<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
J. B. Hunt Transport Services, Inc.
.............................................................................
(Name of Registrant as Specified In Its Charter)
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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:
......................................................
Notes:
<PAGE>
J. B. HUNT TRANSPORT SERVICES, INC.
615 J. B. HUNT CORPORATE DRIVE
LOWELL, ARKANSAS 72745
NOTICE AND PROXY STATEMENT FOR
ANNUAL STOCKHOLDERS' MEETING
___________________________
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO BE HELD ON MAY 12, 1994 AT 10:00 A.M.
The annual meeting of stockholders of J.B. Hunt Transport Services, Inc.
(the "Company") will be held May 12, 1994 at 10:00 a.m. (CST) at the Company's
world headquarters, located at 615 J. B. Hunt Corporate Drive, Lowell, Arkansas
for the following purposes:
(1) To elect ten (10) Directors and to fix the number of Directors for the
ensuing year at ten (10).
(2) To ratify the appointment of KPMG Peat Marwick as the Company's
independent public accountants for the next fiscal year.
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record on March 11, 1994 will be entitled to vote at the
meeting or any adjournments thereof. The stock transfer books will not be
closed.
A copy of the 1993 Annual Report to Stockholders is enclosed.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to be present, the Board of Directors requests that you
promptly complete, sign, date and mail the enclosed proxy. If you attend the
meeting, you may vote either in person or by your proxy.
By Order of the Board of Directors
/s/ Johnelle D. Hunt
JOHNELLE D. HUNT
Secretary
Lowell, Arkansas
April 14, 1994
YOUR VOTE IS IMPORTANT. PLEASE DATE, SIGN AND RETURN
YOUR PROXY WITHOUT DELAY.
<PAGE>
J. B. HUNT TRANSPORT SERVICES, INC.
615 J. B. HUNT CORPORATE DRIVE
LOWELL, ARKANSAS 72745
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1994
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of J. B. Hunt Transport Services, Inc. (the
"Company"). The Proxy Statement, Form of Proxy and 1993 Annual Report are being
mailed to the stockholders on or about April 14, 1994. Proxies will be voted at
the annual meeting of stockholders to be held May 12, 1994 at 10:00 a.m. at the
Company's world headquarters, located at 615 J. B. Hunt Corporate Drive, Lowell,
Arkansas; and at any and all adjournments thereof. The meeting will be held for
the purposes set forth in the notice of such meeting on the cover page hereof.
The telephone number of the Company is (501) 820-0000. A proxy, when executed
and not revoked, will be voted in accordance with the authorization contained
therein. Unless a stockholder specifies otherwise on the Form of Proxy, all
shares represented thereby will be voted in favor of the proposals of the Board
of Directors discussed herein.
REVOCATION OF PROXIES
A Form of Proxy for use at the annual meeting of stockholders is enclosed
together with a return envelope. Any stockholder who executes and delivers his
proxy has the right to revoke it at any time before it is exercised. Revocation
of a proxy may be effected by filing a written statement with the Secretary of
the Company revoking the proxy, by executing and delivering to the Company a
subsequent proxy before the meeting, or by voting in person at the meeting.
OUTSTANDING STOCK AND VOTING RIGHTS
The outstanding shares of stock of the Company as of March 11, 1994 total
38,546,916 all common stock, $.01 par value. At the meeting, each stockholder
will be entitled to one vote, in person or by proxy, for each share of stock
owned of record at the close of business on March 11, 1994. The stock transfer
books of the Company will not be closed. With respect to the election of
directors, each stockholder of the Company, or his proxy if one is appointed,
has voting rights under the laws of the State of Arkansas. That is, each
stockholder, or his proxy, may vote his shares for one director, or may
distribute votes on the same principle among as many nominees as he may desire.
A stockholder may also withhold authority to vote for any nominee (or nominees)
by striking through the name (or names) of such nominees on the accompanying
Form of Proxy.
<PAGE>
METHOD OF VOTING
An affirmative vote of a majority of the votes present, in person or by proxy,
is required to pass each of the items listed on the Proxy to be voted upon
except for the election of directors or the selection of auditors. The election
of directors will be approved if each director nominee receives a plurality of
the votes cast. All proxies submitted will be tabulated by First Chicago Trust
Company of New York.
With respect to the election of directors, a stockholder may withhold
authority to vote for all nominees by checking the box "withhold authority" on
the enclosed proxy or may withhold authority by crossing out the name of such
nominee or nominees as indicated on the enclosed proxy. The enclosed proxy also
provides a method for stockholders to abstain from voting on each other matter
presented. By abstaining, shares will not be voted either for or against the
subject proposals, but will be counted for quorum purposes. While there may be
instances in which a stockholder may wish to abstain from voting on any
particular matter, the Board of Directors encourages all stockholders to vote
their shares in their best judgment and to participate in the voting process to
the fullest extent possible.
An abstention or a broker non-vote, i.e., when a stockholder does not grant
his or her broker authority to vote his or her shares on non-routine matters,
will have no effect on any item to be voted on at this meeting.
On the date of mailing this Proxy Statement, the Board of Directors has no
knowledge of any other matter which will come before the annual meeting other
than matters described herein. However, if any such matter is properly
presented at the meeting, the proxy solicited hereby confers discretionary
authority to the proxies to vote in their sole discretion with respect to such
matters, as well as other matters incident to the conduct of the meeting.
REPORT OF ACTION TAKEN AT PRIOR ANNUAL MEETING
OF STOCKHOLDERS ON MAY 13, 1993
The 1993 Annual Meeting of Stockholders was held on May 13, 1993. At that
meeting 84 percent of eligible shares were voted. The nine nominees for the
Board of Directors were elected by a vote of 99.81 percent of the total shares
voted.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors has recommended to the stockholders that the number of
directors which shall be authorized to manage the affairs of the Company for the
ensuing year shall be ten (10). The Board of Directors has submitted the
following slate of directors for election at the annual meeting.
J. B. HUNT
Mr. Hunt, age 67, founded the J. B. Hunt Company in 1961. He has served as
Chairman of the Board of Directors since 1982 and has been a Director since
1961. He also serves as a Director for the American Trucking Association
Foundation.
JOHNELLE D. HUNT
Mrs. Hunt, age 62, is the wife of J. B. Hunt. Joining the Company in 1962, she
was elected Corporate Secretary of the Company in 1972 and continues to serve in
that capacity. She has served as a Director since July 1993.
2
<PAGE>
J. BRYAN (BRYAN) HUNT, JR.
Mr. Hunt, age 35, is the son of J. B. and Johnelle Hunt. He joined the Company
in 1983 through the Company's management trainee program. He was elected
Assistant to the Chairman of the Board and Assistant Secretary in 1988. In 1991
he was elected Vice Chairman of the Board and Assistant Secretary. He has
served as a Director for the Company since 1991.
KIRK THOMPSON
Mr. Thompson, age 40, is the President and Chief Executive Officer of the
Company and President and Chief Executive Officer of J. B. Hunt Transport and
President of L.A., Inc., subsidiaries of the Company. He joined the Company in
1973 and has served as President and Chief Executive Officer since 1987. Mr.
Thompson has served as a Director for the Company since 1985.
JOHN A. COOPER, JR.
Mr. Cooper, age 55, is the Chairman of the Board of Cooper Communities, Inc. (a
community development company). In addition, Mr. Cooper serves as a Director on
the Boards of Wal-Mart Stores, Inc., Entergy Corporation, and Arkansas Power &
Light. Mr. Cooper has been a Director of the Company since 1990.
FRED K. DARRAGH, JR.
Mr. Darragh, age 77, is the Managing Partner of Darragh Investment Company and
former Chairman of the Board of the Darragh Company (a feed manufacturer with an
integrated egg operation and construction material division). Mr. Darragh has
been a Director of the Company since 1967.
WAYNE GARRISON
Mr. Garrison, age 41, manages private interests in thoroughbred horses and
investments. Mr. Garrison joined the Company in 1976 as plant manager. He
served as the Company's Chief Executive Officer from 1985 to 1987 and was Vice
Chairman of the Board from 1986 to 1991. Mr. Garrison has been a Director of
the Company since 1981.
GENE GEORGE
Mr. George, age 71, is the Chairman of the Board of George's Inc. (an integrated
poultry company). Mr. George also serves on the Boards of First National Bank
of Springdale and Arkansas Protein in Fort Smith, and is a member of the Board
of Trustees for Springdale Memorial Hospital. He has been a Director of the
Company since 1961.
ROY GRIMSLEY
Mr. Grimsley, age 64, directs his own interests in the areas of farming and
investments. He recently retired from his position as Broiler Placement
Supervisor for Tyson Foods, Inc. (an integrated poultry company). Mr. Grimsley
has been a Director of the Company since 1970.
LLOYD PETERSON
Mr. Peterson, age 81, is the Chairman of Peterson Farms (an integrated poultry
company, poultry breeder and cattle farm operation). He also serves as Chairman
of the Board for Decatur State Bank and Grand Federal Bank. Mr. Peterson has
been a Director of the Company since 1990.
Under the bylaws of the Company, directors serve for a term to expire at the
next annual meeting of stockholders and until their successors shall have been
elected and qualified.
These ten (10) persons will be placed in nomination for election to the Board
of Directors. The shares represented by the proxy cards returned will be voted
FOR the election of these nominees unless you specify otherwise.
3
<PAGE>
BOARD COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors, which meets on a regularly scheduled basis during its fiscal year to
review significant developments affecting the Company and to act on matters
which require Board approval. Special meetings are also held when Board action
is required on matters arising between regularly scheduled meetings. The Board
of Directors met six times during the 1993 fiscal year. During this period all
members of the Board participated in at least 75% of all meetings including the
annual stockholders' meeting.
The Board of Directors has established Executive, Audit and Compensation
Committees to direct attention to specific subjects and to act on its behalf in
discharging its responsibilities.
EXECUTIVE COMMITTEE. The Executive Committee, which met once during fiscal
1993, is comprised of J. B. Hunt, Wayne Garrison and Lloyd Peterson. The
Committee has broad power to act for and on behalf of the Board of Directors
between the regularly scheduled meetings of the Board of Directors.
AUDIT COMMITTEE. The Audit Committee, which met once during the year, is
comprised of Chairman Roy Grimsley, Gene George and Kirk Thompson. The
Committee's responsibilities are to oversee the Company's internal accounting
controls, select independent auditors, review the annual audit plan with the
independent auditors, review the annual report and results of the audit, review
management's engagement of the independent auditors, and optionally, to provide
a letter from the Chairman in the stockholder's annual report describing the
Committee's responsibilities and activities.
COMPENSATION COMMITTEE. The Compensation Committee, which met once during the
year is comprised of Chairman John A. Cooper, Jr., and Fred K. Darragh, Jr.
The Committee's responsibilities are to oversee and recommend to the Board of
Directors all aspects of executive compensation and provide performance based
compensation criteria designed to satisfy the definition of qualifying
compensation for deductibility under Section 162(m) of the Internal Revenue
Code. A report prepared by the Compensation Committee follows disclosing the
Company's policies towards executive compensation.
COMPENSATION OF DIRECTORS. Outside Directors of the Company are paid $2,500
per meeting attended and reimbursed for their travel expenses. Inside Directors
(who are also employees) are paid $2,500 for each meeting attended and their
compensation is reflected in Exhibits I and II following. In addition to Board
meetings, any Director who attended a meeting of a committee on which he served
was paid $500 per meeting.
The Board will consider suggestions for names of possible future nominees made
in writing by stockholders and sent to the Secretary of the Company if they are
received on or before December 31st of any year. Stockholders may, however,
nominate and vote for any legally qualified person for election to the Board of
Directors.
4
<PAGE>
EXECUTIVE OFFICERS
The Company's executive officers are:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
<S> <C> <C>
J. B. Hunt (1) 67 Chairman of the Board; Director
J. Bryan Hunt, Jr. (1) 35 Vice Chairman of the Board and
Assistant Secretary; Director
Johnelle D. Hunt (1) 62 Corporate Secretary; Director
Kirk Thompson (1) 40 President and Chief Executive
Officer; Director
Paul R. Bergant (2) 47 Executive Vice President,
Marketing
Steven K. Bevilaqua (3) 43 Executive Vice President,
Operations
Stephen L. Palmer (4) 39 Executive Vice President, Human
Resources and Risk Management
Bob D. Ralston (5) 47 Executive Vice President,
Maintenance
Jerry W. Walton (6) 47 Executive Vice President,
Finance and Chief Financial Officer
</TABLE>
(1) See "Election of Directors" for information.
(2) Mr. Bergant joined the Company in 1978 as a staff ICC attorney. He was
promoted to Executive Vice President of Marketing in 1985. He also serves as
President and Chief Executive Officer of J. B. Hunt Corporation, a
subsidiary of the Company.
(3) Steven K. Bevilaqua joined the Company in 1990 as Senior Vice President of
Sales. Mr. Bevilaqua brings 17 years experience in the transportation
market to the Company previously working for Roadway, Thompson Tractor
Company, Carolina Freight Carriers, Thurston Motor Lines and Jones Truck
Lines. He was promoted to Executive Vice President of Operations January 1,
1993.
(4) Mr. Palmer joined the Company in 1980 as Fuel Coordinator. Working in the
Human Resources Department since 1982, he has served the Company as
Executive Vice President of Human Resources and Risk Management since 1988.
(5) Mr. Ralston joined the Company in 1978 as Shop Foreman. He has served as
Executive Vice President of Maintenance since 1989.
(6) Mr. Walton joined the Company October 1, 1991 as Executive Vice President of
Finance and Chief Financial Officer. Prior to joining the Company, Mr.
Walton served as the managing partner for the Little Rock office of KPMG
Peat Marwick.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The authorized common stock of the Company consists of 100,000,000 shares,
$.01 par value. As of the close of business on March 11, 1994 there were
38,546,916 shares outstanding held by 1,778 stockholders of record.
5
<PAGE>
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock by each director of the
Company, by each person known to the Company to be, at February 28, 1994, the
beneficial owner of more than five percent of the Company's common stock, each
named executive officer (Exhibit I and II), and by all officers and directors as
a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------
<S> <C> <C>
DIRECTORS AND OFFICERS SHARES PERCENT (9)
- ---------------------- ---------- -------
J. B. Hunt 15,066,099 39.08%
Kirk Thompson (1) 165,965 *
John A. Cooper, Jr. 1,500 *
Fred K. Darragh, Jr. (2) 269,196 *
Wayne Garrison (3) 1,763,000 4.57
Gene George (4) 1,169,514 3.03
Roy Grimsley 166,125 *
J. Bryan Hunt, Jr. 201,196 *
Johnelle D. Hunt 134,883 *
Lloyd E. Peterson 1,275,000 3.3
Paul R. Bergant (5) 206,448 *
Jerry W. Walton (6) 28,530 *
All executive officers and directors
as a group (15 persons) (7) 20,481,849 53.1%
*Less than 1 percent
OTHER PRINCIPAL STOCKHOLDERS
- ----------------------------
INVESCO PLC (8) 3,636,220 9.4%
- --------------- --------- -----
11 Devonshire Square, London, England
</TABLE>
(1) Includes options to purchase 49,965 shares, all exercisable as of February
28, 1994.
(2) Shares owned by the Frederick K. Darragh, Jr. Revocable Trust, Fred Darragh,
Jr., Trustee.
(3) Includes shares owned by immediate family.
(4) Includes 730,989 shares owned by a partnership of which Mr. George is a
general partner.
(5) Includes options to purchase 61,500 shares, all exercisable as of February
28, 1994.
(6) Includes 5,080 shares held in Hunt family interests in which Mr. Walton is
designated as the trustee. 22,500 shares are subject to a restriction on
resale until October 1996.
(7) Includes options to purchase 143,258 shares, all exercisable as of February
28, 1994.
(8) Based on Schedule 13G filed by the indicated party. In said filing,
beneficial ownership of such shares was disclaimed by INVESCO PLC. The
amount and percentage of shares was reported by the company on February 10,
1994.
(9) The percentages are based upon 38,546,916 shares, which equal the
outstanding shares of the Company as of March 11, 1994.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
On June 24, 1992 the Securities and Exchange Commission ("SEC") published for
public comments proposed new rules for executive compensation disclosure. These
proposals are intended to provide stockholders a clear and concise presentation
of the compensation paid to executive officers and to make clear the directors'
reasoning in fundamental compensation decisions.
The following table shows all cash compensation paid or to be paid by the
Company or any of its subsidiaries, as well as certain other compensation paid
or accrued, during the fiscal years indicated, to the Chairman (as one of the
four highest paid executives other than the Chief Executive Officer), the Chief
Executive Officer, and the three highest paid officers of the Company for such
period in all capacities in which they served.
EXHIBIT I
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------------------
Annual Compensation Awards Payouts
-------------------- ---------- --------
Other Securities
Annual Restricted Underlying All other
Name and Compen- Stock Options/ LTIP Compen-
Principal sation Award(s) SARs (#) Payouts sation
Position Year Salary($) Bonus($) ($) ($) (1) (2) ($) ($) (3)
- --------------- ---- -------- -------- ------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. B. Hunt 1993 750,000 96,590 N/A N/A N/A N/A 34,812
Chairman 1992 675,000 283,273 N/A N/A N/A N/A 28,951
1991 633,461 203,986 N/A N/A N/A N/A 25,724
Kirk Thompson 1993 396,398 55,195 N/A 325,500 N/A 82,266 13,043
President and 1992 387,207 165,226 N/A 522,875 N/A 137,110 12,511
CEO 1991 346,875 122,412 N/A N/A N/A N/A 12,251
Jerry Walton 1993 250,000 35,000 N/A 202,500 N/A N/A 13,157
Executive VP 1992 259,615 85,000 N/A 199,500 N/A N/A 75,928
Finance and 1991 52,885 N/A N/A 523,125 N/A N/A N/A
CFO
Paul Bergant 1993 209,769 27,103 N/A N/A N/A 30,938 21,465
Executive VP 1992 196,615 81,178 N/A 157,500 N/A 51,563 12,511
Marketing 1991 175,577 53,899 N/A N/A N/A N/A 12,251
Bryan Hunt 1993 212,851 25,290 N/A 162,000 N/A 18,750 13,043
Vice Chairman 1992 194,952 72,704 N/A 199,500 N/A 31,250 12,511
and Assistant 1991 153,416 45,019 N/A N/A N/A N/A 11,867
Secretary
</TABLE>
(1) The value of the restricted stock awards at the end of the last fiscal year
were $848,375, $925,125, $157,500, and $361,500 for Messrs. Thompson,
Walton, Bergant and Hunt respectively. Such value is determined by the
closing market price for the stock at the grant date. The number of
restricted stock awards held by Messrs. Thompson, Walton, Bergant and Hunt
at the end of the last fiscal year were 37,500, 42,000, 7,500, 17,500
respectively. Shares vest over a four-year period in 10, 20, 30 and 40%
increments. Dividends are payable on all shares.
(2) There were no Options/SARs granted to the above named executives by the
Company.
(3) Reflects contributions to Company retirement plans on behalf of the
executives in the amounts of $12,879, $13,043, $12,932, $13,043, and $13,043
respectively to Messrs. Hunt, Thompson, Walton, Bergant and Bryan Hunt.
7
<PAGE>
Also included in other compensation:
The Company advances premiums on a life insurance policy on the joint lives
of Mr. and Mrs. J. B. Hunt. The Company has advanced $3,015,000 of premiums
on this policy. The premium advances, plus accrued interest at market rates
approximating $262,000 as of December 31, 1993, are a receivable to the
Company from a trust which is the owner and the beneficiary of the policy.
During 1993, the Company paid premiums of $597,406 with respect to the life
insurance policy, of which Mr. and Mrs. J. B. Hunt's share, as reported by the
insurance carrier, consisted of $21,769.
An award tied to a 1992 sales promotion payable to Mr. Bergant in 1993.
Executive relocation payable to Mr. Walton in 1993.
EXHIBIT II
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. B. Hunt N/A N/A N/A / N/A N/A / N/A
Chairman
Kirk Thompson 71,264 766,798 74,910 677,828
President and 38,355/36,555 282,816/395,012
CEO
Jerry Walton N/A N/A N/A / N/A N/A / N/A
Executive VP
Finance and CFO
Paul Bergant N/A N/A 91,125 1,321,844
Executive VP 76,500/14,625 1,123,375/198,469
Marketing
Bryan Hunt N/A N/A 69,300 653,957
Vice Chairman 35,640/33,660 346,522/307,405
and Assistant
Secretary
</TABLE>
The above Exhibit reflects options only. The Company has no SARs at the present
time.
REPORT OF THE COMPENSATION COMMITTEE
AND THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors was comprised during
calendar year 1993 of Bryan Hunt, John A. Cooper, Jr., and Fred K. Darragh, Jr.
Members for the 1994 calendar year are Messrs. Cooper and Darragh, both outside
directors of the Company. In 1993 the Board of Directors approved Mr. J. B.
Hunt's base compensation and reviewed all other executives' base compensation
which was pre-approved by J. B. Hunt.
8
<PAGE>
During 1993 all decisions by the Compensation Committee relative to the
compensation of the Company's executive officers were reviewed by the full
board. In the future, this will not continue with respect to awards pursuant to
the Company's Management Incentive Plan or with respect to performance based
compensation.
Currently, the Company does not believe it will pay any employee remuneration
in 1994 that will cause it to exceed the $1 million deduction limit established
in Section 162(m) of the Internal Revenue Code of 1986, as amended. In the
future, if the Company believes that it will pay in excess of $1 million
remuneration to any employee, it will take appropriate steps to qualify such
remuneration for deductibility pursuant to the Internal Revenue Code.
In accordance with SEC rules designed to enhance disclosure of the
compensation, the following is a report submitted by the above-listed committee
members in their capacity as the Board's Compensation Committee addressing the
Company's compensation policy as it relates to the named officers for fiscal
1993 and performance based compensation for 1994.
COMPENSATION POLICY. The goal of the Company's executive compensation policy
is to ensure that an appropriate relationship exists between executive pay and
the creation of stockholder value, while at the same time motivating and
retaining key employees. To achieve this goal, the Company's executive
compensation policies integrate annual base compensation with bonuses based upon
corporate performance and individual initiatives and performance. Measurement
of corporate performance is primarily based on Company goals and industry
performance levels. Accordingly, in years in which performance goals and
industry levels are achieved or exceeded, executive compensation tends to be
higher than in years in which performance is below expectations. Annual cash
compensation, together with the payment of equity-based incentive, is designed
to attract and retain qualified executives and ensure that such executives have
a continuing stake in the long-term success of the Company. All executive
officers and management, in general, are eligible for and do participate in
incentive compensation plans.
PERFORMANCE MEASURE. In evaluating annual executive compensation, the
Committee and the Chairman of the Board examine earnings per share (EPS), return
on assets and equity, revenue growth and increased value to stockholders. These
factors are compared to corporate goals, prior performance and performance of
the Company's peer group. While the Company is predominantly a truckload
carrier, the Company believes performance should be compared with other major
transportation companies.
FISCAL 1993 COMPENSATION. For Fiscal 1993, the Company's executive
compensation program consisted of (i) base salary, (ii) performance based cash
bonus, (iii) deferred performance based cash bonus, (iv) Management Incentive
Plan.
The peer group used for compensation decisions include some companies included
in the peer group selected for the performance graph. However, most of the
companies used in the compensation process were top trucking and shipping
companies and other top competitive, high performing companies which are leaders
in their industries located in our geographic area. A total of 17 companies are
included in the group. Annual revenues of the companies in the compensation
peer group varied from $260 million to $55 billion.
As a group, the Company's executives base and total compensation generally
falls within the mid-range of the peer group.
BASE SALARY. Executive base salaries are reviewed annually by the Chairman of
the Board to determine if such salaries fall within the range of those persons
holding comparably responsible positions at other companies. In reviewing base
salaries national surveys prepared
9
<PAGE>
by third party consultants are periodically utilized. The salary comparisons not
only include the Company's peer group, but also include companies of similar
size and complexity. Individual salaries are also based on other factors such as
the individual's past performance and potential within the Company and the level
and scope of responsibility.
PERFORMANCE CASH BONUS. Performance cash bonuses are awarded quarterly to
executives primarily based on increases in EPS. The amount of bonus paid is a
percentage of the executive's salary with a subjective discretionary component.
The bonus increases as a percentage of base salary as the percentage of EPS
increases over the prior year. The basics of the bonus plan have not changed
materially in several years. Cash bonuses were lower in 1993 than in 1992
primarily because the Company's EPS decreased although net earnings were up.
There were no discretionary bonuses paid to any of the executives.
PERFORMANCE BASED MANAGEMENT INCENTIVE PLAN. On March 17, 1989, the Board
adopted the J. B. Hunt Transport Services, Inc. Management Incentive Plan
("Plan"). The Plan consolidates all of the existing plans for payment of
incentive compensation. Under the Plan, the Committee, the Chairman of the
Board or the Chief Executive Officer of the Company, if so delegated, has
authority to grant benefits to participants. Participation in the Plan is
restricted to officers, directors, employees and consultants of the Company.
Factors used in establishing the size of awards granted under the Plan were as
follows:
1. Level of responsibility of executive.
2. Level of existing stock ownership of executive.
3. Increased revenue and earnings of Company.
4. Return on equity and assets of Company.
5. Executive's long-term potential with the Company.
6. Debt/equity ratio of the Company.
These factors were used equally by Mr. J. B. Hunt in subjectively determining
the amount of the stock awards. The Compensation Committee had no role in
setting stock awards for 1993.
The Plan allows the Compensation Committee, the Chairman of the Board, or the
Chief Executive Officer to make awards in the form of restricted stock, money
credits, share units, performance units, stock options or stock appreciation
rights to eligible Plan participants. Any stock options or awards to be granted
under the Plan are restricted to shares previously authorized for that purpose,
i.e., 3,000,000 shares of Company stock. Since the Plan incorporates the 1984
Stock Option Plan, all options issued under the 1984 Plan are subtracted from
the 3,000,000 share limit to determine the number of options or awards that may
be issued. The Compensation Committee, or the Chairman of the Board or the
Chief Executive Officer, as the case may be, is authorized to determine the
amount, terms and conditions of any grant of incentive compensation under the
Plan, subject to the share limitations stated above.
Based on the above factors, the Company and the Chairman of the Board granted
32,000 shares of restricted stock in the amount of $690,000 to executive
officers in fiscal year 1993. These restricted shares vest over a period of
four years. In the future, the award of shares will be approved by the
Compensation Committee.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER COMPENSATION. The Company has tried to
set base salary and overall compensation for Messrs. Hunt and Thompson
competitively with companies of similar size and aligned with companies which
lead their respective industries. The goal is to reward these executives for
corporate performance in line with the interests of the stockholders.
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Cash bonuses for Messrs. Hunt and Thompson are determined by the previously
mentioned formula relating bonuses to quarterly increases in EPS. Even though
earnings went up, comparative annual EPS were down approximately 3%.
Consequently, total 1993 cash compensation of Messrs. Hunt and Thompson was down
12% and 18% respectively. Bonus payments to Messrs. Hunt and Thompson were
reduced by 66% for each executive. There were no discretionary bonuses paid.
In accordance with the Company's policy of aligning executive interest with
the interest of stockholders, Mr. Thompson was granted 14,000 shares of
restricted stock valued at $20.25 per share at the date of grant in fiscal year
1993. These shares vest over the next four years. Mr. Hunt made the final
determination of Mr. Thompson's stock award based on the factors previously
mentioned.
Messrs. Hunt and Thompson's cash compensation are at the upper quartile of the
NASDAQ peer group and in the upper and middle quartile respectively of the other
peer groups.
Relating to long-term compensation, Mr. Hunt, the founder of the Company and
substantial stockholder, has never been granted any stock under the Management
Incentive Plan. Mr. Thompson's long-term incentive compensation is in the mid-
range of the comparable companies listed above.
Additionally, both Messrs. Hunt and Thompson participate in the Company's
401(k) and profit sharing plans.
SUMMARY. The Committee has adopted the philosophy of the Company, i.e., that
linking executive compensation to corporate performance results in aligning
compensation with corporate goals and stockholder interests.
BOARD OF DIRECTORS 1993 EXECUTIVE COMPENSATION COMMITTEE
J. B. Hunt John A. Cooper, Jr., Chairman
J. Bryan Hunt, Jr. Fred K. Darragh, Jr.
Johnelle D. Hunt J. Bryan Hunt, Jr.
John A. Cooper, Jr.
Fred K. Darragh, Jr.
Wayne Garrison
Gene George
Roy Grimsley
Lloyd Peterson
Kirk Thompson
1994 PERFORMANCE BASED COMPENSATION. For fiscal year 1994, the Committee
approved the Company's previously established cash bonus program for the above
named executives and officers that is in direct correlation to an increase in
Company EPS. The executives can earn no more than 65% of their base
compensation determined by the percentage increase of 1994 over 1993 EPS.
The Board of Directors has also established the equity-based management
incentive award program, previously described. Grants to each of the executives
cannot exceed 50,000 shares per executive. These equity incentive awards are
subject to a vesting period and the general operating procedures of the
Company's Management Incentive Plan.
1994 EXECUTIVE COMPENSATION COMMITTEE
John A. Cooper, Jr., Chairman
Fred K. Darragh, Jr.
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PERFORMANCE GRAPH
The following graph presents a five year comparison of cumulative total
returns for the Company, the S&P 500 composite index and the CRSP Index for
NASDAQ Trucking and Transportation Stocks (CRSP Transportation Index). The CRSP
Transportation Index was prepared by the Center for Research in Security Prices
and includes all NASDAQ traded trucking and transportation companies classified
under SIC codes 37, 42, 44, 45 and 47. A listing of the companies included in
the CRSP Transportation Index is available upon request from the Company. The
values on the graph show the relative performance of an investment of $100 made
on December 31, 1988 in Company common stock and in each of the indices.
[PERFORMANCE GRAPH APPEARS HERE]
Performance Graph
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93
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S&P 500 $100 $132 $128 $166 $179 $197
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CRSP Transportation 100 110 88 125 153 186
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JB Hunt 100 88 79 137 161 162
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick ("Peat Marwick") as the
principal independent public accountants for fiscal year 1994 and recommends
that the stockholders vote for ratification of such appointment. Peat Marwick
has been the principal accountant for the Company since 1982. Notwithstanding
the selection, the Board, in its discretion, may direct the appointment of a new
independent accounting firm at any time during the year if the Board feels that
such a change would be in the best interests of the Company and its
stockholders.
Representatives of Peat Marwick will be present at the stockholders' meeting
and will have an opportunity to make a statement to the stockholders, if
desired, and will be available to respond to appropriate questions from the
stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
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EXPENSES
The expense of soliciting proxies, including the cost of preparing, assembling
and mailing the material submitted herewith, will be paid by the Company. The
Company will also reimburse brokerage firms, banks, trustees, nominees and other
persons for the expense of forwarding proxy material to beneficial owners of
shares held by them of record. Solicitations of proxies may be made personally
or by telephone or telegraphic communications, by directors, officers and
regular employees, who will not receive any additional compensation in respect
of such solicitations.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1995 Annual Meeting
of stockholders must be received by the Secretary of the Company no later than
January 31, 1995 for inclusion in the 1995 Proxy Statement and Form of Proxy.
GENERAL
Proxies duly executed and returned by a stockholder, and not revoked prior to
or at the meeting, will be voted in accordance with the instructions thereon.
The management of the Company does not know of any business to be brought
before the meeting other than described in this Proxy Statement, but it is
intended that as to any such other business, a vote may be cast pursuant to the
proxy in accordance with the judgment of the persons acting thereunder.
STOCKHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY ENCLOSED
IN THE ENVELOPE PROVIDED. PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS
FOR THE MEETING, AND YOUR COOPERATION WILL BE APPRECIATED.
By Order of the Board of Directors
/s/ Johnelle D. Hunt
JOHNELLE D. HUNT
Secretary
13
<PAGE>
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P R O X Y
J. B. HUNT TRANSPORT SERVICES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL STOCKHOLDERS' MEETING, MAY 12, 1994
The undersigned stockholder(s) of J. B. HUNT TRANSPORT SERVICES, INC., an Ar-
kansas corporation hereby constitute(s) and appoint(s) J. B. HUNT or KIRK
THOMPSON, or either of them, the true and lawful agent and attorney-in-fact for
the undersigned, with power of substitution, to vote the stock owned by the un-
dersigned or registered in the name of the undersigned, at the meeting on May
12, 1994, at 10:00 a.m., and any adjournments thereof, in the transaction of
the following business:
ELECTION OF DIRECTORS, NOMINEES:
J. B. Hunt; Johnelle Hunt; Bryan Hunt;
Kirk Thompson; John A. Cooper, Jr.;
Fred K. Darragh, Jr.; Wayne Garrison;
Gene George; Roy Grimsley; Lloyd E.
Peterson
CHANGE OF ADDRESS:
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(If you have written in the above space, please mark the corresponding box on
the reverse side of this card)
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 PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
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- -----
X Please mark your votes as in this example.
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|2600
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
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1. Election of Directors
(see reverse)
FOR WITHHELD
[_] [_]
For, except vote withheld from the following nominee(s):
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2. To ratify the appointment of KPMG Peat Marwick as the Company's independent
public accountant for the next fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, the Proxies are authorized to transact such other
business as may properly come before the meeting or any adjournment thereof.
[_] Change of Address/Comments on Reverse Side
SIGNATURE(S) _______________________________________________ DATE _________ 1994
NOTE: 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. If a partnership, please sign in
partnership name by authorized person.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
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