<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Landair Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
<PAGE> 2
(LANDAIR CORPORATION LOGO)
April 20, 2000
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of Landair Corporation, you
are cordially invited to attend the Annual Meeting of Shareholders on Monday,
May 22, 2000, at 9:00 a.m., local time, at the General Morgan Inn & Conference
Center, 111 North Main Street, Greeneville, Tennessee.
YOUR VOTE IS IMPORTANT. Therefore, whether or not you plan to attend the meeting
in person, please complete, sign, date and return the enclosed proxy in the
envelope provided as promptly as possible. If you attend the meeting and desire
to vote in person, you may do so even though you have previously sent a proxy.
I hope you will be able to join us, and we look forward to seeing you in
Greeneville.
Sincerely yours,
/s/ Scott M. Niswonger
---------------------------
Scott M. Niswonger
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
LANDAIR CORPORATION
430 AIRPORT ROAD
GREENEVILLE, TENNESSEE 37745
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 2000
To the Shareholders of Landair Corporation:
The Annual Meeting of Shareholders of Landair Corporation (the "Company") will
be held on Monday, May 22, 2000, beginning at 9:00 a.m., local time, at the
General Morgan Inn & Conference Center, 111 North Main Street, Greeneville,
Tennessee.
Attendance at the Annual Meeting will be limited to shareholders, those holding
proxies from shareholders and representatives of the press and financial
community. If you wish to attend the meeting but your shares are held in the
name of a broker, trust, bank or other nominee, you should bring with you a
letter from the broker, trustee, bank or nominee confirming your beneficial
ownership of the shares.
The purposes of this meeting are:
1. To elect six members of the Board of Directors with terms expiring at
the next Annual Meeting of Shareholders in 2001;
2. To consider and vote upon a proposal to ratify the appointment of
Ernst & Young LLP as the independent auditors of the Company; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of the $0.01 par value common stock of the Company of record
at the close of business on March 17, 2000 are entitled to notice of and to vote
at the Annual Meeting. Shareholders are cordially invited to attend the meeting
in person.
SHAREHOLDERS ARE URGED TO EXECUTE THE ENCLOSED PROXY AND RETURN IT PROMPTLY,
WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING. ANY PROXY NOT DELIVERED AT THE
MEETING SHOULD BE MAILED TO REACH THE COMPANY'S PROXY TABULATOR, SUNTRUST BANK,
STOCK TRANSFER DEPARTMENT, P.O. BOX 4625, ATLANTA, GEORGIA 30302 BY 9:00 A.M. ON
MAY 19, 2000. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.
By Order of the Board of Directors,
/s/ Richard H. Roberts
-----------------------------------
Richard H. Roberts
Secretary
Greeneville, Tennessee
April 20, 2000
<PAGE> 4
LANDAIR CORPORATION
430 AIRPORT ROAD
GREENEVILLE, TENNESSEE 37745
(423) 636-7000
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the shareholders of Landair Corporation
(the "Company") in connection with the solicitation of proxies by the Board of
Directors (the "Board") for use at the Annual Meeting of Shareholders to be held
on Monday, May 22, 2000, beginning at 9:00 a.m., local time, at the General
Morgan Inn & Conference Center, 111 North Main Street, Greeneville, Tennessee
and any adjournment thereof, for the purposes set forth in the foregoing Notice
of Annual Meeting of Shareholders. This proxy material was first mailed to
shareholders on or about April 20, 2000.
If the enclosed form of proxy is executed and returned, it will be voted in
accordance with the instructions given, but may be revoked at any time insofar
as it has not been exercised by notifying the Secretary of the Company in
writing at the principal executive offices of the Company or by duly executing
and delivering a proxy bearing a later date. Each proxy will be voted FOR
Proposals 1 and 2 if no contrary instruction is indicated in the proxy, and in
the discretion of the proxies on any other matter which may properly come before
the shareholders at the Annual Meeting.
There were 6,003,648 shares of the $0.01 par value common stock of the Company
(the "Common Stock") issued and outstanding on March 17, 2000. A majority of
such shares, present or represented by proxy, will constitute a quorum.
Abstentions and broker non-votes will be counted as present for purposes of
determining a quorum on all matters. Abstentions and broker non-votes are not
treated as votes for or against the Proposals presented to the shareholders.
Because directors are elected by a plurality of the votes cast, abstentions are
not considered in the election. A "broker non-vote" occurs when a nominee
holding shares for a beneficial owner votes on one proposal, but does not vote
on another proposal because the nominee does not have discretionary voting power
and has not received instructions from the beneficial owner. Shareholders are
entitled to one vote for each share of Common Stock held of record at the close
of business on March 17, 2000.
The cost of solicitation of proxies will be borne by the Company, including
expenses in connection with preparing, assembling and mailing this Proxy
Statement. Such solicitation will be made by mail, and also may be made by the
Company's executive officers or employees personally. The Company does not
anticipate paying any compensation to any other party for this solicitation of
proxies, but may reimburse brokerage firms and others for their reasonable
expenses in forwarding solicitation material to beneficial owners.
<PAGE> 5
PROPOSAL 1 - ELECTION OF DIRECTORS
Six directors will be elected at the meeting, each to hold office until the next
Annual Meeting of Shareholders and until a successor has been duly elected and
qualified. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE SIX
NOMINEES NAMED BELOW. DULY EXECUTED PROXIES WILL BE SO VOTED UNLESS RECORD
HOLDERS SPECIFY A CONTRARY CHOICE ON THEIR PROXIES. If for any reason a nominee
is unable to serve as a director, it is intended that the proxies solicited
hereby will be voted for such substitute nominee as the Board may propose. The
Board has no reason to expect that the nominees will be unable to serve and,
therefore, at this time it does not have any substitute nominees under
consideration. Proxies cannot be voted for a greater number of persons than the
number named.
The nominees for election shall be elected by a plurality of the votes cast by
the shares of Common Stock entitled to vote at the Annual Meeting. Shareholders
have no right to vote cumulatively for directors, but rather each shall have one
vote for each director for each share of Common Stock held by such shareholder.
DIRECTOR NOMINEES
The following persons are the nominees for election to serve as directors. All
nominees are presently directors of the Company. There are no family
relationships between any of the director nominees. Certain information relating
to the nominees, which has been furnished to the Company by the individuals
named, is set forth below.
JERRY T. ARMSTRONG Director since 1998
Dallas, Texas Age 61
Mr. Armstrong joined the Company's Board of Directors in August 1998. He is the
Chairman and Chief Executive Officer of Wind Associates, Inc., a private
investment and management company, a position he has held since June 1997. From
June 1988 to June 1997, Mr. Armstrong was Chairman, President and Chief
Executive Officer of Merchants, Inc., and from February 1984 until June 1988, he
was President and Chief Executive Officer of The Wedge Group, Inc., both parent
corporations of diversified transportation companies. He also served on the
Board of Directors of Landstar System, Inc. from March 1991 until May 1994. Over
a forty year career, Mr. Armstrong held chief executive positions with and
served on the boards of ANR Freight Systems, Inc., Garrett Freight Lines, Inc.,
Riss International, Inc., and Johnson Motor Lines, Inc., all transportation
related companies.
GEN. DUANE H. CASSIDY Director since 1998
Ponte Vedra Beach, Florida Age 66
Gen. Cassidy began serving as a director of the Company in August 1998,
following his retirement in January 1998 as Corporate Senior Vice President and
Chairman of the Commercial Board of CSX Corporation, a position he held from
June 1996. From January 1992 to June 1996, he was Senior Vice President of Sales
and Marketing for CSX Transportation, Inc., a subsidiary of CSX Corporation.
From October 1989 to January 1992, he served as Vice President of Logistics
Technology and held the position of President, CSX/Sea-Land Logistics, Inc. From
September 1985 to September 1989, he served as Commander in Chief, Military
Airlift Command, and from July 1987 to September 1989, as Commander in Chief,
United States Transportation Command, where he was the Department of Defense
advocate and single point of contact for the Defense Transportation System--air,
land, and sea, military and commercial. In October 1989, he retired from the Air
Force as a four-star General, and currently sits on the National Defense
Transportation Association's Board of Directors as Vice Chairman.
2
<PAGE> 6
DR. C. JOHN LANGLEY, JR. Director since 1998
Knoxville, Tennessee Age 54
Dr. Langley joined the Board of Directors of the Company in August 1998. He is
the John H. Dove Distinguished Professor of Logistics and Transportation at the
University of Tennessee, Knoxville. He has served as a professor at the
University of Tennessee since September 1973. From October 1984 until October
1992, he was a member of the Executive Committee of the Council of Logistics
Management, served as President of the Council from October 1990 to October
1991, and was the 1993 recipient of the Council's Distinguished Service Award.
In addition to providing consulting and advisory services to several leading
corporations, he is a popular speaker at professional conferences, and
participates as a faculty member at executive logistics programs offered at a
number of leading universities.
SCOTT M. NISWONGER Director since 1998
Greeneville, Tennessee Age 52
Mr. Niswonger serves as Chairman of the Board and Chief Executive Officer of the
Company. Mr. Niswonger has served as a director of Forward Air Corporation since
1981 and is its current Chairman and Chief Executive Officer. Mr. Niswonger also
serves on the Regional Advisory Board of First Tennessee Bank National
Association.
C. TIM ROACH Director since 1999
Greeneville, Tennessee Age 54
Mr. Roach has served as President, Chief Operating Officer and director of the
Company since October 1999. Mr. Roach has 30 years of motor carrier management
experience, most recently serving as a consultant to the industry, and from July
1999 to October 1999 was under contract to the Company. He has held other
contract management positions including with Rocor International, Inc. from
September 1997 until September 1998 and Daymark, Inc. from September 1996 until
September 1997. Prior to these assignments, he was Senior Vice President for
Stevens Transport, Inc. from March 1992 until September 1996 and has held other
senior management positions within the industry since 1970.
RICHARD H. ROBERTS Director since 1998
Greeneville, Tennessee Age 45
Mr. Roberts serves as Senior Vice President, General Counsel and Secretary and
as a director of the Company. Mr. Roberts was a partner with the Baker,
Worthington, Crossley & Stansberry law firm from January 1991 until July 1994.
Mr. Roberts also serves as a director of Miller Industries, Inc. and as Senior
Vice President, General Counsel, Secretary and a director of Forward Air
Corporation.
BOARD OF DIRECTORS AND COMMITTEES
During 1999, the Board held five meetings. The Board maintains an Executive
Committee, an Audit Committee, a Compensation Committee and a Nominating
Committee. These committees do not have a formal meeting schedule, but are
required to meet at least once each year. Current members of the Executive
Committee are Messrs. Niswonger, Roach and Roberts. The Executive Committee is
authorized to act on behalf of and to carry out the functions of the Board to
the extent permitted by law and the Bylaws of the Company.
3
<PAGE> 7
Current members of the Audit Committee are Messrs. Armstrong, Cassidy and
Langley. The Audit Committee recommends engagement of the independent auditors,
considers the fee arrangement and scope of the audit, reviews the financial
statements and the independent auditors' report, considers comments made by the
independent auditors with respect to the Company's internal control structure,
and reviews internal accounting procedures and controls with the Company's
financial and accounting staff. The Audit Committee held two meetings during
1999.
Current members of the Compensation Committee are Messrs. Armstrong, Cassidy and
Niswonger. The Compensation Committee is responsible for determining the overall
compensation levels of certain of the Company's executive officers and
administering the Company's employee stock option plan and other employee
benefit plans. The Compensation Committee held three meetings during 1999.
Current members of the Nominating Committee are Messrs. Roach and Niswonger. The
Nominating Committee is responsible for establishing the criteria for and
reviewing the qualifications of individuals for election as members of the
Board. When a vacancy on the Board occurs or is anticipated, the Committee
presents its recommendation of a replacement director to the Board. The
Committee also makes recommendations as to exercise of the Board of Director's
authority to determine the number of its members, within the limits provided by
the Bylaws of the Company. Shareholders wishing to communicate with the
Nominating Committee concerning potential director candidates may do so by
corresponding with the Secretary of the Company and including the name and
biographical data of the individual being suggested. The Nominating Committee
held one meeting during 1999.
All directors hold office at the pleasure of the shareholders. All of the
incumbent directors attended at least 75% of the total number of meetings of the
Board and committees on which they served during 1999.
COMPENSATION OF DIRECTORS
Employee directors of the Company do not receive additional compensation for
serving as members of the Board of Directors or on any committee thereof. In
lieu of an annual retainer, non-employee directors are paid a fee of $1,500 for
each Board meeting and $1,500 for each committee meeting attended, together with
reasonable traveling expenses. No additional fee is paid for committee meetings
held on the same day as Board meetings.
On July 21, 1998, the Board adopted, and Forward Air Corporation as the sole
shareholder then approved, the Landair Corporation Non-Employee Director Stock
Option Plan (the "Director Plan"). On October 5, 1998, at the Chairman's
request, the Board of Directors approved, subject to shareholder approval which
was obtained at the 1999 Annual Meeting, adoption of a First Amendment to the
Director Plan, which provided that each existing eligible non-employee director
be granted options to purchase 15,000 shares of Common Stock on the effective
date of the Director Plan and be granted options to purchase 7,500 shares of
Common Stock on the first business day after each Annual Meeting of Shareholders
of the Company at an exercise price equal to the then applicable Fair Market
Value (as defined in the Director Plan) of the Common Stock on such date.
Accordingly, on October 5, 1998 and May 19, 1999, each non-employee director was
granted 15,000 and 7,500 options at an exercise price of $4.25 and $4.88 per
share, respectively.
4
<PAGE> 8
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until September 1998, Forward Air Corporation operated a deferred air freight
business and the Company's national truckload carrier business. On September 23,
1998, Forward Air Corporation spun off the truckload carrier business through
the distribution to its shareholders of all of the outstanding Common Stock of
the Company. As a result of the spin-off, the Company became a separate
publicly-held corporation. Messrs. Niswonger and Roberts serve as directors and
executive officers of Forward Air Corporation. In addition, Mr. Niswonger
beneficially owned approximately 35% and 29% of the Company and Forward Air
Corporation, respectively, as of March 17, 2000. In connection with the
spin-off, the Company and Forward Air Corporation entered into various
agreements, including a Transition Services Agreement and a Distribution
Agreement.
Under the Transition Services Agreement, Forward Air Corporation provides
accounts payable, payroll, human resources, employee benefit plan
administration, owner-operator settlement, central purchasing, accounting and
legal, general administrative, and information technology services to the
Company. Forward Air Corporation charged the Company approximately $2.4 million
for these services in 1999. In addition, the Company provides Forward Air
Corporation safety, licensing, permitting and fuel tax, insurance and claims
services, recruiting and retention services, and driver training center services
and charged Forward Air Corporation approximately $455,000 for these services
during the same period. The Company or Forward Air Corporation, as recipients of
the services, may terminate any or all such services at any time on thirty days'
irrevocable written notice, and the Company or Forward Air Corporation, as
providers of the services, may terminate any or all of the services, other than
information technology services, on three months' irrevocable notice.
Information technology services to be provided to the Company by Forward Air
Corporation have a thirty-six month term.
During 1999, the Company terminated its sublease with Forward Air Corporation
for a portion of its terminal facility in Columbus, Ohio. The Company and
Forward Air Corporation routinely engage in transactions where the Company hauls
deferred air freight shipments for Forward Air Corporation which are in excess
of Forward Air Corporation's scheduled capacity. The Company's operating revenue
from these shipments was approximately $3.3 million during 1999.
The Company incurred $36,000 in rent expense in 1999 for a motorcoach leased
from Sky Night, L.L.C. Sky Night, L.L.C. is owned by Mr. Niswonger.
5
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the "beneficial ownership," as that term is
defined in the rules of the Securities and Exchange Commission (the
"Commission") of the Common Stock of (i) each director; (ii) the Chief Executive
Officer and the four other highest paid executive officers (the "Named Executive
Officers"); (iii) all directors and executive officers as a group; and (iv) each
other person known to be a "beneficial owner" of more than five percent of any
class of capital stock of the Company based on information available to the
Company on March 17, 2000. Except as otherwise indicated, the shareholders
listed in the table have sole voting and investment powers with respect to the
Common Stock owned by them.
<TABLE>
<CAPTION>
Percentage of
Aggregate Number of Common Shares
Name and Address of Beneficial Owner (1) Shares (2) Outstanding (2)
- ------------------------------------------------------------ ------------------- ---------------
<S> <C> <C>
Jerry T. Armstrong.......................................... 7,500 (3) *
Gen. Duane H. Cassidy....................................... 10,500 (3) *
C. John Langley, Jr......................................... 11,500 (3) *
Scott M. Niswonger.......................................... 2,129,520 (4) 35.47%
C. Tim Roach................................................ -- --
Richard H. Roberts.......................................... 319,442 (5) 5.32
Harry O. Crabtree........................................... 8,339 (6) *
P. Michael Davis............................................ 2,573 (7) *
John R. Morris.............................................. 3,198 (5) *
Greg R. Smith............................................... 2,573 (7) *
Brown Investment Advisory & Trust Company................... 440,799 (8) 7.34
East Tennessee Foundation................................... 700,000 (9) 11.66
Merrill Lynch & Co., Inc.................................... 643,700 (10) 10.72
Wellington Management Company, LLP.......................... 606,000 (11) 10.09
All directors and executive officers as a group (12 persons) 2,592,095 (12) 43.18
</TABLE>
* Less than one percent.
(1) The business address of each listed executive officer and director is c/o
Landair Corporation, 430 Airport Road, Greeneville, Tennessee 37745.
(2) For the purpose of determining "beneficial ownership," the rules of the
Commission require that every person who has or shares the power to vote or
dispose of shares of stock be reported as a "beneficial owner" of all
shares as to which such power exists. As a consequence, many persons may be
deemed to be the "beneficial owners" of the same securities. The Commission
rules also require that certain shares of stock that a beneficial owner has
the right to acquire within 60 days of the date set forth above pursuant to
the exercise of stock options are deemed to be outstanding for the purpose
of calculating the percentage of ownership of such owner, but are not
deemed outstanding for the purpose of calculating the percentage of
ownership of any other person.
(3) Includes 7,500 shares which are issuable pursuant to options which are
exercisable within 60 days of the date set forth above.
(4) Includes 300 shares held by Mr. Niswonger as custodian for his grandson and
300 shares which are held by Mr. Niswonger's spouse as custodian for one of
her children.
(5) Includes 3,125 shares which are issuable pursuant to options which are
exercisable within 60 days of the date set forth above.
(6) Includes 4,375 shares which are issuable pursuant to options which are
exercisable within 60 days of the date set forth above.
(7) Includes 2,500 shares which are issuable pursuant to options which are
exercisable within 60 days of the date set forth above.
(8) Brown Investment Advisory & Trust Company ("BIATC") and its wholly owned
subsidiary, Brown Advisory Incorporated ("BAI"), 19 South Street,
Baltimore, Maryland 21202, had no shared voting or dispositive power over
the shares as of December 31, 1999. BIATC had sole voting power over
179,974 shares and sole dispositive power over 192,174 shares. BAI had sole
voting and sole dispositive power over 248,625 shares as of December 31,
1999.
(9) East Tennessee Foundation, a non-profit charitable organization located at
550 West Main Street, Suite 550, Knoxville, Tennessee 37902, has sole
voting and dispositive power over all of the shares and no shared voting or
dispositive power over the shares.
(10) Merrill Lynch & Co., Inc. ("ML&Co.") (on behalf of Merrill Lynch Asset
Management Group ("AMG")), World Financial Center, North Tower, 250 Vesey
Street, New York, New York 10381 is a parent holding company. AMG is an
operating division of ML&Co. consisting of ML&Co.'s indirectly-owned asset
management subsidiaries. Two of these subsidiaries, Merrill Lynch Asset
Management, L.P. and Fund Asset Management, L.P. hold certain shares of the
Common Stock. As of
6
<PAGE> 10
December 31, 1999, ML&Co. (on behalf of AMG) did not have sole voting or
dispositive power over the shares and had shared voting and dispositive
power over all of the shares. Merrill Lynch Special Value Fund, Inc.
(MLSVF"), 800 Scudders Mill Road, Plainsboro, New Jersey 08536, an
investment company, may be deemed to beneficially own 428,500 of the shares
as of December 31, 1999. Of the 428,500 shares, MLSVF did not have sole
voting or dispositive power and had shared voting and dispositive power
over 428,500 shares.
(11) Wellington Management Company, LLP ("WMC"), 75 State Street, Boston,
Massachusetts 02109, is an investment adviser registered with the
Commission under the Investment Advisors Act of 1940, as amended. As of
December 31, 1999, WMC, in its capacity as investment advisor, may be
deemed to have beneficial ownership of 606,000 shares that are owned by
numerous clients, none of which is known to have such interest with respect
to more than five percent of the class. As of December 31, 1999, WMC did
not have sole power to vote or dispose of the shares, nor to direct the
vote or disposition of the shares, had shared power to vote or to direct
the vote of 516,000 of the shares and shared dispositive power over all of
the shares.
(12) Includes 64,290 shares which are issuable pursuant to options which are
exercisable within 60 days of the date set forth above.
7
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS IN 1999
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation paid or to be
paid by the Company to the Named Executive Officers for the years shown in all
capacities in which they served.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------- -------------
Number of
Securities All Other
Other Annual Underlying Compensation
Name and Principal Positions Year Salary Bonus Compensation Options (1)
- -------------------------------- ------- -------- ------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Scott M. Niswonger (2) 1999 $148,593 $ -- $ -- -- $ 4,500
Chairman and 1998 143,987 73,238 -- -- 5,656
Chief Executive Officer
John R. Morris (3) 1999 $103,519 $ -- $ -- 5,000 $ 1,007
President, Dedicated 1998 45,692 -- -- 12,500 --
Operations
Landair Transport, Inc.
Harry O. Crabtree (4) 1999 $102,260 $ -- $ -- 10,000 $10,006
Vice President, Safety 1998 83,212 -- -- 12,500 --
Landair Transport, Inc.
P. Michael Davis (3) 1999 $101,712 $ -- $ -- 5,000 $ 998
Vice President, Dedicated 1998 45,692 -- -- 10,000 --
Operations
Landair Transport, Inc.
Greg R. Smith (3) 1999 $101,712 $ -- $ -- 5,000 $ 998
Vice President, Dedicated 1998 45,692 -- -- 10,000 --
Operations
Landair Transport, Inc.
</TABLE>
(1) Includes car allowance and employer matching portion of 401(k)
contributions.
(2) Effective January 1, 1998, Mr. Niswonger's annual compensation was
allocated equally to the Company and Forward Air Corporation pursuant to
the terms of the Transition Services Agreement.
(3) Messrs. Morris, Davis and Smith joined the Company in July 1998.
(4) Mr. Crabtree joined the Company in February 1998.
8
<PAGE> 12
1999 OPTION GRANTS, AGGREGATED OPTION EXERCISES AND OPTION VALUES
During 1999, the Company awarded stock options to the Named Executive Officers
as set forth in the following table.
OPTION GRANTS IN LAST YEAR
<TABLE>
<CAPTION>
Individual Grants Potential
----------------------------------------------------------- Realizable Value
Percent of at Assumed Annual
Total Rates of Stock
Number of Options Price Appreciation
Securities Granted to Exercise For Option
Underlying Employees Or Term (1)
Options in Base Price Expiration -------------------------
Name Granted Last Year ($/Share) Date 5% 10%
---- ------------ ------------ ------------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
John R. Morris 5,000 2.41 $3.75 07/21/09 $11,026 $28,664
Harry O. Crabtree 5,000 2.41 3.75 07/21/09 11,026 28,664
5,000 2.41 6.75 02/04/09 18,171 48,926
P. Michael Davis 5,000 2.41 3.75 07/21/09 11,026 28,664
Greg R. Smith 5,000 2.41 3.75 07/21/09 11,026 28,664
</TABLE>
(1) We recommend caution in interpreting the financial significance of these
figures. They are calculated by multiplying the number of options granted
by the difference between a future hypothetical stock price and the option
exercise price and are shown pursuant to rules of the Commission. They
assume the value of Common Stock appreciates 5% or 10% each year,
compounded annually, for ten years (the life of each option). They are not
intended to forecast possible future appreciation, if any, of such stock
price or to establish a present value of options. Also, if appreciation
does occur at the 5% or 10% per year rate, the amounts shown would not be
realized by the recipients until the year 2009. Depending on inflation
rates, these amounts may be worth significantly less in 2009, in real
terms, than their value today.
9
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST YEAR
AND YEAR-END OPTION VALUES
The following table sets forth the year-end aggregated option exercises and
year-end value of unexercised options held by the Named Executive Officers.
<TABLE>
<CAPTION>
Option Exercises Number of
In Last Year Securities Underlying Value of Unexercised
---------------------------- Unexercised Options Held In-The-Money Options
Shares at Year-End at Year-End (2)
Acquired Value ---------------------------- ----------------------------
Name (1) on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
-------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John R. Morris -- $ -- 3,125 14,375 $2,344 $13,281
Harry O. Crabtree -- -- 3,125 19,375 2,344 13,281
P. Michael Davis -- -- 2,500 12,500 1,875 11,875
Greg R. Smith -- -- 2,500 12,500 1,875 11,875
</TABLE>
(1) Mr. Niswonger has not been granted any options for the purchase of Common
Stock.
(2) Represents the closing price for the Common Stock on December 31, 1999 of
$5.00 less the exercise price for all outstanding exercisable and
unexercisable options for which the exercise price is less than the
December 31, 1999 closing price. Exercisable options have been held at
least one year from the date of grant.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company does not have an employment agreement with any of its executive
officers. Awards granted under the Company's Amended and Restated Stock Option
and Incentive Plan (the "Plan") become immediately exercisable or otherwise
nonforfeitable in full in the event of a Change in Control of the Company (as
defined in the Stock Plan), notwithstanding specific terms of the awards
providing otherwise. Furthermore, with respect to stock options granted under
the Stock Plan, following a Change in Control, the Compensation Committee may,
in its discretion, permit the cancellation of such options in exchange for a
cash payment in an amount per share equal, generally, to the difference between
the highest Fair Market Value per share of Common Stock during the 60 day period
preceding the Change in Control and the exercise price. A Change in Control is
defined in the Stock Plan to include, among other things, (i) the acquisition of
securities representing a majority of the combined voting power of all classes
of capital stock by any person (other than the Company and other related
entities); (ii) the approval by the shareholders of a merger or consolidation of
the Company into or with another entity (with certain exceptions), the sale or
other disposition of all or substantially all of the Company's assets, or the
adoption of a plan of liquidation; or (iii) a change in the composition of the
Board of Directors in any two-year period such that individuals who were Board
members at the beginning of such period cease to constitute a majority thereof
(with certain exceptions).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Committee was comprised of two non-employee directors, Messrs.
Armstrong and Cassidy, and Mr. Niswonger. There were no Compensation Committee
interlocks. See "Transactions with Directors, Executive Officers and Others."
10
<PAGE> 14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's general compensation policies on executive officer compensation
are administered by the Committee; however, the Committee submits its
determinations to the full Board for its comments and concurrence. A majority of
members of the Committee were non-employee directors in 1999. It is the
responsibility of the Committee to determine whether the executive compensation
policies are reasonable and appropriate to meet their stated objectives and
effectively serve the best interests of the Company and its shareholders.
The three components of executive officer compensation are base salary, annual
bonus incentive awards and stock option grants, except for the Chief Executive
Officer whose compensation includes only base salary and annual bonus incentive
awards. In addition to the Committee's determinations on base salary and bonus
incentive awards, the Committee acting solely through its non-employee directors
administers the Company's Employee Stock Purchase Plan and Stock Plan and
determines the options to be granted to executive officers.
The Company believes that its executive compensation policy should be reviewed
annually and should be reviewed in light of the Company's financial performance,
its annual budget, its position within its industry sector and the compensation
policies of similar companies in its business sector. The Committee believes
that in addition to corporate performance, it is appropriate to consider, in
setting and reviewing executive compensation, the level of experience and the
responsibilities of each executive as well as the personal contributions a
particular individual may make to the success of the corporate enterprise. Such
qualitative factors are taken into account in considering levels of
compensation. No relative weight is assigned to these qualitative factors, which
are applied subjectively by the Committee.
The Company has an employee cash incentive plan (the "Cash Incentive Plan"),
which provides for annual cash incentive payments to employees based on the
Company's results of operations. The goals of the Cash Incentive Plan are
established based on operating plans for the year, and amounts payable under the
Cash Incentive Plan are determined based on the results of the Company's
operations. The amount of the cash incentives paid under the Cash Incentive Plan
is determined annually by the Board.
In order to be able to increase the equity incentives available to executive
officers and other key employees, and to continue to be able to offer new
options, the Committee recommended, in February 1999, that the Board increase
the number of authorized shares issuable under the Stock Plan from 500,000
shares to 1,000,000 shares of Common Stock, subject to approval by shareholders
at the 1999 Annual Meeting of Shareholders. In 1998, 165,000 stock options were
granted and, upon consummation of the September 1998 spin-off, unexercisable
options held by former Forward Air Corporation employees were converted into
169,000 options to purchase Common Stock under the Stock Plan based on a formula
designed to preserve the fair market value of the options on the spin-off date.
In July 1998, the Board and then sole shareholder adopted the Company's Employee
Stock Purchase Plan. The Stock Plan was approved by the Shareholders at the 1999
Annual Meeting. All executive officers are entitled to participate in the
Employee Stock Purchase Plan unless they own five percent or more of the total
Common Stock.
The Committee's philosophy with respect to the compensation of the Company's
Chief Executive Officer is essentially the same as its philosophy with respect
to other executive officers. Because the Chief Executive Officer owns
approximately 35% of the Common Stock, however, his personal net worth is more
closely related to the performance of the Common Stock than other executive
officers. The Committee has not awarded stock options to the Chief Executive
Officer.
11
<PAGE> 15
Section 162(m) of the Internal Revenue Code of 1986, as amended and any
successor thereto, was enacted as part of the 1993 Omnibus Budget Reconciliation
Act and generally disallows a corporate deduction for compensation over
$1,000,000 paid to the Company's Chief Executive Officer or any other of the
four most highly compensated officers. The Committee continues to analyze the
potential impact of this limitation. Under the regulations and the transition
rules, executive compensation pursuant to the Stock Plan, if approved by the
shareholders, is expected to qualify as "performance based" compensation and
therefore be excluded from the $1,000,000 limit. Other forms of compensation
provided by the Company, however, are not excluded from the limit. The Committee
currently anticipates that substantially all compensation to be paid in future
years will be deductible under Section 162(m) because of the spread between
present levels of executive officer compensation and the limit under the
regulation. In any event, the Committee believes that performance based
compensation is desirable and can be structured in a manner to qualify as
performance based compensation under Section 162(m).
Jerry T. Armstrong
Duane H. Cassidy
Scott M. Niswonger
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's cumulative
shareholder return on its Common Stock with the Nasdaq Trucking and
Transportation Stocks Index and The Nasdaq Stock Market Index commencing
September 24, 1998 (the first trading day following the spin-off) and ending
December 31, 1999. The graph assumes a base investment of $100 made on September
24, 1998 and the respective returns assume reinvestment of dividends paid. The
comparisons in this graph are required by the Commission and, therefore, are not
intended to forecast or be necessarily indicative of any future return on the
Common Stock.
(GRAPH)
<TABLE>
<CAPTION>
Nasdaq Trucking and
Measurement Period Landair Corporation Transportation Stocks Index Nasdaq Stock Market Index
<S> <C> <C> <C>
09/24/98 $100.00 $100.00 $100.00
12/31/98 125.00 112.43 128.00
12/31/99 83.33 120.07 231.25
</TABLE>
13
<PAGE> 17
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board, acting upon the recommendation of the Audit Committee, has appointed
the independent public accounting firm of Ernst & Young LLP to serve as the
Company's independent auditors for 2000. As in the past, the Board has
determined that it would be desirable to request ratification of its appointment
by the shareholders of the Company. If the shareholders do not ratify the
appointment of Ernst & Young LLP, the appointment of independent public
accountants will be reconsidered by the Board. A representative of Ernst & Young
LLP is not expected to be present at the Annual Meeting, and thus, is not
expected to make a statement or be available to respond to appropriate
questions.
This Proposal will be approved if the votes cast in favor of the Proposal exceed
the votes cast against it. Unless otherwise directed therein, the proxies
solicited hereby will be voted for approval of Ernst & Young LLP. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF APPOINTMENT OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY FOR 2000.
OTHER MATTERS
The Board of Directors knows of no other matters that may come before the
meeting; however, if any other matters should properly come before the meeting
or any adjournment thereof, it is the intention of the persons named in the
proxy to vote the proxy in accordance with their best judgment.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act and the disclosure requirements of Item 405 of
Regulation S-K require the directors and executive officers of the Company, and
any persons holding more than ten percent of any class of equity securities of
the Company, to report their ownership of such equity securities and any
subsequent changes in that ownership to the Commission, The Nasdaq Stock Market
and the Company. Based solely on a review of the written statements and copies
of such reports furnished to the Company by its executive officers and
directors, the Company believes that during 1999 all Section 16(a) filing
requirements applicable to its executive officers, directors and shareholders
were timely satisfied.
DEADLINE FOR SUBMISSION TO SHAREHOLDERS OF PROPOSALS TO BE PRESENTED AT THE 2000
ANNUAL MEETING OF SHAREHOLDERS
Any proposal intended to be presented for action at the 2001 Annual Meeting of
Shareholders by any shareholder of the Company must be received by the Secretary
of the Company not later than December 1, 2000 in order for such proposal to be
considered for inclusion in the Company's Proxy Statement and proxy relating to
its 2001 Annual Meeting of Shareholders. Nothing in this paragraph shall be
deemed to require the Company to include any shareholder proposal which does not
meet all the requirements for such inclusion established by the Commission at
the time in effect.
For other shareholder proposals to be timely (but not considered for inclusion
in the Proxy Statement for the 2001 Annual Meeting of Shareholders), a
shareholder's notice must be received by the Secretary of the Company not later
than February 28, 2001 and the proposal and the shareholder must comply with
Regulation 14A under the Exchange Act. In the event that a shareholder proposal
intended to be presented for action at the next Annual Meeting is not received
prior to February 28, 2001, proxies solicited by the Board of Directors in
connection with the Annual Meeting will be permitted to use their discretionary
voting authority with respect to the proposal, whether or not the proposal is
discussed in the Proxy Statement for the Annual Meeting.
14
<PAGE> 18
MISCELLANEOUS
It is important that proxies be returned promptly to avoid unnecessary expense.
Therefore, shareholders who do not expect to attend in person are urged,
regardless of the number of shares of Common Stock owned, to date, sign and
return the enclosed proxy promptly.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1999 IS INCLUDED WITHIN THE ANNUAL REPORT PROVIDED WITH THIS PROXY
STATEMENT. SUCH ANNUAL REPORT DOES NOT CONSTITUTE A PART OF THE PROXY
SOLICITATION MATERIAL. COPIES OF EXHIBITS FILED WITH THE FORM 10-K ARE AVAILABLE
UPON WRITTEN REQUEST. REQUESTS SHOULD BE MADE IN WRITING TO RICHARD H. ROBERTS,
SECRETARY, LANDAIR CORPORATION, P.O. BOX 1058, GREENEVILLE, TENNESSEE
37744-1058.
By Order of the Board of Directors
Richard H. Roberts
Secretary
Greeneville, Tennessee
April 20, 2000
15
<PAGE> 19
PROXY
LANDAIR CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF LANDAIR CORPORATION
The undersigned, having received the Notice of Annual Meeting and Proxy
Statement, hereby appoints Scott M. Niswonger, C. Tim Roach and Richard H.
Roberts and each of them, proxies with full power of substitution, for and in
the name of the undersigned, to vote all shares of common stock of Landair
Corporation owned of record by the undersigned on all matters which may come
before the 2000 Annual Meeting of Shareholders to be held at the General Morgan
Inn & Conference Center, 111 North Main Street, Greeneville, Tennessee, on May
22, 2000, at 9:00 a.m., local time, and any adjournments thereof, unless
otherwise specified herein. The proxies, in their discretion, are further
authorized to vote for the election of a person to the Board of Directors if any
nominee named herein becomes unable to serve or for good cause will not serve,
are further authorized to vote on matters which the Board of Directors does not
know a reasonable time before making the proxy solicitation will be presented at
the meeting, and are further authorized to vote on other matters which may
properly come before the 2000 Annual Meeting and any adjournments thereof.
1. Election of Directors
<TABLE>
<S> <C>
[ ] FOR all the nominees listed below (except as marked to [ ] WITHHOLD AUTHORITY (ABSTAIN) to vote for all
the contrary below) nominees listed below
</TABLE>
Jerry T. Armstrong; Gen. Duane H. Cassidy; C. John Langley, Jr.; Scott M.
Niswonger; C. Tim Roach and Richard H. Roberts
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. Ratification of the appointment of Ernst & Young LLP as independent auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
(see reverse side)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ALL OF THE
DIRECTOR NOMINEES AND "FOR" PROPOSAL 2.
Do you plan to attend the
Annual Meeting?
[ ] Yes [ ] No
PLEASE SIGN AND DATE BELOW AND
RETURN PROMPTLY.
Please sign exactly as name
appears hereon. Joint Owners
should each sign. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such.
------------------------------
------------------------------
Signature(s) Date
