no termination fee shall be payable if Sportsman’s Warehouse’s breach of the merger agreement resulted in the failure of the merger to be consummated by the end date.
Specific Performance (Page 94)
Pursuant to the merger agreement, Sportsman’s Warehouse, Great Outdoors Group and Merger Sub have agreed that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties do not perform their obligations under the merger agreement in accordance with its specified terms or otherwise breach such provisions. Sportsman’s Warehouse, Great Outdoors Group and Merger Sub have further agreed each party is entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement without proof of damages, in addition to any other remedy to which such parties are entitled under the merger agreement at law or in equity.
Market Price of Common Stock (Page 99)
Sportsman’s Warehouse’s common stock is listed on Nasdaq under the symbol “SPWH.” The closing price of our common stock on Nasdaq on December 21, 2020, the last trading day prior to the public
 
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announcement of the execution of the merger agreement, was $12.65 per share. On February 12, 2021, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price for our common stock on Nasdaq was $17.51 per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.
Appraisal Rights (Page 103)
If the merger is completed and subject to compliance with the requirements of Section 262 of the DGCL, Sportsman’s Warehouse’s stockholders who do not vote in favor of the merger proposal (either in person or by proxy) and meet all of the conditions set forth in Section 262 of the DGCL will have the right to seek appraisal of the fair value of their shares of our common stock as of the effective time determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration if such stockholders follow exactly the procedures set forth in Section 262 of the DGCL. 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 Sportsman’s Warehouse before the vote is taken on the merger proposal, you must not vote (either in person or by proxy) in favor of the merger proposal and you must continue to hold the shares of our common stock from the date of making the demand for appraisal through the effective time. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you may lose your appraisal rights. See “Appraisal Rights” beginning on page 103 and the text of Section 262 of the DGCL reproduced in its entirety as Annex C to this proxy statement. This proxy statement constitutes the notice of appraisal rights with respect to the merger proposal required by Section 262 of the DGCL. If you hold your shares of our common stock through a broker, bank or other nominee and you wish to exercise your appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your broker, bank or other nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly.
Delisting and Deregistration of Common Stock (Page 109)
If the merger is completed, our common stock will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), and we will no longer file periodic reports with the SEC.
 
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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 stockholder of Sportsman’s Warehouse. Please refer to the section entitled “Summary” beginning on page 1 and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. 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 110 or “Incorporation of Certain Information By Reference” beginning on page 110.
Q.
Why am I receiving this proxy statement?
A.
On December 21, 2020, Sportsman’s Warehouse entered into the merger agreement providing for the merger of Merger Sub with and into Sportsman’s Warehouse, with Sportsman’s Warehouse continuing as the surviving corporation in the merger and a wholly-owned subsidiary of Great Outdoors Group, subject to the satisfaction or waiver of certain conditions set forth in the merger agreement. You are receiving this proxy statement in connection with the solicitation of proxies in favor of the merger proposal and other proposals to be voted on at the special meeting because you have been identified as a holder of our common stock as of the close of business on the record date.
Q.
What is the proposed merger and what effects will it have on Sportsman’s Warehouse?
A.
The proposed merger is the acquisition of Sportsman’s Warehouse by Great Outdoors Group pursuant to the merger agreement, subject to the terms and conditions set forth therein. If the merger proposal 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 Sportsman’s Warehouse, with Sportsman’s Warehouse continuing as the surviving corporation and a wholly-owned subsidiary of Great Outdoors Group. We refer to this transaction as the merger. As a result of the merger, Sportsman’s Warehouse will no longer be a publicly traded corporation, and you, as a holder of our common stock, will no longer have any interest in our future earnings or growth. In addition, following the merger, our common stock will be delisted from Nasdaq and deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC on account of our common stock.
Q.
What will I receive if the merger is completed?
A.
Upon completion of the merger, you will be entitled to receive the merger consideration of $18.00 in cash, without interest and less any applicable withholding taxes, for each share of our common stock that you own immediately prior to the effective time, unless you do not vote in favor of the merger proposal (either in person or by proxy), properly demand appraisal of your shares of our common stock and otherwise comply with the requirements for perfecting and preserving appraisal rights set forth in Section 262 of the DGCL in which case you will only have the right to receive the fair value of your shares of our common stock as of the effective time as determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration, if you follow exactly the procedures set forth in Section 262 of the DGCL. For example, if you own 100 shares of our common stock, you will receive $1,800 in cash in exchange for your shares of our common stock, without interest and less any applicable withholding taxes. You will not own any shares of the capital stock in the surviving corporation. Please do NOT return any stock certificates you hold with your proxy.
Q.
When and where is the special meeting?
A.
The special meeting of stockholders of Sportsman’s Warehouse will be held on March 23, 2021 at 10:00 a.m. Mountain Time, via live audiocast on the Internet. You may register to listen to and participate in the special meeting by going to register.proxypush.com/spwh and following the instructions provided for registration by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting.
 
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Q.
What am I being asked to vote on at the special meeting?
A.
At the special meeting, holders of our common stock will be asked to consider and vote on the following three proposals:

the merger proposal;

the proposal to approve the merger-related executive compensation; and

the adjournment proposal.
Q.
How does the Board recommend that I vote?
A.
The Board recommends that you vote your shares of our common stock:

FOR” the merger proposal;

FOR” the proposal to approve the merger-related executive compensation; and

FOR” the adjournment proposal.
For a discussion of the factors that the Board considered in determining to approve the execution and delivery of the merger agreement by Sportsman’s Warehouse and to recommend, subject to certain provisions of the merger agreement, the adoption and approval of the merger agreement by stockholders of Sportsman’s Warehouse, please see the section entitled “The Merger — Reasons for the Merger; Recommendation of the Board” beginning on page 44. In considering the recommendation of the Board that you vote to adopt and approve the merger agreement, you should be aware that Sportsman’s Warehouse’s directors and executive officers may have interests in the merger that may be different from, or in addition to, those of Sportsman’s Warehouse stockholders generally. For a discussion of these interests, please see the section entitled “The Merger — Interests of Certain Persons in the Merger” beginning on page 66.
Q.
Who is entitled to vote at the special meeting?
A.
All holders of shares of our common stock as of the close of business on January 29, 2021, the record date, are entitled to vote at the special meeting. Each holder of our common stock is entitled to one vote for each share of our common stock held on the record date. As of the close of business on the record date, there were 43,648,226 shares of our common stock outstanding.
Q.
What is the difference between holding shares as a stockholder of record and in street name as a beneficial owner?
A.
Our stockholders may hold their shares of our common stock through a broker, bank or other nominee (that is, in “street name”) rather than directly in their own name. Summarized below are some of the differences between shares held of record and those owned beneficially in street name.

Stockholder of Record.   If your shares of our common stock are registered directly in your name with Sportsman’s Warehouse’s transfer agent, Equiniti Shareowner Services, you are considered, with respect to those shares, the stockholder of record, and this proxy statement was sent directly to you by Sportsman’s Warehouse. As the stockholder of record, you have the right to vote your shares of our common stock by virtually attending the special meeting or to grant your proxy directly to certain officers of Sportsman’s Warehouse to vote your shares at the special meeting.

Beneficial Owner.   If your shares of our common stock are held through a broker, bank or other nominee, you are considered the beneficial owner of shares held in street name, and this proxy statement was forwarded to you by your broker, bank or other nominee. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares on your behalf at the special meeting, or you may contact your broker, bank or other nominee to obtain a “legal proxy” giving you the right to vote by virtually attending the special meeting. Once you have obtained the legal proxy, you must send a copy of the legal proxy to EQ Proxy Services via e-mail to EQSS-ProxyTabulation@equiniti.com by 11:59 p.m., Mountain Time, on March 22, 2021, the day before the special meeting.
 
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Q.
What must I do if I want to attend the special meeting?
A.
We will be hosting the special meeting on the Internet via live audiocast. You will not be able to attend the special meeting physically in person. All holders of shares of our common stock as of the close of business on the record date, including stockholders of record and stockholders who hold our common stock through a broker, bank or other nominee, may register to listen to and participate in the special meeting via live audiocast on the Internet at register.proxypush.com/spwh. You must pre-register by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting.
You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able to pre-register. Please note that if you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote your shares at the special meeting. Please note that if you hold your shares in street name you will also need to submit a copy of a brokerage statement reflecting your stock ownership as of the record date.
The special meeting audiocast will begin at 10:00 a.m. Mountain Time. Stockholders may submit questions during the special meeting or while pre-registering for the special meeting at register.proxypush.com/spwh.
Q.
Why is the special meeting being held virtually?
A.
We are holding a virtual meeting in light of the COVID-19 pandemic and in order to maximize the number of our stockholders who can participate. Sportsman’s Warehouse stockholders will be afforded the same opportunities to participate at the virtual special meeting as they would at an in-person special meeting.
Q.
What happens if I experience technical difficulties during the special meeting?
A.
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be provided in the meeting access email that will be sent approximately one hour prior to the meeting.
Q.
How many shares need to be represented at the special meeting?
A.
The presence at the special meeting, in person or represented by proxy, of the holders of a majority of our common stock issued and outstanding and entitled to vote at the special meeting constitutes a quorum for the transaction of business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to solicit additional proxies as permitted by our bylaws. Abstentions will count as present and entitled to vote for purposes of determining the existence of a quorum. If you hold your shares of our common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares at the special meeting, your shares will not be counted for purposes of determining the existence of a quorum.
Q.
How do I vote?
A.
Voting at the Special Meeting
All holders of shares of our common stock as of the close of business on the record date, including stockholders of record and stockholders who hold shares of our common stock in street name, may attend the special meeting and vote their shares by pre-registering at the following website by no later than 3:00 p.m. Mountain Time on March 19, 2021: register.proxypush.com/spwh. You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able to pre-register. Approximately one hour prior to the start time of the special meeting, all stockholders who have pre-registered by no later than 3:00 p.m. Mountain Time on March 19,
 
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2021 will receive an email containing a unique URL link providing access to the special meeting, as well as a URL link providing ability to vote during the special meeting. Please note that if you hold your shares in street name, you may not vote your shares by virtually attending the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the special meeting. Once you have obtained the legal proxy, you must send a copy of the legal proxy to EQ Proxy Services via e-mail to EQSS-ProxyTabulation@equiniti.com by 11:59 p.m., Mountain Time, on March 22, 2021, the day before the special meeting.
Voting by Proxy

Submitting a Proxy for Shares Registered Directly in the Name of the Stockholder.   If you hold your shares of our common stock as a record holder, you may cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid envelope. You may also submit a proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. If you submit a proxy by Internet or telephone, you need not return a written proxy card by mail.

Submitting Voting Instructions for Shares Registered in Street Name.   If you hold your shares of our common stock in street name, you will receive instructions from your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to provide your voting instructions by telephone. In addition, you may submit your voting instructions by completing, signing and dating the voting instruction form that was included with this proxy statement and returning it in the accompanying prepaid envelope. If you provide voting instructions by Internet or telephone, you need not return a written voting instruction form by mail.
Q.
What is the deadline for voting?
A.
If you are a stockholder of record, your proxy must be received by telephone or Internet before the commencement of the special meeting at 10:00 a.m. Mountain Time on March 23, 2021, in order for your shares to be voted at the special meeting. If you are a stockholder of record and you cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card, your proxy card must be received before the special meeting for your shares to be voted at the special meeting.
If you hold your shares in street name, please comply with the deadlines for voting provided by the broker, bank or other nominee that holds your shares.
Q.
How can I change or revoke my vote?
A.
If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:

delivering a later dated proxy card or by submitting another proxy by telephone or the Internet (your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of Sportsman’s Warehouse at our principal executive offices a written notice of revocation prior to the voting of the proxy at the special meeting; or

by voting in person at the special meeting. Attendance at the special meeting will not, by itself, revoke your proxy.
Written notices of revocation should be addressed to:
Sportsman’s Warehouse Holdings, Inc.
Attn: Secretary
1475 West 9000 South, Suite A
West Jordan, Utah 84088
Any change to your proxy that is provided by telephone or the Internet must be submitted before the commencement of the special meeting at 10:00 a.m. Mountain Time on March 23, 2021.
 
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If your shares are held in street name, you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions.
Q.
What happens if I do not give specific voting instructions?
A.
If you are a stockholder of record and you properly submit a signed proxy card or submit your proxy by telephone or the Internet, but do not specify how you want to vote your shares on a particular proposal, then the named proxy holders will vote your shares in accordance with the recommendations of the Board on all matters presented in this proxy statement. See above under the heading “How does the Board recommend that I vote?”
In accordance with applicable stock exchange rules, if you hold your shares through a brokerage account and you fail to provide voting instructions to your broker, your broker may generally vote your uninstructed shares of our common stock in its discretion on routine matters at a stockholder meeting. However, a broker cannot vote shares of our common stock held in street name on non-routine matters unless the broker receives voting instructions from the stockholder. Generally, if a broker exercises this discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker, but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. All of the proposals to be voted on at the special meeting are non-routine matters. Accordingly, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on any of the proposals presented at the special meeting. As a result, we do not expect any broker non-votes at the special meeting.
Q.
What will happen if I abstain from voting or fail to vote on the proposals or fail to instruct my broker, bank or other nominee how to vote on the proposals?
A.
For the merger proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as a vote “AGAINST” the merger proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of our common stock or if you hold your shares of our common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.
For the proposal to approve the merger-related executive compensation and the adjournment proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions with respect to each of the proposal to approve the merger-related executive compensation and the adjournment proposal will have the same effect as a vote “AGAINST” the proposal. In addition, if you do not submit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the proposal to approve the merger-related executive compensation or the adjournment proposal, your shares will not be voted at the special meeting and will not be counted in determining the outcome of the proposal to approve the merger-related executive compensation or the adjournment proposal.
Q.
Who will count the votes?
A.
The votes will be tabulated by a representative of Equiniti Shareowner Services, who will serve as the inspector of elections for the special meeting.
Q.
Where can I find the voting results of the special meeting?
A.
Sportsman’s Warehouse intends to announce preliminary results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that Sportsman’s Warehouse files with the SEC are publicly available when filed. See “Where You Can Find More Information” on page 110.
Q.
What do I do if I receive more than one proxy or set of voting instructions?
A.
If you received more than one proxy card or voting instruction form, your shares are likely registered in different names or with different addresses or are in more than one account. You must separately vote
 
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the shares shown on each proxy card or voting instruction form that you received in order for all of your shares to be voted at the special meeting.
Q.
What vote is required for Sportsman’s Warehouse’s stockholders to approve the merger proposal?
A.
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. Abstentions will have the same effect as a vote “AGAINST” the merger proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.
Q.
What vote of our stockholders is required to approve the proposal to approve the merger-related executive compensation?
A.
Approval of the proposal to approve the merger-related executive compensation requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal to approve the merger-related executive compensation. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the proposal to approve the merger-related executive compensation, your shares will not be voted at the special meeting and will not be counted in determining the outcome of the proposal to approve the merger-related executive compensation.
Q.
What vote of our stockholders is required to approve the adjournment proposal?
A.
Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the adjournment proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the adjournment proposal, your shares will not be voted at the special meeting and will not be counted in determining the outcome of the adjournment proposal.
Q.
Why am I being asked to consider and vote on the proposal to approve the merger-related executive compensation?
A.
Under SEC rules, we are required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to our named executive officers that is based on or otherwise relates to the merger, or “golden parachute” compensation.
Q.
What will happen if Sportsman’s Warehouse’s stockholders do not approve the proposal to approve the merger-related executive compensation?
A.
The vote on the proposal to approve the merger-related executive compensation is a vote separate and apart from the vote on the merger proposal. Accordingly, a stockholder may vote “AGAINST” the proposal to approve the merger-related executive compensation and vote “FOR” the merger proposal, and vice versa. Because the vote on the proposal to approve the merger-related executive compensation is advisory in nature only, it will not be binding on Sportsman’s Warehouse, Great Outdoors Group or the Merger Sub. Accordingly, if the merger proposal is approved by Sportsman’s Warehouse’s stockholders and the merger is completed, the merger-related compensation will be paid to Sportsman’s Warehouse’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements, even if stockholders of Sportsman’s Warehouse do not approve the proposal to approve the merger-related executive compensation.
Q.
How does the merger consideration compare to the market price of our common stock?
A.
The merger consideration of $18.00 per share represents a premium of approximately 42.3% to $12.65
 
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per share, the closing price of our common stock on Nasdaq on December 21, 2020, the last trading day prior to the public announcement of the execution of the merger agreement. The merger consideration represents a premium of approximately 46.2% and 32.5% to the 7-day and 180-day, respectively, volume weighted average price per share of our common stock prior to the public announcement of the execution of the merger agreement.
Q.
What will holders of Sportsman’s Warehouse equity-based and performance awards receive in the merger?
A.
At or immediately prior to the effective time, each Sportsman’s Warehouse RSU award that is outstanding immediately prior to the effective time will be canceled by virtue of the merger and without any action on the part of the holder thereof and converted into the right to receive (less applicable withholding taxes and without interest) an amount in cash equal to (i) the number of shares of our common stock subject to the Sportsman’s Warehouse RSU award immediately prior to the effective time multiplied by (ii) $18.00.
At or immediately prior to the effective time, each Sportsman’s Warehouse PSU award that is outstanding immediately prior to the effective time will be canceled by virtue of the merger and without any action on the part of the holder thereof and converted into the right to receive (less applicable withholding taxes and without interest) an amount in cash equal to (i) the number of shares of our common stock subject to the Sportsman’s Warehouse PSU award immediately prior to the effective time, as determined pursuant to the terms of the award and as outlined in the following paragraph, multiplied by (ii) $18.00.
Each outstanding Sportsman’s Warehouse PSU award covers three distinct performance periods (the Sportsman’s Warehouse fiscal years 2020, 2021 and 2022), with one-third of the total target number of PSUs subject to each award allocated to each of those three performance periods. Between 0% and 200% of the portion of the target number of PSUs allocated to any one of the individual performance periods may become eligible to vest based on performance during that performance period. If the effective time occurs on or before April 16, 2021, then the number of shares of our common stock subject to the Sportsman’s Warehouse PSU awards that are outstanding immediately prior to the effective time and that will be cashed out in accordance with the preceding paragraph will equal the sum of (i) 200% of the portion of the PSUs subject to the award corresponding to fiscal year 2020 (as the performance goals for that year were achieved at the applicable maximum levels), and (ii) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal years 2021 and 2022. If the effective time occurs after April 16, 2021 but on or before April 18, 2022, then the number of shares of our common stock subject to the Sportsman’s Warehouse PSU awards that are outstanding immediately prior to the effective time and that will be cashed out in accordance with the preceding paragraph will equal the sum of (i) 200% of the portion of the PSUs subject to the award corresponding to fiscal year 2020 (as the performance goals for that year were achieved at the applicable maximum levels), (ii) the greater of (a) the portion of the PSUs subject to the award corresponding to fiscal year 2021 that would vest assuming the 2021 performance year ended on the effective time and based on actual performance for that shortened period measured against pro-rated fiscal year 2021 performance goals, and (b) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal year 2021, and (iii) 100% (the target level of performance) of the PSUs subject to the award corresponding to fiscal year 2022.
We caused the offering period under the ESPP in progress at the time of the execution of the merger agreement to be the final offering period under the ESPP. The termination date for such final offering under the ESPP was December 31, 2020, or the final ESPP purchase date. On the final ESPP purchase date, the funds credited for each participant under the ESPP were used to purchase shares of our common stock in accordance with the terms of the ESPP. No new offering or purchase periods under the ESPP will commence after the final ESPP purchase date. The ESPP will be terminated as of the effective time.
Q.
When do you expect the merger to be completed?
A.
We are working towards completing the merger as soon as possible. Assuming timely receipt of required regulatory clearance and satisfaction of other closing conditions, including approval by our
 
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stockholders of the merger proposal, we anticipate that the merger will be completed in the second half of calendar year 2021. If our stockholders vote to approve the merger proposal, the merger will become effective as promptly as practicable following the satisfaction or waiver of the remaining conditions to the merger, subject to the terms of the merger agreement. See “The Merger Agreement — Closing and Effective Time of the Merger” beginning on page 73. However, the parties cannot predict the exact timing of the completion of the merger or whether the merger will be completed at an earlier or later time, as agreed by the parties, or at all.
Q.
When will stockholders receive the merger consideration?
A.
At or prior to the effective time, Great Outdoors Group will deposit, or will cause to be deposited, with a paying agent selected by Great Outdoors Group and reasonably acceptable to Sportsman’s Warehouse (which we refer to as the “paying agent”), for the benefit of the holders of shares of our common stock, an amount of cash sufficient to pay the merger consideration payable to our stockholders.
Promptly after the effective time (but in no event later than two business days thereafter), Great Outdoors Group will send, or will cause the paying agent to send, to each holder of record of shares of our common stock at the effective time a letter of transmittal (in a form that was reasonably acceptable to Sportsman’s Warehouse prior to the effective time) and instructions (which will specify that the delivery will be effected, and risk of loss and title will pass, only upon proper delivery of the certificates representing shares of our common stock or transfer of uncertificated shares of our common stock to the paying agent) for use in connection with exchanging such certificates for the merger consideration. The paying agent will pay each holder of record the merger consideration to which such holder is entitled (i) in the case of certificated shares, after surrendering the certificate(s) representing shares of our common stock, together with a properly completed letter of transmittal, and (ii) in the case of a book-entry transfer of uncertificated shares, after receipt of an “agent’s message” by the paying agent (or such other evidence, if any, of transfer as the paying agent may reasonably request).
Q.
What happens if the merger is not completed?
A.
If the merger proposal is not approved by the stockholders of Sportsman’s Warehouse or if the merger is not completed for any other reason, the stockholders of Sportsman’s Warehouse will not receive any payment for their shares of our common stock in connection with the merger. Instead, Sportsman’s Warehouse will remain an independent public company, and our common stock will continue to be listed and traded on Nasdaq. Under specified circumstances, Sportsman’s Warehouse may be required to pay to Great Outdoors Group a termination fee of $9,000,000 or $23,000,000, depending on the circumstances, or Great Outdoors Group may be required to pay to Sportsman’s Warehouse a termination fee of $55,000,000, with respect to the termination of the merger agreement, as described in the section entitled “The Merger Agreement — Termination Fees” beginning on page 92.
Q.
What conditions must be satisfied to complete the merger?
A.
Sportsman’s Warehouse, Great Outdoors Group and Merger Sub are not required to complete the merger unless a number of conditions are satisfied or waived. These conditions include, among others: (i) the approval of the merger proposal by our stockholders at the special meeting; (ii) the absence of a material adverse effect on Sportsman’s Warehouse; (iii) the expiration or termination of any applicable waiting period (and extensions thereof) under the HSR Act relating to the merger (as described more particularly in the section entitled “The Merger — Regulatory Clearance” beginning on page 71); (iv) no restraint issued by any governmental authority of competent jurisdiction being in effect enjoining or otherwise prohibiting the consummation of the merger; and (v) customary conditions in favor of each of the parties regarding the accuracy of the other party’s representations and warranties (subject to certain materiality, material adverse effect, and de minimis qualifiers) and the other party’s compliance with its covenants and agreements contained in the merger agreement in all material respects. For a more complete summary of the conditions that must be satisfied or waived prior to the completion of the merger, see “The Merger Agreement — Conditions to the Merger” beginning on page 89.
Q.
Is the merger expected to be taxable to me?
A.
Yes. The exchange of shares of our common stock for the merger consideration of $18.00 per share in
 
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cash pursuant to the merger, generally, will be a taxable transaction to U.S. holders (as defined in the section entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” on page 70) for U.S. federal income tax purposes. If you are a U.S. holder and you exchange your shares of our common stock in the merger for cash, you generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and your adjusted tax basis in such shares. We encourage you to read “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 70 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.
Q.
Do any of Sportsman’s Warehouse’s directors or officers have interests in the merger that may differ from or be in addition to my interests as a stockholder?
A.
In considering the recommendation of the Board with respect to the merger proposal, you should be aware that our directors and executive officers may have interests in the merger that may be different from, in conflict with or in addition to, the interests of our stockholders generally. The Board was aware of and considered these interests, at the time, among other matters, in evaluating and negotiating the merger agreement, approving the merger agreement and the merger, and in recommending that the merger agreement be adopted and approved by the stockholders of Sportsman’s Warehouse. See “The Merger — Interests of Certain Persons in the Merger” beginning on page 66 and “Proposal 2: Non-Binding, Advisory Vote on Merger-Related Compensation for Sportsman’s Warehouse’s Named Executive Officers” beginning on page 95.
Q.
What happens if I sell my shares of our 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 our common stock after the record date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your shares, you will retain your right to vote such shares at the special meeting but will transfer the right to receive the merger consideration upon consummation of the merger to the person to whom you transfer your shares.
Q.
What happens if I sell my shares of common stock after the special meeting but before the effective time?
A.
If you transfer your shares after the special meeting but before the effective time, you will have transferred the right to receive the merger consideration upon the consummation of the merger to the person to whom you transfer your shares. In order to receive the merger consideration, you must hold your shares of our common stock through the completion of the merger.
Q.
Should I send in my stock certificates now?
A.
No. If you hold certificated shares of our common stock, and each of conditions to the consummation of the merger are satisfied or waived and the merger is consummated, you will be sent a letter of transmittal promptly, and in any event within two business days, after the effective time, describing how you may exchange your certificates that formerly represented shares of our common stock for the merger consideration. If you hold uncertificated shares of our common stock, your shares will be converted into the merger consideration following receipt by the paying agent of an “agent’s message” (or such other evidence, if any, of transfer as the paying agent may reasonably request). If your shares of our common stock are held in street name through a broker, bank or other nominee, you should contact your broker, bank or other nominee for instructions as to how to effect the surrender of your street name shares of our common stock in exchange for the merger consideration. See “The Merger — Payment of Merger Consideration and Surrender of Stock Certificates” beginning on page 65. Please do NOT return any stock certificates you hold with your proxy.
Q.
Should I do anything with respect to my RSU or PSU awards now?
A.
No. There is no need for you to do anything with respect to your RSU or PSU awards at this time. Shortly after the merger is completed, your RSU and PSU awards that are outstanding immediately prior to the effective time will be automatically exchanged for the applicable consideration as described above.
 
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Q.
Am I entitled to exercise appraisal rights under the DGCL instead of receiving the merger consideration for my shares of our common stock?
A.
Yes. As a holder of our common stock, you are entitled to exercise appraisal rights under Section 262 of the DGCL in connection with the merger if you take certain actions and meet certain conditions, including that you do not vote (in person or by proxy) in favor of the merger proposal. See “Appraisal Rights” beginning on page 103.
Q.
Who will solicit and pay the cost of soliciting proxies?
A.
Sportsman’s Warehouse has engaged EQ Proxy Services (which we refer to as the “proxy solicitor”) to assist in the solicitation of proxies for the special meeting. Sportsman’s Warehouse estimates that it will pay the proxy solicitor a fee of $11,500.00, plus reimbursement of related expenses. Sportsman’s Warehouse has also agreed to reimburse the proxy solicitor for certain reasonable and documented fees and expenses and will indemnify the proxy solicitor and all of its directors, officers, employees and agents against certain claims, expenses, losses, damages and/or liabilities. Sportsman’s Warehouse may also reimburse banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock. 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.
Q.
Who can help answer any other questions I might have?
A.
If you have additional questions about the merger, need assistance in submitting your proxy or voting your shares of our common stock, or need additional copies of the proxy statement or the enclosed proxy card, please contact EQ Proxy Services, our proxy solicitor, by calling 1 (516) 220-8356 if you are a bank or broker or, for all others, calling toll-free at 1 (833) 503-4127 or using the contact information below.
[MISSING IMAGE: lg_eq-4c.jpg]
90 Park Avenue
New York, NY 10016
Banks and Brokers Call: 1 (516) 220-8356
All Others Call Toll-free: 1 (833) 503-4127
Email: gerard.comer@equiniti.com
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”), and Section 21E of the Exchange Act, which statements involve substantial risks and uncertainties. All statements, other than statements of historical or current facts included in this proxy statement, are forward-looking statements. These statements are often identified by the words “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” or other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact.
These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict and many of which we have no control over. You should not place undue reliance on our forward-looking statements. These factors, risks and uncertainties include, but are not limited to:

the possibility that Sportsman’s Warehouse may be unable to obtain the required stockholder approval or antitrust regulatory clearance or that other conditions to closing the merger may not be satisfied, such that the merger will not close or that the closing may be delayed;

the reaction of customers, suppliers and other business partners to the announcement of our entry into the merger agreement;

the possibility that the merger may involve unexpected costs, liabilities or delays;

risks that the merger disrupts current plans and operations of the parties to the merger;

potential difficulties in employee retention due to the announcement of our entry into the merger agreement and pendency of the merger;

the amount of the costs, fees, expenses and charges related to the merger;

the outcome of any legal proceedings related to the merger;

the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;

current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the demand for our products and our ability to conduct our business;

general economic and market conditions and economic, market and financial uncertainties;

the COVID-19 pandemic and measures intended to reduce its spread;·

our concentration of stores in the Western United States, which makes us susceptible to adverse conditions in this region, which could affect our sales and cause our operating results to suffer;

the highly fragmented and competitive nature of our industries in which we may face increased competition;

changes in consumer demands, including regional preferences, which we may not be able to identify and respond to in a timely manner;

the possibility that we may not be successful in operating our stores in any existing or new markets into which we expand; and

other factors discussed from time to time in our reports filed with the SEC, including the factors discussed in Item 1A, “Risk Factors” of Sportsman’s Warehouse’s Annual Report on Form 10-K for the year ended February 1, 2020, as such disclosures may be amended, supplemented or superseded from time to time by other reports we file with the SEC, including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and public communications.
You should not rely upon forward-looking statements as predictions of future events. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that
 
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could have an impact on the forward-looking statements contained in this proxy statement. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on any forward-looking statements we make. These forward-looking statements speak only as of the date of this proxy statement and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties and other factors that are in many cases beyond our control. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly, whether as a result of new information, future developments or otherwise.
 
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PARTIES TO THE MERGER
Sportsman’s Warehouse Holdings, Inc., a Delaware corporation, is an outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant, and everyone in between. Sportsman’s Warehouse’s mission is to provide outstanding gear and exceptional service to inspire outdoor memories. Sportsman’s Warehouse strives to accomplish this goal by tailoring our broad and deep merchandise assortment to meet local conditions and demand, offering everyday low prices, providing friendly support from Sportsman’s Warehouse’s knowledgeable and highly trained staff, and offering a top-tier e-commerce experience, extensive in-store events and educational programming.
Sportsman’s Warehouse’s common stock is listed on Nasdaq under the symbol “SPWH.” Sportsman’s Warehouse’s principal executive offices are located at 1475 West 9000 South, Suite A, West Jordan, Utah, 84088, and our telephone number is (801) 566-6681. Additional information about Sportsman’s Warehouse can be found at www.sportsmans.com. The information provided on or accessible through Sportsman’s Warehouse’s website is not a part of or incorporated by reference in this proxy statement or any other report or document we file with or furnish to the SEC.
Great Outdoors Group, LLC, a privately-held Delaware limited liability company, serves as the holding company for the operations of Bass Pro Shops, Cabela’s, White River Marine Group and a collection of nature-based resorts. Bass Pro Shops was founded in 1972 and is a leading national retailer of sporting and hunting gear and apparel. In 2017, Bass Pro Shops united with Cabela’s; together they operate 169 stores, and more than 500 million outdoor enthusiasts visit their websites annually. White River Marine Group is a manufacturer and retailer of recreational boats with industry-leading brands including Tracker Boats, Sun Tracker, Nitro, Tahoe, Regency, Mako, Ranger and Triton. Great Outdoors Group’s collection of nature-based resorts include Big Cedar Lodge, America’s premier wilderness resort, which welcomes more than one million guests annually to Missouri’s Ozark Mountains. Great Outdoors Group and its businesses employ over 30,000 team members. Great Outdoors Group’s principal executive offices are located at 2500 East Kearney, Springfield, Missouri 65898, and its telephone number is (417) 873-5000.
Phoenix Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of Great Outdoors Group, was incorporated for the sole purpose of consummating the transactions contemplated by the merger agreement. Prior to the effective time of the merger, Merger Sub will have engaged in no other business activities and will have incurred no liabilities or obligations, other than activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement. Upon the completion of the merger, Merger Sub will cease to exist and Sportsman’s Warehouse will continue as the surviving corporation. Merger Sub’s principal executive offices are located at 2500 East Kearney, Springfield, Missouri 65898, and its telephone number is (417) 873-5000.
 
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THE SPECIAL MEETING
We are furnishing this proxy statement to stockholders of Sportsman’s Warehouse as part of the solicitation of proxies by the Board for use at the special meeting or any adjournment or postponement thereof. This proxy statement provides stockholders of Sportsman’s Warehouse with the information they need to know to be able to vote at the special meeting or any adjournment or postponement thereof.
Date, Time and Place of the Special Meeting
The special meeting will be held on March 23, 2021 at 10:00 a.m. Mountain Time, via live audiocast on the Internet, or at any adjournment or postponement thereof. You may register to listen to and participate in the special meeting by going to register.proxypush.com/spwh and following the instructions provided for registration by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting. Approximately one hour prior to the start time of the special meeting, all stockholders who have pre-registered by no later than 3:00 p.m. Mountain Time on March 19, 2021 will receive an email containing a unique URL link providing access to the special meeting, as well as a URL link providing ability to vote during the special meeting. We encourage you to access the special meeting audiocast using the URL link you receive prior to the start time. The special meeting audiocast will begin at 10:00 a.m. Mountain Time. Stockholders may submit questions during the special meeting or while pre-registering for the special meeting at register.proxypush.com/spwh. Please note that recording of the special meeting will not be permitted.
Purpose of the Special Meeting
At the special meeting, holders of our common stock will be asked to consider and vote on the following:

the merger proposal;

the proposal to approve the merger-related executive compensation; and

the adjournment proposal.
The Board (i) has unanimously (a) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Sportsman’s Warehouse’s stockholders, (b) approved and declared advisable the merger agreement and the transactions contemplated thereby, (c) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (d) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders; and (ii) unanimously recommends that Sportsman’s Warehouse’s stockholders vote “FOR” the merger proposal; “FOR” the proposal to approve the merger-related executive compensation; and “FOR” the adjournment proposal.
If our stockholders fail to approve the merger proposal, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement, and the material provisions of the merger agreement are summarized in the section of this proxy statement entitled “The Merger Agreement” beginning on page 73 of this proxy statement.
Record Date, Notice and Quorum
The Board has fixed the close of business on January 29, 2021 as the record date for determination of stockholders entitled to receive notice of, and to vote at, the special meeting, and any adjournments or postponements thereof. As of the close of business on the record date, there were 43,648,226 shares of our common stock outstanding and entitled to vote at the special meeting.
The presence at the special meeting, in person or represented by proxy, of the holders of a majority of our common stock issued and outstanding and entitled to vote at the special meeting constitutes a quorum for the transaction of business at the special meeting. If a quorum is not present at the special meeting, we expect that the special meeting will be adjourned to a later date to solicit additional proxies as permitted
 
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by our bylaws. See the section below entitled “Adjournments and Postponements” beginning on page 31 for additional information.
Abstentions will count as present and entitled to vote for purposes of determining the existence of a quorum. If you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares at the special meeting, your shares will not be counted for purposes of determining the existence of a quorum.
Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the meeting unless a majority of our common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the meeting in person or are represented by proxy at the special meeting.
Attendance at the Special Meeting
All holders of shares of Sportsman’s Warehouse common stock as of the close of business on the record date, including stockholders of record and stockholders who hold our common stock through a broker, bank or other nominee (that is, in “street name”), may register to listen to and participate in the special meeting via live audiocast on the Internet at register.proxypush.com/spwh. You must pre-register by no later than 3:00 p.m. Mountain Time on March 19, 2021. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the special meeting.
You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able to pre-register. Please note that if you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote your shares at the special meeting. Once you have obtained the legal proxy, you must send a copy of the legal proxy to EQ Proxy Services via e-mail to EQSS-ProxyTabulation@equiniti.com by 11:59 p.m., Mountain Time, on March 22, 2021, the day before the special meeting. Please note that if you hold your shares in street name you will also need to submit a copy of a brokerage statement reflecting your stock ownership as of the record date.
Shares Held in Street Name
If your shares are held in street name through a broker, bank or other nominee, you will need to provide voting instructions to your broker, bank or other nominee to instruct how to vote your shares at the special meeting. Please follow the instructions provided by your broker, bank or other nominee.
In accordance with applicable stock exchange rules, if you hold your shares through a brokerage account and you fail to provide voting instructions to your broker, your broker may generally vote your uninstructed shares of common stock in its discretion on routine matters at a stockholder meeting. However, a broker cannot vote shares of common stock held in street name on non-routine matters such as the merger proposal unless the broker receives voting instructions from the stockholder. Generally, if a broker exercises this discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker, but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. All of the proposals to be voted on at the special meeting are non-routine matters. Accordingly, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on any of the proposals presented at the special meeting. As a result, we do not expect any broker non-votes at the special meeting.
Vote Required
Each holder of our common stock is entitled to one vote for each share of our common stock held on the record date.
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon. For the merger proposal, you may vote
 
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FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as a vote “AGAINST” the merger proposal. In addition, if you do not submit a valid proxy or virtually attend the special meeting to vote your shares of common stock or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.
Approval of the proposal to approve the merger-related executive compensation and the adjournment proposal each require the affirmative vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. For each of these proposals, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions with respect to each of the proposal to approve the merger-related executive compensation and the adjournment proposal will have the same effect as a vote “AGAINST” the proposal. In addition, if you do not submit a valid proxy or attend the special meeting to vote your shares of common stock in person or if you hold your shares of common stock in street name and fail to instruct your broker, bank or other nominee how to vote your shares on the proposal to approve the merger-related executive compensation or the adjournment proposal, your shares will not be voted at the special meeting and will not be counted in determining the outcome of the proposal to approve the merger-related executive compensation or the adjournment proposal.
Because the vote on the proposal to approve the merger-related executive compensation is advisory in nature only, it will not be binding on Sportsman’s Warehouse, Great Outdoors Group or the surviving corporation in the merger. Accordingly, if the merger agreement is adopted and approved by Sportsman’s Warehouse’s stockholders at the special meeting and the merger is completed, the merger-related compensation will be paid to Sportsman’s Warehouse’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if the stockholders do not approve the proposal to approve the merger-related executive compensation.
Voting
Voting at the Special Meeting
All holders of shares of Sportsman’s Warehouse common stock as of the close of business on the record date, including stockholders of record and stockholders who hold shares of our common stock in street name, may register to listen to and participate in the special meeting via live audiocasts on the Internet at register.proxypush.com/spwh. You must pre-register by no later than 3:00 p.m. Mountain Time on March 19, 2021. You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able pre-register Approximately one hour prior to the start time of the special meeting, all stockholders who have pre-registered by no later than 3:00 p.m. Mountain Time on March 19, 2021 will receive an email containing a unique URL link providing access to the special meeting, as well as a URL link providing ability to vote during the special meeting.
Please note that if you hold your shares in street name, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the special meeting. Once you have obtained the legal proxy, you must send a copy of the legal proxy to EQ Proxy Services via e-mail to EQSS-ProxyTabulation@equiniti.com by 11:59 p.m., Mountain Time, on March 22, 2021, the day before the special meeting.
Voting by Proxy

Submitting a Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of common stock as a record holder, you may cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid envelope. You may also submit a proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. If you submit a proxy by Internet or telephone, you need not return a written proxy card by mail.

Submitting Voting Instructions for Shares Registered in Street Name. If you hold your shares of common stock in street name, you will receive instructions from your broker, bank or other nominee
 
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on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to provide your voting instructions by telephone. In addition, you may submit your voting instructions by completing, signing and dating the voting instruction form that was included with this proxy statement and returning it in the accompanying prepaid envelope. If you provide voting instructions by Internet or telephone, you need not return a written voting instruction form by mail.
If you are a stockholder of record and you properly submit a proxy card or submit your proxy by telephone or over the Internet, your shares will be voted as instructed or, if no instruction is given, “FOR” approval of the merger proposal, “FOR” approval of the proposal to approve the merger-related executive compensation, and “FOR” the adjournment proposal. If you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker on one or more proposals, your shares will not be voted on such proposal(s) at the special meeting. See the section above entitled “Shares Held in Street Name” beginning on page 28.
Deadline for Voting
If you are a stockholder of record, your proxy must be received by telephone or Internet before the commencement of the special meeting at 10:00 a.m. Mountain Time on March 23, 2021, in order for your shares to be voted at the special meeting. If you are a stockholder of record and you choose to cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card, your proxy card must be received before the special meeting for your shares to be voted at the special meeting.
If you hold your shares in street name, please comply with the deadlines for voting provided by the broker, bank or other nominee that holds your shares.
Revocation of Proxies
If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:

delivering a later dated proxy card or by submitting another proxy by telephone or the Internet as provided above under “Voting” ​(your latest telephone or Internet voting instructions will be followed);

delivering to the Secretary of Sportsman’s Warehouse at our principal executive offices a written notice of revocation prior to the voting of the proxy at the special meeting; or

by voting in person at the special meeting. Attendance at the special meeting will not, by itself, revoke your proxy.
Written notices of revocation should be addressed to:
Sportsman’s Warehouse Holdings, Inc.
Attn: Secretary
1475 West 9000 South, Suite A
West Jordan, Utah 84088
Any change to your proxy that is provided by telephone or the Internet must be submitted before the commencement of the special meeting at 10:00 a.m. Mountain Time on March 23, 2021.
If your shares are held in street name, you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions.
Voting by Sportsman’s Warehouse’s Directors and Executive Officers
As of the record date, the directors and executive officers of Sportsman’s Warehouse beneficially owned and were entitled to vote, in the aggregate, 397,488 (0.91%) shares of our common stock (not including any shares of our common stock underlying any Sportsman’s Warehouse RSU or PSU awards outstanding at that time). The directors and executive officers of Sportsman’s Warehouse have informed Sportsman’s Warehouse that they currently intend to vote all such shares of our common stock “FOR” approval of the merger proposal, “FOR” approval of the proposal to approve the merger-related executive compensation and “FOR” the adjournment proposal.
 
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Solicitation of Proxies; Payment of Solicitation Expenses
Sportsman’s Warehouse has engaged EQ Proxy Services, which we refer to herein as the proxy solicitor, to assist in the solicitation of proxies for the special meeting. Sportsman’s Warehouse estimates that it will pay the proxy solicitor a fee of $11,500.00, plus reimbursement of related expenses. Sportsman’s Warehouse has also agreed to reimburse the proxy solicitor for certain reasonable and documented fees and expenses and will indemnify the proxy solicitor and all of its directors, officers, employees and agents against certain claims, expenses, losses, damages and/or liabilities. Sportsman’s Warehouse may also reimburse banks and brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock. Sportsman’s Warehouse’s 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.
Householding
In accordance with the rules of the SEC, we are permitted to send a single set of proxy materials to stockholders of record who share the same address and last name, unless such stockholders have notified us of their desire to receive multiple copies of our proxy materials. This is known as “householding.” We will promptly deliver, upon oral or written request, a separate copy of the proxy materials to a stockholder residing at a shared address to which only one copy was mailed. If you are a stockholder of record at a shared address to which we delivered a single copy of the proxy materials and you desire to receive a separate copy of the proxy materials for the special meeting or for our future meetings, or if you are a stockholder at a shared address to which we delivered multiple copies of the proxy materials and you desire to receive one copy in the future, please submit your request by calling EQ Shareowner Services at 1-800-468-9716 or by providing written instructions to EQ Shareowner Services, Attn: Householding/Sportsman’s Warehouse Holdings, Inc., P.O. Box 64854, St. Paul, Minnesota 55164-0854.
If you hold your shares in street name, please contact your broker, bank or other nominee directly if you have questions, require additional copies of the proxy materials, or wish to receive multiple copies of the proxy materials now or in the future.
Adjournments and Postponements
Although it is not currently expected, the special meeting may be adjourned or postponed. If a quorum is not present or represented at the special meeting, our bylaws provide that the special meeting may be adjourned to a later date by either (i) the chairperson of the special meeting, or (ii) the vote of the holders of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote thereon. If a quorum is present at the special meeting but there are not sufficient votes at the time of the special meeting to approve the merger proposal, then Sportsman’s Warehouse stockholders may be asked to vote on the adjournment proposal. Pursuant to our bylaws, notices of an adjourned meeting need not be given if the time, date and place, if any, to which the meeting is adjourned and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than 30 days after the date for which the meeting was originally called or the Board sets a new record date for such meeting, in which case a written notice of the place, date and time of the adjourned meeting will be given to each Sportsman’s Warehouse stockholder of record entitled to vote at the meeting. At any subsequent reconvening of the special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting. In addition, Sportsman’s Warehouse may postpone, reschedule or cancel any special meeting of stockholders previously scheduled.
Anticipated Date of Completion of the Merger
We are working towards completing the merger as soon as possible. Assuming timely receipt of required regulatory clearance and satisfaction of other closing conditions, including the approval by our stockholders of the merger proposal, we anticipate that the merger will be completed in the second half of
 
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calendar year 2021. If our stockholders vote to approve the merger proposal, the merger will become effective as promptly as practicable following the satisfaction or waiver of the remaining conditions to the merger, subject to the terms of the merger agreement. See “The Merger Agreement — Closing and Effective Time of the Merger” beginning on page 65. However, the parties cannot predict the exact timing of the completion of the merger or whether the merger will be completed at an earlier or later time, as agreed by the parties, or at all.
Rights of Stockholders Who Seek Appraisal
If the merger is completed, Sportsman’s Warehouse’s stockholders who do not vote in favor of the merger proposal (either in person or by proxy) and meet all of the conditions set forth in Section 262 of the DGCL will have the right to seek appraisal of the fair value of their shares of our common stock as of the effective time determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration if such stockholders follow exactly the procedures set forth in Section 262 of the DGCL. 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 Sportsman’s Warehouse before the vote is taken on the merger proposal, you must not vote (either in person or by proxy) in favor of the merger proposal and you must continue to hold the shares of our common stock from the date of making the demand for appraisal through the effective time. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you may lose your appraisal rights. See “Appraisal Rights” beginning on page 103 and the text of Section 262 of the DGCL reproduced in its entirety as Annex C to this proxy statement. This proxy statement constitutes the notice of appraisal rights with respect to the merger proposal required by Section 262 of the DGCL. If you hold your shares of our common stock through a broker, bank or other nominee and you wish to exercise your appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your broker, bank or other nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly.
Stockholder List
A list of all stockholders entitled to vote at the special meeting will be available for examination at our principal executive offices at 1475 West 9000 South, Suite A, West Jordan, Utah, for ten days before the special meeting, and during the special meeting such list will be available for examination at the URL link pre-registered stockholders will receive providing access to the special meeting.
Other Information
You should not return any evidence of your shares of Sportsman’s Warehouse’s common stock or send documents representing Sportsman’s Warehouse’s common stock with the proxy card. If the merger is completed, the paying agent will send to you a letter of transmittal, if applicable, and related materials and instructions for exchanging your shares of our common stock.
Questions and Additional Information
If you have questions about the merger, need assistance in submitting your proxy or voting your shares of our common stock, or need additional copies of the proxy statement or the enclosed proxy card, please contact the proxy solicitor using the contact information below.
[MISSING IMAGE: lg_eq-4c.jpg]
90 Park Avenue
New York, NY 10016
Banks and Brokers Call: 1 (516) 220-8356
All Others Call Toll-free: 1 (833) 503-4127
Email: gerard.comer@equiniti.com
 
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PROPOSAL 1: ADOPTION AND APPROVAL OF THE MERGER AGREEMENT
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 and in its entirety, as it is the legal document that governs the merger.
The merger agreement provides that, subject to the satisfaction or waiver of the conditions set forth in the merger agreement, Merger Sub will merge with and into Sportsman’s Warehouse. Sportsman’s Warehouse will be the surviving corporation following the merger. As a result of the merger, Sportsman’s Warehouse will cease to be a publicly traded company and will become a wholly-owned subsidiary of Great Outdoors Group. You will not own any shares of the capital stock of the surviving corporation.
Merger Consideration
At the effective time, each outstanding share of our common stock will automatically be canceled and converted into the right to receive an amount in cash equal to $18.00, without interest and less any applicable withholding taxes, other than the excluded shares and dissenting shares. Dissenting shares will not be converted into the right to receive the merger consideration at the effective time, and the holders of such dissenting shares will only have the right to receive the “fair value” of their dissenting shares as of the effective time as determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration, if such stockholders follow exactly the procedures set forth in Section 262 of the DGCL. See “Appraisal Rights” beginning on page 103.
Background of the Merger
The Board, together with the management of Sportsman’s Warehouse (which we refer to as “management”) has reviewed and assessed Sportsman’s Warehouse’s performance, future growth prospects, business strategies, opportunities, competitive position and challenges on a regular basis as part of its evaluation of potential prospects and strategies for enhancing stockholder value. As part of that review process, the Board and management have regularly reviewed and considered Sportsman’s Warehouse’s strategic direction and business objectives, including potential strategic acquisitions and investments.
The following is a summary of principal events, meetings, negotiations and actions among the parties leading to the execution and public announcement of the merger agreement.
On January 22, 2020, John L. Morris (who we refer to as “Mr. Morris”), the founder and Chief Executive Officer of Great American Outdoors Group, LLC (which is the parent company of Great Outdoors Group and which we refer to as “Great American Outdoors”), Mr. John Paul Morris, the son of Mr. Morris, and Mr. Jon Barker, the President and Chief Executive Officer of Sportsman’s Warehouse, met at an annual trade show in Las Vegas, Nevada. At this meeting, Mr. Morris initially proposed a potential business combination in which Great American Outdoors would acquire Sportsman’s Warehouse. Mr. Morris did not propose financial terms for the business combination at that time.
On February 3, 2020, Mr. Barker received a preliminary written indication of interest from Great Outdoors Group (which we refer to as the “February 3 letter”). Among other things, the February 3 letter stated (i) certain reasons why Great Outdoors Group was interested in a potential business combination with Sportsman’s Warehouse, and (ii) Great Outdoors Group’s belief that (a) subject to due diligence, it could propose an all-cash, per share consideration for the acquisition that would be at a meaningful premium to the then-current share price for our common stock and (b) it would be able to make a proposal within several weeks upon receipt of certain requested information. The February 3 letter also requested certain preliminary diligence information from Sportsman’s Warehouse, including five-year financial projections, a summary of certain lease obligations for our stores, certain information regarding our credit card program and information and detail around the size of our customer database. Mr. Barker shared copies of the February 3 letter with the other members of the Board.
On February 4, 2020, the Board held a regular meeting. The Board began the meeting in executive session, with only the members of the Board, including Mr. Barker, and a representative from O’Melveny &
 
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Myers LLP, outside legal counsel to Sportsman’s Warehouse (which we refer to as “O’Melveny”), in attendance. During the executive session, Mr. Barker reviewed for the Board his discussion with Mr. Morris and Mr. John Paul Morris on January 22, 2020 and the content of the February 3 letter. The Board then engaged in a discussion regarding the February 3 letter, including potential responses to Great Outdoors Group. Following this discussion, the Board instructed Mr. Barker that he should communicate to Mr. Morris the Board’s expectation that in order to consider engaging in further discussions, including with respect to providing the information requested by Great Outdoors Group in the February 3 letter, Great Outdoors Group would need to provide Sportsman’s Warehouse with a compelling offer both in terms of price and certainty of consummating the transaction.
On February 6, 2020, Mr. Barker and Mr. Morris discussed telephonically the February 3 letter. During this discussion, Mr. Barker communicated to Mr. Morris the Board’s expectations that in order to consider engaging in further discussions, including with respect to providing the information requested by Great Outdoors Group in the February 3 letter, Great Outdoors Group would need to provide Sportsman’s Warehouse with a compelling offer both in terms of price and certainty of consummating the transaction.
Between February 7, 2020 and February 21, 2020, Mr. Barker received periodic updates from Great Outdoors Group regarding the status and potential timing of a proposal from Great Outdoors Group regarding the potential acquisition of Sportsman’s Warehouse.
On February 26, 2020, Mr. Barker and Mr. Morris discussed telephonically the potential timing of a proposal from Great Outdoors Group regarding the potential acquisition of Sportsman’s Warehouse. Mr. Morris noted that recent market volatility was impacting Great Outdoors Group’s evaluation.
On March 2, 2020, Mr. Morris informed Mr. Barker telephonically that due to the current volatile market conditions, Great Outdoors Group would not make a proposal regarding the acquisition of Sportsman’s Warehouse at such time. He also noted that Great Outdoors Group would like to reconnect with Mr. Barker after the public disclosure of Sportsman’s Warehouse’s earnings results for its fiscal quarter ending May 2, 2020.
On March 3, 2020, Mr. Barker received a message from Mr. Morris reiterating the messaging from their March 2, 2020 telephone call. Mr. Barker updated the Board regarding these developments in communications to Board members on March 3, 2020 and March 4, 2020.
On October 2, 2020, Mr. Morris telephonically informed Mr. Barker that Great Outdoors Group would send a written non-binding indication of interest regarding the potential acquisition of Sportsman’s Warehouse to Mr. Barker. This was the first communication from Great Outdoors Group to Sportsman’s Warehouse regarding a potential business combination transaction since the March 3, 2020 message from Mr. Morris to Mr. Barker.
Later on October 2, 2020, Mr. Barker received a written non-binding indication of interest from Great Outdoors Group (which we refer to as the “October 2 letter”). Among other things, the October 2 letter stated that based on its analysis of publicly available information, Great Outdoors Group would be able to offer stockholders of Sportsman’s Warehouse a cash price between $16.50 and $18.00 per share of our common stock. The October 2 letter also noted Great Outdoors Group’s expectation that its financing would be fully committed at the time a definitive agreement regarding the potential acquisition is signed. The October 2 letter further stated that Great Outdoors Group was prepared to send Sportsman’s Warehouse a list of critical information requests and once such information has been provided, Great Outdoors Group would be able to make a final proposal within a few weeks.
On October 8, 2020, the Board held a special meeting, with representatives from O’Melveny also attending. Among other matters, Mr. Barker reviewed for the Board his discussions with Mr. Morris from February and March 2020 and asked O’Melveny to discuss the Board’s fiduciary duties in the context of the receipt of the October 2 letter. A representative from O’Melveny then reviewed the Board’s various options for responding to the October 2 letter and the Board’s fiduciary duties in such context. The representative from O’Melveny also noted the importance of maintaining the confidentiality of this matter prior to its public disclosure. The Board then engaged in a discussion regarding the October 2 letter, including with respect to the certainty of financing for any proposed transaction, the potential impact of any such proposal on certain investments being contemplated by Sportsman’s Warehouse, and strategic considerations for
 
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responding to Great Outdoors Group. Following such discussion, the Board unanimously instructed Mr. Barker to inform Mr. Morris that the Board was not willing to engage in discussions regarding a potential transaction with Great Outdoors Group on the basis of the price range set forth in the October 2 letter.
On October 9, 2020, pursuant to instructions provided by the Board, Mr. Barker telephonically informed Mr. Morris that the Board was not willing to engage in discussions regarding a potential transaction with Great Outdoors Group on the basis of the price range set forth in the October 2 letter.
On October 12, 2020, Mr. Morris telephonically informed Mr. Barker that Great Outdoors Group would send an updated written indication of interest with a revised price range. Mr. Morris noted to Mr. Barker that such updated price range was the highest Great Outdoors Group could offer and that Great Outdoors Group was also evaluating other investment opportunities.
Later on October 12, 2020, Sportsman’s Warehouse received a written non-binding indication of interest from Great Outdoors Group (which we refer to as the “October 12 letter”). Among other things, the October 12 letter stated that, subject to additional due diligence, Great Outdoors Group was willing to increase its valuation range to a cash price between $19.00 and $21.00 per share of our common stock.
On October 15, 2020, the Board held a special meeting, with representatives from O’Melveny also attending. Mr. Barker reviewed for the Board his discussions with Mr. Morris on October 9, 2020 and October 12, 2020 regarding a potential transaction, including Mr. Morris’ statement that the range offered in the October 12 letter reflected the highest Great Outdoors Group could offer. The Board discussed the increased price range included in the October 12 letter, Great Outdoors Group’s ability to finance the potential transaction and regulatory clearance under the HSR Act. The Board then discussed Sportsman’s Warehouse’s alternatives for responding to the October 12 letter, including the timing of any such response and any subsequent actions. Next, Mr. Christopher Eastland, a member of the Board, led a discussion regarding the selection of a financial advisor and reviewed for the Board a list of potential financial advisors and their prior history with Sportsman’s Warehouse. Following this discussion, the Board unanimously instructed Mr. Eastland to contact Baird to gauge Baird’s interest in acting as financial advisor to Sportsman’s Warehouse in connection with the potential transaction. The Board came to this conclusion based on Baird’s qualifications, expertise, reputation and knowledge of Sportsman’s Warehouse’s business and the industries in which Sportsman’s Warehouse operates. In addition, the Board unanimously instructed Mr. Barker to inform Mr. Morris that subject to execution of an acceptable confidentiality agreement between the parties, the Board was willing to engage in discussions with Great Outdoors Group regarding a potential transaction on the basis of the price range set forth in the October 12 letter, and instructed O’Melveny to prepare a confidentiality agreement for the potential transaction. The Board also unanimously (i) instructed Mr. Barker to lead the diligence process in connection with the potential transaction and (ii) determined that Mr. Barker, Mr. Eastland and Mr. Joseph Schneider, our Board chairperson, should form an informal advisory group to oversee diligence and transaction discussions between meetings of the Board.
On October 16, 2020, a representative from O’Melveny sent the draft confidentiality agreement regarding the potential transaction, which draft included a customary standstill provision, to representatives from King & Spalding LLP, outside legal counsel to Great Outdoors Group (which we refer to as “King & Spalding”). Also on October 16, 2020, Mr. Eastland contacted certain representatives from Baird to gauge Baird’s interest in acting as financial advisor to Sportsman’s Warehouse in connection with the potential transaction and asked Baird to confirm it did not have conflicts of interest with respect to the contemplated representation.
On October 19, 2020, representatives from King & Spalding sent a revised draft of the confidentiality agreement regarding the potential transaction to representatives from O’Melveny. After conferring with Mr. Barker and Mr. Schneider, representatives of O’Melveny sent a further revised draft of the confidentiality agreement to representatives of King & Spalding, who confirmed the revised draft was acceptable to Great Outdoors Group.
On October 20, 2020, Sportsman’s Warehouse entered into a confidentiality agreement with Great Outdoors Group regarding the potential transaction (which confidentiality agreement was dated October 19, 2020 and which we refer to as the “Great Outdoors Group confidentiality agreement”). Also on October 20,
 
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2020, Mr. Barker and Mr. Kevin Maliszewski, the Chief Financial Officer of Great Outdoors Group (referred to herein as “Mr. Maliszewski”), telephonically discussed the process for the review and evaluation of the potential transaction.
Also on October 20, 2020, representatives from Baird informed Mr. Eastland that Baird was interested in acting as financial advisor to Sportsman’s Warehouse in connection with the potential transaction and confirmed that Baird did not represent Great Outdoors Group with respect to the contemplated representation.
On October 22, 2020, Sportsman’s Warehouse received a request from Great Outdoors Group for certain information, including financial projections of Sportsman’s Warehouse. Sportsman’s Warehouse provided information to Great Outdoors Group in response to such request and continued to provide responses to Great Outdoors Group’s diligence inquiries until December 21, 2020, in each case, pursuant to the terms of the Great Outdoors Group confidentiality agreement.
On October 23, 2020, the Board held a special meeting, with representatives from O’Melveny also attending. At the request of the Board, a representative from O’Melveny reviewed for the Board certain features of, and issues applicable to, public company transactions, including differences from acquisitions of private companies, alternative transaction structures, and potential litigation and regulatory investigations. Next, Mr. Barker led a discussion regarding the planned due diligence process for the potential transaction and provided a summary of the initial list of due diligence requests received from Great Outdoors Group. Mr. Eastland then reviewed for the Board his discussions with representatives from Baird since the October 15, 2020 Board meeting, and the Board discussed the potential retention of Baird as a financial advisor. Following this discussion, the Board unanimously instructed Mr. Barker, Mr. Schneider and representatives from O’Melveny to discuss the potential engagement of Baird to serve as financial advisor to Sportsman’s Warehouse and to request a draft engagement letter for review. The Board further agreed to meet again after receipt of the draft terms of Baird’s engagement to review such terms.
Between October 25, 2020 and October 27, 2020, representatives of Baird and representatives of O’Melveny (with the input of Mr. Schneider, Mr. Eastland and Mr. Barker) negotiated the terms of the engagement.
On October 28, 2020, the Board held a special meeting, with representatives from O’Melveny also attending. At the request of the Board, a representative from O’Melveny reviewed terms of the proposed engagement of Baird, as well as a letter from Baird confirming it has not provided financial advisory and/or investment banking services to Great American Outdoors. Following this discussion, the Board unanimously approved Sportsman’s Warehouse’s engagement of Baird. Also during this meeting, Mr. Barker provided an update on due diligence and other ongoing matters related to the potential transaction.
Also on October 28, 2020, Mr. Barker and Mr. Maliszewski telephonically discussed the due diligence process for the potential transaction.
On October 29, 2020, Mr. Barker and Mr. Morris telephonically discussed certain logistical matters and coordination related to the potential transaction.
On November 2, 2020, Mr. Barker and Mr. Maliszewski discussed Sportsman’s Warehouse’s retention of Baird as a financial advisor, and Mr. Barker introduced representatives from Baird to representatives from J.P. Morgan Securities LLC, as financial advisor to Great Outdoors Group (which we refer to as “JPMorgan”).
On November 4, 2020, representatives from Baird and JPMorgan held an introductory call to discuss the potential transaction.
On November 9, 2020, representatives from Baird and JPMorgan telephonically discussed the ongoing due diligence process for the potential transaction, coordination of a proposed meeting between the management teams of Sportsman’s Warehouse and Great Outdoors Group, the timeline contemplated for the potential transaction and Great Outdoors Group’s financing strategy.
On November 11, 2020, Sportsman’s Warehouse and Great Outdoors Group entered into a joint defense and confidentiality agreement with respect to the potential transaction.
 
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Also on November 11, 2020, the Board held a special meeting, with Mr. Robert Julian, the Chief Financial Officer of Sportsman’s Warehouse, and representatives from each of O’Melveny and Baird also attending. Mr. Barker updated the Board regarding the due diligence process and confirmed information had been provided to Great Outdoors Group in response to its initial due diligence requests. Mr. Barker also noted that management was continuing to work on the financial projections requested by Great Outdoors Group. Then, a representative from Baird updated the Board regarding the two telephonic discussions between Baird and JPMorgan on November 4, 2020 and November 9, 2020. The representative from Baird noted that Great Outdoors Group believes it has sufficient capital to consummate the potential transaction and may not need a commitment letter from a third party lender. Next, Mr. Barker discussed the contemplated meeting between the management teams of Sportsman’s Warehouse and Great Outdoors Group, including the potential attendees and protocols for sharing information during such meeting. The Board unanimously confirmed its support for the contemplated management meeting. At the request of the Board, a representative from Baird also discussed with the Board a preliminary timeline for the potential transaction and prospective buyers, including prospective strategic acquirers, private equity firms and family offices, which would potentially have the industry interest and financial ability to acquire Sportsman’s Warehouse. The representative from Baird then discussed certain factors that may make each type of prospective buyer more or less likely to acquire Sportsman’s Warehouse, as well as investment alternatives available to such buyers. The representative from Baird also discussed with the Board whether Sportsman’s Warehouse would find an offer superior to that proposed by Great Outdoors Group by checking the market concurrently with its negotiations with Great Outdoors Group, and that conducting a market check prior to signing a definitive agreement related to the potential transaction could potentially discourage the interest of Great Outdoors Group and lead to market rumors that could damage Sportsman’s Warehouse’s business. The representative from Baird also informed the Board that JPMorgan had advised Baird that if Sportsman’s Warehouse conducted an auction process, Great Outdoors Group may not participate in such process. The representative of Baird discussed with the Board that either (i) the Board forego conducting a market-check prior to signing a definitive transaction agreement and instead negotiate for the ability to solicit alternative acquisition proposals after signing the definitive transaction agreement, or (ii) subject to the Board’s assessment of the risks and benefits of doing so, engage in a limited pre-signing market check with a small subset of bidders that the Board believed were reasonably likely to be willing and able to submit a competitive acquisition proposal. Following this discussion, the Board unanimously determined to continue engaging in bilateral negotiations with Great Outdoors Group on the potential transaction and not pursue a market-check prior to signing a definitive transaction agreement. The Board also unanimously instructed the representatives of Baird to continue their discussions with Great Outdoors Group and JPMorgan regarding the process for and the timing of the potential transaction.
In early November 2020, management prepared its projections of Sportsman’s Warehouse’s future financial performance for fiscal years 2020 through 2023 (which we refer to as the “Three Year Management Projections”) in response to a due diligence request from Great Outdoors Group. On November 16, 2020, management provided copies of the Three Year Management Projections to the Board for its review at the November 16, 2020 meeting of the Board.
On November 16, 2020, the Board held a special meeting, with Mr. Julian and representatives from each of O’Melveny and Baird also attending. At the request of the Board, a representative from O’Melveny reviewed for the Board certain process matters related to the Board’s review of the Three Year Management Projections, including with respect to the anticipated delivery of the Three Year Management Projections to Great Outdoors Group if approved by the Board. Next, Mr. Julian reviewed for the Board the Three Year Management Projections, including each of the key assumptions and inputs used by management in preparing the Three Year Management Projections. After the conclusion of this discussion, the Board authorized and adopted the Three Year Management Projections and approved delivery of the Three Year Management Projections to Great Outdoors Group in connection with the potential transaction.
On November 17, 2020, at the direction of the Board, a representative of Baird provided a copy of the Three Year Management Projections to Great Outdoors Group and JPMorgan.
On November 19, 2020, Mr. Barker, Mr. Julian and Mr. Jeff White, Senior Director — Accounting and Finance of Sportsman’s Warehouse, met telephonically with Mr. Morris, Mr. John Paul Morris and Mr. Maliszewski (who we sometimes refer to collectively as “senior management of Great Outdoors Group”),
 
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as well as representatives from each of JPMorgan and Baird to discuss, among other things, the due diligence process in connection with the potential transaction, Sportsman’s Warehouse’s financial performance in the fiscal quarter ended October 31, 2020, the impact of the COVID-19 pandemic on Sportsman’s Warehouse’s business, and the Three Year Management Projections. Also on November 19, 2020, representatives from Baird and JPMorgan met telephonically to discuss, among other things, the process and timing for completing due diligence and the absence of a financing condition for the potential transaction. During this discussion, at the direction of the Board, representatives from Baird informed JPMorgan that Sportsman’s Warehouse would not provide additional responses to the most recent due diligence requests unless Great Outdoors Group made an acquisition offer with a specific per share purchase price (rather than a range of prices).
In late November 2020, management supplemented the Three Year Management Projections to include its projections of Sportsman’s Warehouse’s future financial performance for fiscal years 2024 and 2025 and to make the following adjustments: (i) normalizing Sportsman’s Warehouse’s financial results for the twelve months ended October 31, 2020 in order to address the unique business levels experienced during such period due to the COVID-19 pandemic, social unrest, the presidential election, and certain other national events in the United States; (ii) revising its calculations of Adjusted EBITDA to exclude certain pre-opening and stock compensation expenses; and (iii) providing its projection of Sportsman’s Warehouse’s unlevered free cash flow for fiscal years 2020 through 2025 (we refer to these adjusted projections for fiscal years 2020 through 2025 as the “DCF Projections”). On November 23, 2020, management provided copies of the DCF Projections to representatives from Baird for use in its analysis. Please see the section entitled “— Certain Company Forecasts” beginning on page 47 for a summary of the DCF Projections.
On November 23, 2020, the Board held a special meeting, with Mr. Julian and representatives from each of O’Melveny and Baird also attending. Mr. Barker provided the Board a summary of the November 19, 2020 telephonic management meeting between Mr. Barker, Mr. Julian, senior management of Great Outdoors Group, and representatives from each of JPMorgan and Baird. Mr. Barker noted that Mr. Morris expressed that the meeting was well received by senior management of Great Outdoors Group. Afterwards, a representative from Baird provided the Board an update regarding the November 19, 2020 telephonic discussion between representatives of Baird and JPMorgan. The representative from Baird also noted that JPMorgan indicated Great Outdoors Group would propose a specific price per share for the common stock but did not specify timing for such proposal.
On November 24, 2020, the Board held a regularly scheduled meeting, and following the conclusion of such regular meeting, convened an executive session, with Mr. Julian and representatives from O’Melveny also attending. Among other matters, Mr. Barker provided the Board an update on the potential transaction with Great Outdoors Group. Mr. Barker noted that Sportsman’s Warehouse had received a legal due diligence request list from King & Spalding on November 23, 2020 and a financial and accounting diligence list on November 24, 2020 from an outside accounting advisor to Great Outdoors Group.
On November 25, 2020, Sportsman’s Warehouse received a revised written indication of interest from Great Outdoors Group (which we refer to as the “November 25 letter”). The November 25 letter stated that Great Outdoors Group was prepared to offer $19.00 per share in cash to acquire all of the outstanding shares of Sportsman’s Warehouse and its affiliates, subject to completion of customary diligence and the negotiation of a satisfactory merger agreement.
On November 28, 2020, the Board held a special meeting, with Mr. Julian and representatives from each of O’Melveny and Baird also attending. At the request of the Board, Mr. Barker reviewed for the Board his past communications with Great Outdoors Group regarding a potential transaction, including each of the October 2 letter, the October 12 letter and the November 25 letter. The Board asked questions of Mr. Barker and the representatives of Baird regarding their respective communications with Great Outdoors Group and JPMorgan. The Board then discussed various considerations for responding to the November 25 letter, including the amount and timing of any counterproposal. Following this discussion, the Board unanimously determined to respond to the November 25 letter with a counterproposal of $21.00 per share in cash and instructed the representatives of Baird to (i) orally deliver such counterproposal to representatives from JPMorgan and (ii) request further evidence of Great Outdoors Group’s ability to finance the potential transaction.
 
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On November 29, 2020, representatives from Baird met telephonically with representatives from JPMorgan and, at the direction of the Board, informed JPMorgan of Sportsman’s Warehouse’s counterproposal of $21.00 per share in cash. In addition, at the direction of the Board, representatives from Baird also requested that Great Outdoors Group deliver further evidence of its ability to finance the potential transaction.
On December 1, 2020, Mr. Barker received a telephone call from Mr. Morris. Mr. Morris expressed he was eager to commence the next phase of the potential transaction between Sportsman’s Warehouse and Great Outdoors Group, including the negotiation of a definitive merger agreement. Mr. Morris further noted that Great Outdoors Group would send over a revised offer including a higher per share offer price.
Later on December 1, 2020, Sportsman’s Warehouse received a revised written indication of interest from Great Outdoors Group (which we refer to as the “December 1 letter”). The December 1 letter stated that Great Outdoors Group was prepared to increase its offer to $19.50 per share in cash to acquire all of the outstanding shares of Sportsman’s Warehouse and its affiliates, subject to completion of customary diligence and the negotiation of a satisfactory merger agreement. The December 1 letter also noted that $19.50 per share was Great Outdoors Group’s best and final proposal and that it was important to Great Outdoors Group to finalize the merger agreement and publicly announce the transaction on or before December 21, 2020.
On December 3, 2020, representatives from Baird and JPMorgan met telephonically to discuss the potential transaction. Representatives from JPMorgan noted that their valuation analysis did not justify a $19.50 per share offer price and that Great Outdoors Group desired to increase the offer to $19.50 per share in order to maintain the momentum for a potential transaction. Representatives from JPMorgan also emphasized that signing a definitive merger agreement on or before December 21, 2020 was a meaningful deadline for Great Outdoors Group for purposes internal to Great Outdoors Group, including with respect to cash management and consideration of other investment opportunities. At the Board’s direction, representatives from Baird noted that the Board was focused on a per share offer price equal to or higher than $20.00.
Also on December 3, 2020, the Board held a special meeting, with Mr. Julian and representatives from each of O’Melveny and Baird also attending. At the request of the Board, a representative from Baird discussed Baird’s preliminary valuation analysis with the Board. The representative from Baird reviewed for the Board the historical financial results for Sportsman’s Warehouse and the DCF Projections. The representative from Baird reviewed the adjustments that had been made to the Three Year Management Projections in order to prepare the DCF Projections. The representative from Baird then summarized the three valuation methodologies used by Baird in its analysis (selected transaction analysis, selected public company analysis and discounted cash flow analysis) and the results derived from such analyses. The Board asked the representative of Baird various questions regarding its preliminary valuation analysis, including the various methodologies used, and a discussion ensued. After this discussion, Mr. Barker summarized for the Board his communications with Great Outdoors Group, including his December 1, 2020 telephonic discussion with Mr. Morris and the December 1 letter. At the request of the Board, a representative from Baird then summarized recent discussions between the representatives of Baird and JPMorgan, including the telephonic meeting between representatives of Baird and JPMorgan prior to the Board meeting on December 3, 2020. The Board asked questions of the representative of Baird regarding this meeting, and a discussion ensued regarding the latest offer presented in the December 1 letter. In evaluating such offer, the Board discussed various factors, including (i) the public market’s reaction to Sportsman’s Warehouse’s December 2, 2020 earnings announcement and the decline of the trading price of the common stock despite announcing record results, (ii) the competitive market environment and certain other macroeconomic factors, including the COVID-19 pandemic and the impending change in the United States presidential administration, and (iii) Sportsman’s Warehouse’s historical stock prices. The Board then expressed its view that it was highly unlikely that any other party would be prepared to acquire Sportsman’s Warehouse at a per share offer price that would be competitive with Great Outdoors Group’s $19.50 offer. The Board then discussed potential responses to the December 1 letter, including the amount and manner of any counterproposal. The Board also asked questions of O’Melveny regarding the Board’s fiduciary duties, and a representative from O’Melveny provided an overview of the Board’s duties and the various steps taken by the Board to comply with such duties to date. After this discussion, the Board unanimously authorized
 
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and instructed Mr. Barker and Mr. Schneider to call Mr. Morris and request a $20.00 per share offer price. The Board also unanimously delegated to Mr. Barker and Mr. Schneider the authority to agree to continue transaction discussions with Great Outdoors Group for a per share offer price of $19.50 or greater. The Board also instructed Mr. Barker and Mr. Schneider to express to Mr. Morris the importance to the Board of certainty of closing if the parties enter into a transaction.
Later on December 3, 2020, Mr. Barker and Mr. Schneider had a telephone call with senior management of Great Outdoors Group to discuss the offer contained in the December 1 letter. As instructed by the Board, Mr. Barker and Mr. Schneider requested a $20.00 per share offer price from Great Outdoors Group; however, Mr. Morris indicated that Great Outdoors Group would not increase its offer above $19.50 per share. Mr. Barker and Mr. Schneider then confirmed that Sportsman’s Warehouse would continue transaction discussions with Great Outdoors Group on the basis of a $19.50 per share offer price.
On December 4, 2020, representatives from O’Melveny delivered the draft merger agreement regarding Great Outdoors Group’s potential acquisition of Sportsman’s Warehouse to representatives from King & Spalding. The draft merger agreement, among other things, included a “go-shop” provision, as well as terms that would (i) obligate the parties to take certain actions in order to obtain antitrust clearance for the potential transaction, (ii) allow Sportsman’s Warehouse and Great Outdoors Group to terminate the merger agreement under certain conditions, including upon certain breaches by the other party, (iii) require Sportsman’s Warehouse to pay Great Outdoors Group a termination fee in certain circumstances, and (iv) qualify certain obligations of Great Outdoors Group and certain representations and warranties of Sportsman’s Warehouse by the non-occurrence of a material adverse effect on the financial condition, business, assets or results of operations of Sportsman’s Warehouse and its subsidiaries, taken as a whole.
On December 8, 2020, representatives from King & Spalding delivered a revised draft of the merger agreement to representatives from O’Melveny. The revised draft of the merger agreement, among other things, (i) removed the “go-shop” provision, (ii) increased the amount of termination fee Sportsman’s Warehouse would have to pay Great Outdoors Group in certain circumstances, (iii) limited the scope of actions Great Outdoors Group would be required to take in order to obtain antitrust clearance for the potential transaction, (iv) expanded the conditions under which Great Outdoors Group would be permitted to terminate the merger agreement for certain breaches by Sportsman’s Warehouse, (v) rejected certain exclusions to the definition of material adverse effect, and (vi) added a provision that would require Sportsman’s Warehouse to reimburse Great Outdoors Group’s expenses in the event stockholders of Sportsman’s Warehouse fail to approve the merger proposal.
Also on December 8, 2020, Sportsman’s Warehouse and Great Outdoors Group entered into a clean team agreement pursuant to which the parties agreed to restrict the availability of certain competitively sensitive information regarding Sportsman’s Warehouse provided in response to due diligence requests to a limited group of representatives from Great Outdoors Group.
On December 9, 2020, the Board held a special meeting, with Mr. Julian and representatives from each of O’Melveny and Baird also attending. At the request of the Board, a representative from O’Melveny reviewed for the Board the revised draft of the merger agreement that was delivered by representatives from King & Spalding on December 8, 2020. The representative from O’Melveny provided an overview of the substantive issues that remained open in the draft merger agreement, including whether a “go-shop” provision would be included, the amount of the termination fee Sportsman’s Warehouse would have to pay Great Outdoors Group in certain circumstances, the scope of actions Great Outdoors Group would be required to take in order to obtain antitrust clearance for the potential transaction, reimbursement of Great Outdoors Group’s expenses in the event stockholders of Sportsman’s Warehouse fail to approve the merger proposal, the conditions under which Great Outdoors Group would be permitted to terminate the merger agreement for certain breaches by Sportsman’s Warehouse, and the definition of material adverse effect in the merger agreement. The Board discussed each of these substantive points and at the conclusion of this discussion, the Board unanimously authorized O’Melveny to negotiate the terms of the merger agreement as it deemed appropriate and necessary, subject to the parameters on terms set by the Board during this discussion.
On December 10, 2020, representatives from O’Melveny and King & Spalding met telephonically to discuss the revised draft of the merger agreement delivered by representatives of King & Spalding on December 8, 2020. Later on December 10, 2020, representatives from O’Melveny delivered a revised draft of
 
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the merger agreement to representatives from King & Spalding. This revised draft, among other matters (i) accepted the removal of the “go-shop” provision, (ii) reduced the amount of the termination fee that would be payable by Sportsman’s Warehouse to Great Outdoors Group in certain circumstances, (iii) removed the requirement that Sportsman’s Warehouse reimburse Great Outdoors Group for certain of its expenses if stockholders of Sportsman’s Warehouse fail to approve the merger proposal, and (iv) made certain changes with respect to exclusions to the definition of material adverse effect.
On December 13, 2020, representatives from O’Melveny and King & Spalding met telephonically to discuss the revised draft of the merger agreement delivered by representatives of O’Melveny on December 10, 2020. Later on December 13, 2020, representatives from King & Spalding delivered a revised draft of the merger agreement to representatives from O’Melveny. This revised draft, among other matters (i) accepted the reduced termination fee payable by Sportsman’s Warehouse in certain circumstances proposed in the December 10, 2020 draft of the merger agreement, (ii) accepted removal of the requirement that Sportsman’s Warehouse reimburse Great Outdoors Group for certain of its expenses if stockholders of Sportsman’s Warehouse fail to approve the merger proposal, and (iii) rejected certain of the changes that had been proposed by O’Melveny with respect to exclusions to the definition of material adverse effect.
On December 15, 2020, representatives from O’Melveny and King & Spalding met telephonically to discuss the revised draft of the merger agreement delivered by representatives of King & Spalding on December 13, 2020.
On December 16, 2020, Mr. Barker and Mr. Schneider had a telephone call with senior management of Great Outdoors Group to discuss the potential transaction. Senior management of Great Outdoors Group informed Mr. Barker and Mr. Schneider that Great Outdoors Group was reducing its per share offer price from $19.50 to $18.00. Great Outdoors Group provided three reasons for the reduction in the offer price: (i) Sportsman’s Warehouse’s plan to enter into a lease for a second distribution center (which Great Outdoors Group stated would further increase the geographical imbalance Great Outdoors Group has due to its existing distribution centers); (ii) the uncertainty surrounding the current political environment in the United States; and (iii) the amount of cash funding that Great Outdoors Group believes will be necessary to replenish Sportsman’s Warehouse’s inventory and for other working capital requirements. Great Outdoors Group further indicated that in connection with the reduction of the offer price, Great Outdoors Group would be prepared to agree to the inclusion of a “go-shop” provision in the merger agreement. Mr. Barker and Mr. Schneider expressed their disappointment at the reduction of the offer price and noted they would review the revised offer price with the Board.
On December 18, 2020, Mr. Schneider had a telephone call with Mr. Morris, Mr. John Paul Morris and Mr. Maliszewski to discuss the potential transaction. Mr. Schneider noted that a meeting of the Board was scheduled for later on December 18, 2020, and asked if Great Outdoors Group would increase the per share offer price before the Board meeting. Mr. Morris indicated that Great Outdoors Group would consider Mr. Schneider’s request. After the conclusion of such call, Mr. Morris sent a message to Mr. Schneider noting that Great Outdoors Group was ready and willing to complete the transaction at the $18.00 per share offer price and would not increase the offer.
Later on December 18, 2020, the Board held a special meeting, with Mr. Julian and representatives from O’Melveny and Baird also attending. Mr. Schneider reviewed for the Board the recent reduction of Great Outdoors Group’s per share offer price from $19.50 to $18.00 and provided an update regarding his and Mr. Barker’s recent communications with Great Outdoors Group on December 16, 2020 and December 18, 2020. At the request of the Board, a representative from O’Melveny then reviewed for the Board their alternatives for responding to the revised offer, including accepting the offer, rejecting the offer and ceasing discussions, or continuing to further negotiate. The representative from O’Melveny also led a discussion regarding how the draft merger agreement should be revised to address the reduced offer price and recommended reinserting a “go-shop” provision, reducing the amount of termination fee Sportsman’s Warehouse would have to pay to Great Outdoors Group in certain circumstances, and using Sportsman’s Warehouse’s proposed definition of material adverse effect. At the request of the Board, a representative from Baird also discussed with the Board Baird’s preliminary valuation analysis. The Board then engaged in a discussion regarding various anticipated business opportunities and challenges for Sportsman’s Warehouse in the next few years, including (i) management’s expectation that financial results for fiscal years 2021 and 2022 would decrease as compared to the results for fiscal year 2020, (ii) the downward pressure
 
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on the trading price of the common stock due to the disfavored nature of the firearms industry among public investors, and (iii) other challenges generally experienced by publicly traded retailers. The Board also discussed the revised $18.00 per share offer price, including whether it should pursue further negotiations with Great Outdoors Group seeking to increase the offer price. After this discussion, the Board unanimously authorized Mr. Schneider and Mr. Barker to negotiate with Great Outdoors Group to reach a final agreement on the terms of the merger agreement at a price per share of no less than $18.00 in cash, and on other terms consistent with the recommendation of O’Melveny regarding the reinsertion of a “go-shop” provision, the reduction of certain termination fees that could be payable by Sportsman’s Warehouse and the revision of the definition of material adverse effect.
After the conclusion of the Board meeting on December 18, 2020, Mr. Schneider and Mr. Barker telephonically discussed the potential transaction with senior management of Great Outdoors Group. Mr. Schneider and Mr. Barker informed senior management of Great Outdoors Group that Sportsman’s Warehouse was willing to move forward with the revised offer price of $18.00 per share, on the understanding that the due diligence process was complete and the merger agreement would be revised to reinsert the “go-shop” provision, further reduce the termination fees that could be payable by Sportsman’s Warehouse and reinstate the definition of material adverse effect previously proposed by Sportsman’s Warehouse. Senior management of Great Outdoors Group noted that they understood the approach proposed by the Board and would do their best to operate within that framework, subject to input from Great Outdoors Group’s advisors. In addition, representatives from O’Melveny and King & Spalding met telephonically to discuss the merger agreement and the process for finalizing transaction documentation, and representatives from Baird and JPMorgan met telephonically to discuss the creditworthiness of Great Outdoors Group. Representatives from O’Melveny also delivered a revised draft of the merger agreement to representatives from King & Spalding. This revised draft, among other matters (i) reinserted the “go-shop” provision, (ii) further reduced the amount of termination fee Sportsman’s Warehouse would have to pay Great Outdoors Group in certain circumstances, and (iii) restored the Sportsman’s Warehouse preferred version of the definition of material adverse effect.
Later on December 18, 2020, the Board held another special meeting, with representatives from each of O’Melveny and Baird also attending. Mr. Schneider provided an update to the Board regarding his and Mr. Barker’s conversation with senior management of Great Outdoors Group after the conclusion of the Board’s prior meeting on December 18, 2020. At the request of the Board, representatives from each of O’Melveny and Baird also updated the Board regarding their telephonic meetings with representatives from King & Spalding and JPMorgan, respectively, after the Board’s prior meeting. After these updates, a representative from O’Melveny led a discussion regarding next steps for the potential transaction, including the negotiation of the final transaction documentation and the anticipated announcement of the transaction in the afternoon of December 21, 2020. The Board agreed to hold another meeting in the afternoon of December 21, 2020 in anticipation of being able to review and approve an execution copy of the proposed merger agreement.
On December 19, 2020, Mr. Barker met telephonically with Mr. Maliszewski to discuss the revised draft of the merger agreement delivered by representatives from O’Melveny on December 18, 2020 and certain diligence matters. Also on December 19, 2020, representatives from King & Spalding delivered a revised draft of the merger agreement to representatives from O’Melveny, which revised draft accepted the Sportsman’s Warehouse position on the key open points, but included certain requests from Great Outdoors Group with respect to the interim operating period between the date of the merger agreement and effective time (or the earlier valid termination of the merger agreement pursuant to its terms). Representatives from O’Melveny and King & Spalding then met telephonically to discuss such revised draft of the merger agreement. Following the conclusion of such discussion, representatives from O’Melveny delivered a further revised draft of the merger agreement to representatives from King & Spalding, which, with certain modifications, accepted the revisions proposed by King & Spalding.
On December 21, 2020, the Board held a special meeting, with representatives from each of O’Melveny and Baird also attending. Mr. Barker provided a summary of negotiations regarding the merger agreement since the last meeting of the Board and confirmed that material provisions of the merger agreement had been successfully negotiated in accordance with the instructions provided by the Board. At the request of the Board, a representative from O’Melveny then provided a presentation summarizing the material terms of the
 
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merger agreement, including the contemplated consideration, closing conditions, representations and warranties, interim operating covenants, certain deal-protection terms, termination provisions and terms related to employment matters. The Board asked questions of O’Melveny, and the representative from O’Melveny provided responses to such inquiries. After this presentation, a representative from Baird presented its valuation analysis. The representatives of Baird presented their financial analysis with respect to the merger consideration in the merger pursuant to the merger agreement and rendered the oral opinion of Baird to the Board (in its capacity as such), to the effect that, as of December 21, 2020 and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of the review undertaken by Baird as set forth in its opinion, the merger consideration to be received by the holders of our common stock (other than Great Outdoors Group and its affiliates or those holding excluded shares or dissenting shares) in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders. See “— Opinion of Robert W. Baird & Co. Incorporated” beginning on page 57. Following this presentation, the Board discussed and considered various factors that impacted its evaluation and decision regarding the proposed transaction, including the material factors set forth below in the section entitled “— Reasons for the Merger; Recommendation of the Board” beginning on page 44. After discussion among the directors, the Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interest of the Sportsman’s Warehouse’s stockholders, (ii) approved and declared advisable the merger agreement and the transactions contemplated thereby, (iii) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (iv) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders.
Following the closing of the financial markets in the United States on December 21, 2020, Sportsman’s Warehouse, Great Outdoors Group and Merger Sub entered into the merger agreement and issued a joint press release announcing the proposed merger.
On December 23, 2020, the Board held a special meeting, with representatives from each of O’Melveny and Baird also attending. At the request of the Board, a representative from Baird discussed with the Board the “go-shop” process. As part of the discussion, the representative from Baird reviewed for the Board a list of 39 potential buyers to contact as a part of the “go-shop” process, including eight potential strategic buyers, 19 financial sponsors, and 11 family offices. The representative from Baird also explained the proposed timing and process for contacting such potential buyers, entering into acceptable confidentiality agreements with any interested parties, and providing such parties access to confidential information of Sportsman’s Warehouse. The Board then unanimously authorized Baird to proceed with the “go-shop” process, including reaching out to the 39 potential buyers identified by representatives of Baird.
Following such authorization from the Board and beginning on December 28, 2020, representatives from Baird contacted the 39 potential buyers approved by the Board to determine whether they might be interested in pursuing a transaction that would be superior to the proposed merger.
On January 8, 2021, the Board held a special meeting with representatives from each of O’Melveny and Baird also attending. At the request of the Board, a representative from Baird provided an update on the “go-shop” process. The representative from Baird noted that out of the 39 potential buyers contacted, 33 had advised representatives of Baird that they were not interested in pursuing further discussions regarding a transaction. Of the remaining six potential buyers, two strategic parties had advised representatives of Baird that they were continuing to review publicly available information in order to determine if they wished to enter into a confidentiality agreement with Sportsman’s Warehouse and pursue further discussions, and the remaining four potential buyers had not yet advised representatives of Baird as to whether they were interested in pursuing further discussions regarding a transaction.
On January 13, 2021, a potential strategic buyer who had indicated interest in potentially pursuing a transaction (which we refer to as “Party A”) entered into a confidentiality agreement with Sportsman’s Warehouse that provided Sportsman’s Warehouse with substantially similar protections as the Great Outdoors Group confidentiality agreement, except that the confidentiality agreement with Party A did not contain a standstill obligation. Following execution of such confidentiality agreement, Party A was provided access to an electronic data room containing certain of the nonpublic information regarding Sportsman’s Warehouse that had been previously made available to Great Outdoors Group.
 
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On January 20, 2021, Party A advised representatives of Baird that it had reviewed the information made available to it, and upon its own analysis and consideration, determined that it would not develop a bid for Sportsman’s Warehouse’s business which is superior to the proposed merger.
As of 11:59 p.m. New York City time on January 31, 2021 (the end of the go-shop period under the merger agreement), all 39 of the potential buyers who had been contacted by representatives of Baird had advised representatives of Baird that they were not interested in pursuing discussions regarding a transaction with Sportsman’s Warehouse that would be superior to the proposed merger. Aside from the 39 potential buyers contacted by representatives of Baird, no other potential buyers contacted Baird or Sportsman’s Warehouse during the go-shop period to express an interest in pursuing discussions regarding a transaction with Sportsman’s Warehouse that would be superior to the proposed merger.
Reasons for the Merger; Recommendation of the Board
The Board recommends that you vote “FOR” the merger proposal.
The Board held numerous meetings at which the business strategies, opportunities and challenges of Sportsman’s Warehouse were evaluated and potential strategic alternatives, including a sale of Sportsman’s Warehouse, were considered.
At a meeting held on December 21, 2020, after careful consideration, the Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interest of the Sportsman’s Warehouse’s stockholders, (ii) approved and declared advisable the merger agreement and the transactions contemplated thereby, (iii) directed that the merger agreement be submitted to Sportsman’s Warehouse’s stockholders to be adopted and approved, and (iv) resolved, subject to certain provisions of the merger agreement, to recommend the adoption and approval of the merger agreement by Sportsman’s Warehouse’s stockholders.
In evaluating and reaching its decision, the Board consulted with senior management and the representatives of each of O’Melveny and Baird at various times and considered a number of factors, including the following material factors (not in any relative order of importance) that the Board believes support its decision to approve the merger and adopt the merger agreement:

historical information regarding (i) Sportsman’s Warehouse’s business, financial performance and results of operations, (ii) market prices, volatility and trading activity with respect to Sportsman’s Warehouse’s common stock, and (iii) market prices with respect to other industry participants and general market indices;

current information regarding (i) Sportsman’s Warehouse’s business, prospects, financial condition, operations, technology, products, services, management, competitive position and strategic business goals and objectives, including the DCF Projections provided by management to the Board and to Baird, and (ii) general economic, industry and financial market conditions;

the prospects and likelihood of realizing superior benefits through remaining an independent company, and the risks associated with remaining an independent company;

the relative confidence of the Board in the ability of Sportsman’s Warehouse to achieve its projected financial performance;

the anticipated reduction in revenue and profitability in fiscal year 2021 (as compared to the revenue and profitability levels in fiscal year 2020), which reflects a return closer to historical trends of the business of Sportsman’s Warehouse, as management believes Sportsman’s Warehouse’s performance in fiscal 2020 benefited from a significantly increased demand for the products it sells, due in part to the COVID-19 pandemic, social unrest and the presidential election;

the fact that the consideration payable under the merger agreement is all cash, which provides certainty of value, while eliminating the effect of long-term business and execution risk to Sportsman’s Warehouse’s stockholders, compared to continuing to operate Sportsman’s Warehouse as an independent entity;
 
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the financial analysis prepared by Baird and the opinion delivered to the Board (in its capacity as such) by Baird on December 21, 2020, and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken by Baird in preparing the opinion, as to the fairness, from a financial point of view, of the merger consideration to be received by the holders of our common stock (other than Great Outdoors Group and its affiliates or those holding excluded shares or dissenting shares) in the merger pursuant to the merger agreement to such holders, as more fully described below in the section titled “— Opinion of Robert W. Baird & Co. Incorporated” beginning on page 57;

the timing of the merger and the risk that if Sportsman’s Warehouse does not accept Great Outdoors Group’s offer now, it may not have another opportunity to do so or to pursue an opportunity offering at least as much value to Sportsman’s Warehouse’s stockholders;

that the number of potential acquirers (both strategic and financial) may be limited by the willingness of such potential acquirers to engage in certain of Sportsman’s Warehouse’s lines of business, including the sale of firearms and ammunition;

that potential strategic acquirers may not have the ability or capacity at this time to acquire Sportsman’s Warehouse as a result of the strain that the COVID-19 pandemic has had on the retail industry generally;

that potential financial acquirers and family office acquirers would have to incur significant indebtedness, and would potentially have to make significant equity investments, to acquire Sportsman’s Warehouse at a price that would be competitive to the price offered by Great Outdoors Group;

Sportsman’s Warehouse’s right under the merger agreement during the go-shop period, which began on the date of the merger agreement and continued until January 31, 2021, to solicit, initiate, propose, or induce the making, submission or announcement of, or encourage, facilitate or assist any acquisition proposal from third parties, including by providing third parties with nonpublic information pursuant to acceptable confidentiality agreements, and to engage in or enter into, continue or otherwise participate in discussions and negotiations with any third party in connection with any acquisition proposal;

Sportsman’s Warehouse’s ability to continue discussions after the end of the go-shop period until February 20, 2021 with any excluded party from which Sportsman’s Warehouse received during the go-shop period an acquisition proposal that the Board determines in good faith (with such determination to be made prior to the expiration of the go-shop period and after consultation with its outside legal counsel and financial advisor) constitutes or would be reasonably be expected to lead to a superior proposal, except for such acquisition proposals that are thereafter withdrawn or terminated or modified in any material respect such that such acquisition proposal would no longer constitute or reasonably be expected to lead to a superior proposal;

the Board’s right, under certain circumstances, to make an adverse recommendation change;

that a HSR notification form will be required to be filed with the Antitrust Division and the FTC and that, under the merger agreement, Great Outdoors Group is required to (i) use reasonable best efforts to take any and all action necessary to ensure that no governmental authority prohibits the consummation of the merger, except that Great Outdoors Group is not obligated to consent to any divestitures or other structural or conduct relief with respect to Great Outdoors Group’s or Sportsman’s Warehouse’s assets or business in order to obtain clearance from any such governmental authority and (ii) not take any action if such action would make it materially more likely that there would arise impediments under antitrust laws that may be asserted by a governmental authority to consummate the merger as soon as practicable;

Sportsman’s Warehouse’s ability to obtain specific performance to require Great Outdoors Group and the Merger Sub to perform their respective obligations under the merger agreement;

the fact that if Great Outdoors Group or Sportsman’s Warehouse terminates the merger agreement in connection with an order, decision or judgment that restrains the proposed merger in connection with any antitrust law or if antitrust clearance of the transaction is not obtained prior to the end
 
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date, then Great Outdoors Group may be required to pay Sportsman’s Warehouse a termination fee equal to $55,000,000;

the fact that (i) Great Outdoors Group is representing to Sportsman’s Warehouse in the merger agreement that as of the date of the merger agreement and at all times until the effective time it has and will have sufficient funds to pay the merger consideration, and (ii) Great Outdoors Group’s obligation to complete the merger and pay the merger consideration is not conditioned on Great Outdoors Group obtaining financing;

the fact that Great Outdoors Group has a track record of completing acquisition transactions without undue delay; and

the availability of appraisal rights to Sportsman’s Warehouse stockholders in connection with the merger.
The Board also considered the following potentially negative factors in its deliberations concerning the merger agreement and the merger:

the fact that Sportsman’s Warehouse did not conduct an auction process for a sale of Sportsman’s Warehouse or a limited pre-signing market check with respect to Sportsman’s Warehouse, which the Board determined to forgo for various reasons including (i) the potential that the negotiations with Great Outdoors Group would be negatively impacted by an auction process or a limited pre-signing market check if an alternative proposal from a third party was not received by Sportsman’s Warehouse, (ii) that Great Outdoors Group had informed Sportsman’s Warehouse, and JPMorgan had informed representatives of Baird, that Great Outdoors Group may not participate in an auction process if the Board determined to conduct such a process, and (iii) that an auction process or even a limited pre-signing market check increases the likelihood of leaks and rumors, which could damage Sportsman’s Warehouse’s business and cause Great Outdoors Group to determine not to continue to pursue an acquisition of Sportsman’s Warehouse;

that, under certain circumstances, the merger agreement permits Sportsman’s Warehouse to terminate the merger agreement in order to enter into a definitive agreement to effect a superior proposal with any third party, subject to paying to Great Outdoors Group a termination fee equal to (i) $9,000,000 if the merger agreement is terminated prior to the expiration of the go-shop period or, with respect to a superior proposal made by an excluded party, prior to February 20, 2021 or (ii) $23,000,000 in such other circumstances when the merger agreement is terminated to enter into a definitive agreement to effect a superior proposal with a third party, which permits Sportsman’s Warehouse to have a post-signing market check, but the termination fee could also discourage the making of an acquisition proposal or adversely impact the price offered in such an acquisition proposal;

that the merger agreement obligates Sportsman’s Warehouse to pay Great Outdoors Group a termination fee equal to $23,000,000 (i) if Great Outdoors Group terminates the merger agreement in connection with an adverse recommendation change by the Board or (ii) in certain other specified situations;

the fact that Sportsman’s Warehouse will no longer exist as an independent public company and Sportsman’s Warehouse’s stockholders will forego any future increase in its value as an independent public company that might result from its possible growth;

the possible negative effects of the merger and public announcement of the merger on Sportsman’s Warehouse’s financial performance, operating results and stock price and Sportsman’s Warehouse’s relationships with customers, suppliers, other business partners, management and employees;

the fact that, from and after January 31, 2021 (or February 20, 2021, with respect to excluded parties), the merger agreement precludes Sportsman’s Warehouse from (i) soliciting, initiating, or knowingly encouraging or knowingly facilitating, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal and (ii) engaging in, continuing or otherwise participating in any discussions or negotiations regarding, or furnishing to any other third party any information in connection with or for the purpose of knowingly encouraging or knowingly facilitating, any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal;
 
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that, after February 20, 2021, with respect to excluded parties, the merger agreement precludes Sportsman’s Warehouse from soliciting, initiating, or knowingly encouraging or knowingly facilitating, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal, but Sportsman’s Warehouse can continue to (i) provide excluded parties with nonpublic information pursuant to acceptable confidentiality agreements and (ii) engage in or enter into, continue or otherwise participate in discussions and negotiations with any excluded party in connection with any acquisition proposal, in each case, until obtaining approval of the merger proposal from the stockholders of Sportsman’s Warehouse;

the fact that the merger agreement imposes restrictions on the conduct of Sportsman’s Warehouse’s business in the pre-closing period, which may adversely affect Sportsman’s Warehouse’s business in the event the merger is not completed (including by delaying or preventing Sportsman’s Warehouse from pursuing business opportunities that may arise or precluding actions that would be advisable if Sportsman’s Warehouse were to remain an independent company);

the risks involved with the merger and the likelihood that Sportsman’s Warehouse and Great Outdoors Group will be able to complete the merger, the possibility that the merger might not be consummated (including because of failure to obtain the required regulatory clearance) and Sportsman’s Warehouse’s prospects going forward in the event the merger agreement is terminated;

the fact that the consideration to be received by Sportsman’s Warehouse’s stockholders in the merger will be taxable for U.S. federal income tax purposes;

the substantial transaction expenses to be incurred in connection with the merger and the negative impact of such expenses on Sportsman’s Warehouse’s cash reserves and operating results should the merger not be completed; and

all known interests of directors and executive officers of Sportsman’s Warehouse in the merger that may be different from, or in addition to, their interests as Sportsman’s Warehouse stockholders or the interests of Sportsman’s Warehouse’s other stockholders generally.
The foregoing discussion summarizes the material factors considered by the Board, but is not intended to be exhaustive. In light of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. Moreover, each member of the Board applied his or her own business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination and recommendation. The Board based its recommendation on the totality of the information presented, including its discussions with, and questioning of, Sportsman’s Warehouse’s executive management and its financial advisor and outside legal counsel. This explanation of the reasoning of the Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 24.
Certain Company Forecasts
Although Sportsman’s Warehouse has publicly issued limited short-term guidance concerning certain aspects of its expected financial performance, it does not, as a matter of course, make public disclosure of detailed forecasts or projections of its expected financial performance for extended periods due to, among other things, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in response to a due diligence request by Great Outdoors Group, representatives of Baird, at the direction of the Board and on behalf of Sportsman’s Warehouse, made available to Great Outdoors Group the Three Year Management Projections. In addition, as part of the “go-shop” process, representatives of Baird, at the direction of the Board and on behalf of Sportsman’s Warehouse, made the Three Year Management Projections available to Party A, which had expressed interest in a potential acquisition of Sportsman’s Warehouse and entered into a confidentiality agreement with Sportsman’s Warehouse.
Moreover, in order to prepare a set of projections that Baird could use for its analysis, management supplemented the Three Year Management Projections to include its projections of Sportsman’s Warehouse’s
 
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future financial performance for fiscal years 2024 and 2025 and to make the following adjustments: (i) normalizing Sportsman’s Warehouse’s financial results for the twelve months ended October 31, 2020 in order to address the unique business levels experienced during such period due to the COVID-19 pandemic, social unrest, the presidential election, and certain other national events in the United States; (ii) revising its calculations of Adjusted EBITDA to exclude certain pre-opening and stock compensation expenses; and (iii) providing its projection of Sportsman’s Warehouse’s unlevered free cash flow for fiscal years 2020 through 2025 (calculated by starting with Adjusted EBIT, applying the projected statutory tax rate, adding back depreciation and amortization, subtracting capital expenditures and making adjustments for changes in working capital), which adjusted projections are referred to as the DCF Projections.
A summary of the Three Year Management Projections is being included in this proxy statement because such projections were made available to the Board, Baird, Great Outdoors Group and Party A. A summary of the DCF Projections is being included in this proxy statement because such projections were made available to the Board and Baird, and management instructed representatives of Baird to use the DCF Projections for Baird’s analysis, which is described in the section entitled “— Opinion of Robert W. Baird & Co. Incorporated” beginning on page 57. We refer to the Three Year Management Projections and the DCF Projections collectively as the “Management Projections.” This information is not intended to influence your decision whether to vote for or against the merger proposal. The inclusion of this information should not be regarded as an indication that the Board, its advisors or any other person considered, or now considers, the Management Projections to be material or to be a reliable prediction of actual future results, and the Management Projections should not be relied upon as such. The Management Projections are subjective in many respects. There can be no assurance that the Management Projections will be realized or that actual results will not be significantly higher or lower than reflected in the Management Projections. The Management Projections cover multiple years and such information by its nature becomes subject to greater uncertainty with each successive year. As a result, the inclusion of the Management Projections in this proxy statement should not be relied on as necessarily predictive of actual future events.
The Management Projections were prepared on a stand-alone basis and do not take into account any of the transactions contemplated by the merger agreement, including the merger and associated expenses, or Sportsman’s Warehouse’s compliance with its covenants under the merger agreement. For these reasons and for the reasons described above, actual results likely will differ, and may differ materially, from those contained in the Management Projections.
The Management Projections were prepared by, and are the responsibility of, management for internal use and use by Baird (with the exception of the Three Year Management Projections, which were also made available to Great Outdoors Group and Party A as described above). The Management Projections were (i) used by Baird in its financial analyses undertaken in connection with rendering its opinion to the Board, (ii) not prepared for purposes of public disclosure, and (iii) not prepared on a basis designed to comply with published guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial data, published guidelines of the SEC (including those regarding forward-looking statements and the use of financial measures not recognized by generally accepted accounting principles in the United States (which we refer to as “GAAP”)) or GAAP. Neither Grant Thornton LLP, Sportsman’s Warehouse’s independent registered public accounting firm, nor KPMG LLP, Sportsman’s Warehouse’s previous independent registered public accounting firm, has audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Management Projections and, accordingly, neither Grant Thornton LLP nor KPMG LLP expresses an opinion or any other form of assurance with respect thereto. The KPMG LLP report incorporated by reference in this proxy statement relates to Sportsman’s Warehouse’s previously issued financial statements. It does not extend to the Management Projections and should not be read to do so. In addition, as described in further detail below, the Management Projections include certain financial measures that are not recognized by GAAP (which we refer to as “non-GAAP financial measures”). Non-GAAP financial measures are not prepared in accordance with GAAP and should be considered as a supplement to, and not a substitute for, or as superior to, the corresponding measures calculated in accordance with GAAP.
Although the Management Projections summarized below are presented with numerical specificity, they are estimates of future performance and not historical facts. The Management Projections were based on numerous variables and assumptions that were deemed to be reasonable as of the respective dates when
 
48

 
such projections were finalized. Realization of such assumptions is inherently uncertain and may be beyond the control of Sportsman’s Warehouse. Important factors that may affect actual results and cause the Management Projections not to be achieved include, but are not limited to, risks and uncertainties relating to Sportsman’s Warehouse’s business (including, without limitation, risks relating to the proposed merger; competition; customer, supplier and other business partner risks; economic and market conditions; and changes in consumer demands; and other factors described or referenced under “Cautionary Statement Regarding Forward — Looking Statements” beginning on page 24). In the view of management, the Management Projections had been reasonably prepared on a basis reflecting the best estimates then available and judgments of management of the future financial performance of Sportsman’s Warehouse and other matters covered thereby. In addition, the assumptions underlying the Management Projections are subject to change and have not been revised since their preparation to reflect any changes in Sportsman’s Warehouse’s business, industry performance, the legal or regulatory environment, general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated as the Management Projections were prepared. Neither Sportsman’s Warehouse nor Great Outdoors Group undertakes any obligation, except as required by law, to update or otherwise revise the Management Projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error or to not be appropriate, or to reflect changes in Sportsman’s Warehouse’s business, industry performance, the legal or regulatory environment, or general business or economic conditions. There can be no assurance that the Management Projections will be realized or that Sportsman’s Warehouse’s future financial results will not materially vary from the Management Projections.
Three Year Management Projections
The following is a summary of the Three Year Management Projections prepared by management and provided to the Board, Baird, Great Outdoors Group, and Party A.
Fiscal Year
(in millions, except per share amounts and percentages)(1)
2020E
2021P
2022P
2023P
Revenue
$ 1,390.0 $  1,215.0 $ 1,315.0 $ 1,415.0
% Growth
56.8%
(12.6)%
8.2%
7.6%
Gross Profit
$ 449.9 $ 411.2 $ 445.6 $ 481.7
% of Revenue
32.4%
33.8%
33.9%
34.0%
Selling, general and administrative expense
$ 340.0 $ 348.7 $ 376.1 $ 402.6
% of Revenue
24.5%
28.7%
28.6%
28.5%
EBIT
$ 109.9 $ 62.5 $ 69.6 $ 79.1
% of Revenue
7.9%
5.1%
5.3%
5.6%
Depreciation and Amortization
$ 22.2 $ 23.2 $ 26.1 $ 27.9
EBITDA
$ 132.1 $ 85.7 $ 95.7 $ 107.0
% of Revenue
9.5%
7.0%
7.3%
7.6%
Pre-opening Expenses
$ 1.8 $ 3.0 $ 3.3 $ 3.3
Stock-based Compensation Expense
$ 3.5 $ 3.3 $ 3.3 $ 3.3
Management Adjustments
$ 8.1
Adjusted EBITDA
$ 144.7 $ 92.0 $ 102.3 $ 113.6
% of Revenue
10.4%
7.6%
7.8%
8.0%
Income Tax Provision
$ 27.7 $ 16.5 $ 18.3 $ 21.0
Interest Expense
$ 3.6 $ 1.5 $ 1.8 $ 1.2
Other Expense / (Income)
$ (4.0)
Net Income
$ 82.5 $ 44.5 $ 49.5 $ 56.9
EPS
$ 1.90 $ 1.01 $ 1.11 $ 1.26
 
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Fiscal Year
(in millions, except per share amounts and percentages)(1)
2020E
2021P
2022P
2023P
Adjusted Net Income
$ 84.5 $ 44.5 $ 49.5 $ 56.9
Adjusted EPS
$ 1.90 $ 1.00 $ 1.10 $ 1.25
Weighted Average Shares Outstanding — Basic
43.5 44.0 44.5 45.0
Adjusted Weighted Average Shares Outstanding(2)
44.3 44.5 45.0 45.5
(1)
The Three Year Management Projections include non-GAAP financial measures. For information about these non-GAAP financial measures, please see the information in the section entitled “—Reconciliation of Non-GAAP Financial Measures” beginning on page 52.
(2)
Adjusted Weighted Average Shares Outstanding was calculated by starting with basic weighted average shares outstanding and adding the projected dilutive effect of the shares of our common stock underlying outstanding equity awards that have not vested.
DCF Projections
The following is a summary of the DCF Projections prepared by management and provided to the Board and to the representatives from Baird for Baird to use in its analysis, which is described in the section entitled “— Opinion of Robert W. Baird & Co. Incorporated” beginning on page 57.
Fiscal Year
(in millions, except per share
amounts and percentages)(1)
Normalized
LTM ended
10/31/2020(2)
2020E
2021P
2022P
2023P
2024P
2025P
Revenue
$ 1,054.2 $ 1,390.0 $  1,215.0 $ 1,315.0 $ 1,415.0 $ 1,530.0 $ 1,655.0
% Growth
21.0%
56.8%
(12.6)%
8.2%
7.6%
8.1%
8.2%
Gross Profit
$ 449.9 $ 411.2 $ 445.6 $ 481.7 $ 522.3 $ 566.7
% of Revenue
32.4%
33.8%
33.9%
34.0%
34.1%
34.2%
Selling, general and administrative
expense
$ 340.0 $ 348.7 $ 376.1 $ 402.6 $ 434.2 $ 468.4
% of Revenue
24.5%
28.7%
28.6%
28.5%
28.4%
28.3%
EBIT
$ 109.9 $ 62.5 $ 69.6 $ 79.1 $ 88.1 $ 98.3
% of Revenue
7.9%
5.1%
5.3%
5.6%
5.8%
5.9%
Depreciation and Amortization $ 22.2 $ 23.2 $ 26.1 $ 27.9 $ 29.7 $ 31.5
EBITDA
$ 132.1 $ 85.7 $ 95.7 $ 107.0 $ 117.8 $ 129.8
% of Revenue
9.5%
7.0%
7.3%
7.6%
7.7%
7.8%
Management
Adjustments
$ 7.3
Adjusted EBITDA
$ 74.3 $ 139.4 $ 85.7 $ 95.7 $ 107.0 $ 117.8 $ 129.8
% of Revenue
7.0%
10.0%
7.0%
7.3%
7.6%
7.7%
7.8%
Income Tax Provision
$ 27.6 $ 16.3 $ 18.1 $ 20.8 $ 23.4 $ 26.2
Interest Expense
$ 3.6 $ 1.5 $ 1.8 $ 1.2 $ 0.4
Other Expense /
(Income)
$ (4.0)
Net Income
$ 82.6 $ 44.7 $ 49.7 $ 57.1 $ 64.3 $ 72.1
EPS
$ 1.90 $ 1.01 $ 1.12 $ 1.27 $ 1.41 $ 1.57
Adjusted Net Income
$ 38.7 $ 84.5 $ 44.7 $ 49.7 $ 57.1 $ 64.3 $ 72.1
 
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Fiscal Year
(in millions, except per share
amounts and percentages)(1)
Normalized
LTM ended
10/31/2020(2)
2020E
2021P
2022P
2023P
2024P
2025P
Adjusted EPS
$ 1.90 $ 1.00 $ 1.10 $ 1.26 $ 1.40 $ 1.55
Weighted Average Shares
Outstanding – Basic
43.5 44.0 44.5 45.0 45.5 46.0
Adjusted Weighted Average Shares Outstanding(3) 44.3 44.5 45.0 45.5 46.0 46.5
(1)
The DCF Projections include non-GAAP financial measures. For information about these non-GAAP financial measures, please see the information in the section entitled “— Reconciliation of Non-GAAP Financial Measures” beginning on page 52.
(2)
Normalized adjusted EBITDA and adjusted Net Income for the last twelve months (“LTM”) ended October 31, 2020 were calculated using an average of revenues for LTM ended October 31, 2019 and projected revenues for the LTM ending October 31, 2021, and then applying the EBITDA and Net Income margins used in the DCF Projections for fiscal year 2021.
(3)
Adjusted Weighted Average Shares Outstanding was calculated by starting with basic weighted average shares outstanding and adding the projected dilutive effect of the shares of our common stock underlying outstanding equity awards that have not vested.
Fiscal Year
(in millions, except percentages)
Q4 2020E(1)
2021P
2022P
2023P
2024P
2025P
EBIT
$   26.5 $   62.5 $   69.6 $   79.1 $   88.1 $   98.3
Tax Rate(2)
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
Tax-affected EBIT
$ 19.4 $ 45.8 $ 51.0 $ 58.0 $ 64.6 $ 72.1
Depreciation and Amortization
$ 5.4 $ 23.2 $ 26.1 $ 27.9 $ 29.7 $ 31.5
Decrease / (Increase) in Working Capital(3)
$ (11.3) $ (77.5) $ (4.3) $ (2.8) $ (4.8) $ (5.4)
Capital Expenditures(4)
$ (0.6) $ (46.8) $ (44.4) $ (43.8) $ (47.4) $ (47.9)
Unlevered Free Cash Flow
$ 12.9 $ (55.3) $ 28.4 $ 39.3 $ 42.1 $ 50.2
(1)
Projections of EBIT, depreciation and amortization, and capital expenditures set forth above for the fourth quarter of fiscal year 2020 were calculated by starting with management’s projections of such financial measures for fiscal year 2020 and deducting from each such financial measure the corresponding measure with respect to the actual financial results achieved by Sportsman’s Warehouse for the first three fiscal quarters of fiscal year 2020. In addition, the projection of the increase in the net working capital of Sportsman’s Warehouse for the fourth quarter of fiscal year 2020 was calculated by deducting the actual change in the net working capital of Sportsman’s Warehouse through the third quarter of fiscal year 2020 from the amount of change projected by management for all of fiscal year 2020.
(2)
Management assumed a tax rate of 26.7% for each period covered by these projections based on its expectation of the statutory tax rate applicable to Sportsman’s Warehouse for its fiscal year 2020, excluding the impact of any credits, deductions or other adjustments.
(3)
Management projected the amount of decrease or increase in Sportsman’s Warehouse’s working capital for each period covered by these projections based on the changes in net working capital management anticipates for such period in order to support the activity contemplated by the overall DCF Projections.
(4)
Management projected the amount of capital expenditures by Sportsman’s Warehouse for each period covered by these projections based on the amount of capital expenditures management anticipated for each such period in order to support the activity contemplated by the overall DCF Projections.
 
51

 
Reconciliation of Non-GAAP Financial Measures
Certain of the financial measures set forth in the Management Projections summarized above are non-GAAP financial measures, including EBIT, EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS.

“EBIT” is a non-GAAP financial measure known as earnings before interest and taxes, calculated by starting with net income, adding back interest expenses and income tax expenses, and then deducting the excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.

“EBITDA” is a non-GAAP financial measure known as earnings before interest, taxes, depreciation and amortization, calculated by starting with EBIT and adding back depreciation and amortization (without adding back any duplicative amounts, such as amortization of acquired intangibles).

“Adjusted EBITDA” is a non-GAAP financial measure calculated in the DCF Projections by starting with EBITDA and adding back (i) certain expenses incurred relating to the acquisition of Field & Stream store locations, (ii) expenses incurred relating to bonuses and increased wages paid to front-line and non-executive back office associates due to the COVID-19 pandemic, (iii) costs and impairments recorded relating to the closure of one store during the first quarter of fiscal year 2020, and (iv) accruals relating to pending labor litigation in the State of California. With respect to the Three Year Management Projections, Adjusted EBITDA was calculated by starting with EBITDA, adding back each of the items listed in clauses (i) through (iv) above, and then further adding back (x) non-cash expenses related to equity instruments granted to employees under our 2019 Performance Incentive Plan and employee stock purchase plan, and (y) pre-opening expenses, including expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but not including the cost of the initial inventory or capital expenditures required to open a location.

“Adjusted Net Income” is a non-GAAP financial measure calculated by starting with net income, adding back (i) certain expenses incurred relating to the acquisition of Field & Stream store locations, (ii) expenses incurred relating to bonuses and increased wages paid to front-line and non-executive back office associates due to the COVID-19 pandemic, (iii) costs and impairments recorded relating to the closure of one store during the first quarter of fiscal year 2020, and (iv) accruals relating to pending labor litigation in the State of California, and then deducting (x) the excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020 and (y) any tax benefit of the adjustments. For the projections for fiscal years 2021 through 2025, no items were added back to or deducted from net income to calculate adjusted net income. As a result, net income and adjusted net income are the same amount for those periods.

“Adjusted EPS” or Adjusted Earnings Per Share is a non-GAAP financial measure calculated by dividing (i) Adjusted Net Income by (ii) Adjusted Weighted Average Shares Outstanding. Adjusted Weighted Average Shares Outstanding is calculated by starting with basic weighted average shares outstanding and adding the dilutive effect of shares of our common stock underlying outstanding equity awards that have not vested.
We have reconciled certain of these non-GAAP financial measures used in each of the Management Projections with the most directly comparable GAAP financial measures below. Management believes that the non-GAAP financial measures not only provide it with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, the non-GAAP financial measures allow investors to better understand the performance of Sportsman’s Warehouse’s business and facilitate a more meaningful comparison of its earnings per share and actual results on a period-over-period basis. However, other companies in Sportsman’s Warehouse’s industries may calculate these items differently than Sportsman’s Warehouse does. In addition, each of these non-GAAP financial measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of Sportsman’s Warehouse’s results or projections as reported under GAAP. These limitations include
 
52

 
the failure to reflect our cash expenditures or future requirements for capital expenditures or contractual commitments. In evaluating these non-GAAP financial measures, you should be aware that, in the future, we will incur expenses that are the same as or similar to some of the adjustments reflected in their presentation, such as income tax expense (benefit), interest expense, depreciation and amortization and pre-opening expenses. Our presentation of non-GAAP financial measures should not be construed to imply that Sportsman’s Warehouse’s future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on financial measures of Sportsman’s Warehouse’s results prepared in accordance with GAAP, in addition to using the non-GAAP financial measures to supplement its analysis.
Three Year Management Projections
Reconciliation of Net Income to Adjusted Net Income:
Fiscal Year
(in millions)(1)
2020E
2021P
2022P
2023P
Net Income
$ 82.5 $ 44.5 $ 49.5 $ 56.9
Plus Acquisition Costs(2)
0.4
Plus Hazard Pay(3)
4.6
Plus Store Closing Write-Off(4)
1.0
Plus Legal Accrual(5)
2.0
Less Gain on Bargain Purchase(6)
(4.0)
Less Tax Benefit
(2.1)
Adjusted Net Income
$ 84.5 $ 44.5 $ 49.5 $ 56.9
(1)
The net income and Adjusted Net Income measures set forth in this table are used as the numerator for calculating the earnings per share and the Adjusted Earnings Per Share, respectively, set forth in the Three Year Management Projections.
(2)
Expenses incurred relating to the acquisition of Field & Stream store locations.
(3)
Expense incurred relating to bonuses and increased wages paid to front-line and non-executive back office associates due to COVID-19 pandemic.
(4)
Costs and impairments recorded relating to the closure of one store during the first quarter of fiscal year 2020.
(5)
Accruals relating to pending labor litigation in the State of California.
(6)
Excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.
Reconciliation of Weighted Average Shares Outstanding — Basic to Adjusted Weighted Average Shares Outstanding:
Fiscal Year
(in millions)(1)
2020E
2021P
2022P
2023P
Weighted Average Shares Outstanding – Basic
43.5 44.0 44.5 45.0
Plus Dilutive Effect of Unvested Shares
0.8 0.5 0.5 0.5
Adjusted Weighted Average Shares Outstanding
 44.3  44.5  45.0  45.5
(1)
The weighted average shares outstanding — basic and Adjusted Weighted Average Shares Outstanding measures set forth in this table are used as the denominator for calculating the earnings per share and the Adjusted Earnings Per Share, respectively, set forth in the Three Year Management Projections.
 
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Reconciliation of Earnings Per Share to Adjusted Earnings Per Share:
Fiscal Year
2020E
2021P
2022P
2023P
EPS
$ 1.90 $ 1.01 $ 1.11 $ 1.26
Less Impact of Adjustments to Numerator and Denominator
(0.01) (0.01) (0.01)
Adjusted EPS
$ 1.90 $   1.00 $   1.10 $   1.25
Reconciliation of Net Income to EBIT:
Fiscal Year
(in millions)
2020E
2021P
2022P
2023P
Net Income
$ 82.5 $ 44.5 $ 49.5 $ 56.9
Plus Interest Expense
3.6 1.5 1.8 1.2
Plus Income Tax Expense
27.7 16.5 18.3 21.0
Less Gain on Bargain Purchase(1)
(4.0)
EBIT
$ 109.9 $ 62.5 $ 69.6 $ 79.1
(1)
Excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.
Reconciliation of Net Income to EBITDA:
Fiscal Year
(in millions)
2020E
2021P
2022P
2023P
Net Income
$ 82.5 $ 44.5 $ 49.5 $ 56.9
Plus Interest Expense
3.6 1.5 1.8 1.2
Plus Income Tax Expense
27.7 16.5 18.3 21.0
Plus Depreciation and Amortization
22.2 23.2 26.1 27.9
Less Gain on Bargain Purchase(1)
(4.0)
EBITDA
$ 132.1 $ 85.7 $ 95.7 $ 107.0
(1)
Excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.
Reconciliation of Net Income to Adjusted EBITDA:
Fiscal Year
(in millions)
2020E
2021P
2022P
2023P
Net Income
$ 82.5 $ 44.5 $ 49.5 $ 56.9
Plus Interest Expense
3.6 1.5 1.8 1.2
Plus Income Tax Expense
27.7 16.5 18.3 21.0
Plus Depreciation and Amortization(1)
21.4 23.2 26.1 27.9
Plus Stock-based Compensation Expense(2)
3.5 3.3 3.3 3.3
Plus Pre-Opening Expenses(3)
1.8 3.0 3.3 3.3
Plus Acquisition Costs(4)
0.4
Plus Hazard Pay(5)
4.6
Plus Store Closing Write-Off(6)
1.0
 
54

 
Fiscal Year
(in millions)
2020E
2021P
2022P
2023P
Plus Legal Accrual(7)
2.1
Less Gain on Bargain Purchase(8)
(4.0)
Adjusted EBITDA
$ 144.7 $ 92.0 $ 102.3 $ 113.6
(1)
The projected depreciation and amortization amount for fiscal year 2020 in the reconciliations of net income to EBIT and EBITDA set forth above included approximately $0.8 million of depreciation and amortization attributable to the to the closure of one store during the first quarter of fiscal year 2020. In this reconciliation, such amount has been attributed to the Store Closing Write-Off financial measure for fiscal year 2020 and has been deducted from depreciation and amortization for fiscal year 2020 in order to avoid duplication.
(2)
Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2019 Performance Incentive Plan and employee stock purchase plan.
(3)
Pre-opening expenses include expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but do not include the cost of the initial inventory or capital expenditures required to open a location.
(4)
Expenses incurred relating to the acquisition of Field & Stream store locations.
(5)
Expense incurred relating to bonuses and increased wages paid to front-line and non-executive back office associates due to COVID-19 pandemic.
(6)
Costs and impairments recorded relating to the closure of one store during the first quarter of fiscal year 2020.
(7)
Accruals relating to pending labor litigation in the State of California.
(8)
Excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.
DCF Projections
Reconciliation of Net Income to Adjusted Net Income:
Fiscal Year
(in millions)(1)
2020E
2021P
2022P
2023P
2024P
2025P
Net Income
$ 82.6 $ 44.7 $ 49.7 $ 57.1 $ 64.3 $ 72.1
Plus Acquisition Costs(2)
0.4
Plus Hazard Pay(3)
4.6
Plus Store Closing Write-Off(4)
1.0
Plus Legal Accrual(5)
2.0
Less Gain on Bargain Purchase(6)
(4.0)
Less Tax Benefit
(2.1)
Adjusted Net Income
$ 84.5 $ 44.7 $ 49.7 $ 57.1 $ 64.3 $ 72.1
(1)
The net income and Adjusted Net Income measures set forth in this table are used as the numerator for calculating the earnings per share and the Adjusted Earnings Per Share, respectively, set forth in the DCF Projections.
(2)
Expenses incurred relating to the acquisition of Field & Stream store locations.
(3)
Expense incurred relating to bonuses and increased wages paid to front-line and non-executive back office associates due to COVID-19 pandemic.
(4)
Costs and impairments recorded relating to the closure of one store during the first quarter of fiscal year 2020.
 
55

 
(5)
Accruals relating to pending labor litigation in the State of California.
(6)
Excess of fair value over the purchase price of tangible assets acquired in connection with the Field & Stream store locations acquired during fiscal year 2020.
Reconciliation of Weighted Average Shares Outstanding — Basic to Adjusted Weighted Average Shares Outstanding:
Fiscal Year
(in millions)(1)
2020E
2021P
2022P
2023P
2024P
2025P
Weighted Average Shares Outstanding – Basic
43.5 44.0 44.5 45.0 45.5 46.0
Plus Dilutive Effect of Unvested Shares
0.8 0.5 0.5 0.5 0.5 0.5
Adjusted Weighted Average Shares Outstanding
 44.3  44.5  45.0  45.5  46.0  46.5
(1)
The weighted average shares outstanding — basic and Adjusted Weighted Average Shares Outstanding measures set forth in this table are used as the denominator for calculating the earnings per share and the Adjusted Earnings Per Share, respectively, set forth in the DCF Projections.
Reconciliation of Earnings Per Share to Adjusted Earnings Per Share:
Fiscal Year
2020E
2021P
2022P
2023P
2024P
2025P
EPS
$ 1.90 $ 1.01 $ 1.12 $ 1.27 $ 1.41 $ 1.57
Less Impact of Adjustments to Numerator and Denominator
0.00 (0.01) (0.02) (0.01) (0.01) (0.02)
Adjusted EPS
$ 1.90 $ 1.00 $ 1.10 $ 1.26 $ 1.40 $ 1.55
Reconciliation of Net Income to EBIT:
Fiscal Year
(in millions)
2020E
2021P
2022P
2023P
2024P
2025P
Net Income
$ 82.6 $ 44.7 $ 49.7 $ 57.1 $ 64.3 $ 72.1
Plus Interest Expense