<PAGE>
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:
[_] 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 (S)240.14a-11(c) or (S)240.14a-12
J. B. HUNT TRANSPORT SERVICES, INC.
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 (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:
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 9, 1996 AT 10:00 A.M.
The Annual Meeting of Stockholders of J. B. Hunt Transport Services, Inc.
(the "Company") will be held May 9, 1996 at 10:00 a.m. (CST) at the Company's
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 approve the Chairman's Stock Option Incentive Plan
(3) To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the next fiscal year.
(4) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record on March 11, 1996 will be entitled to vote at
the meeting or any adjournments thereof. The stock transfer books will not be
closed.
A copy of the 1995 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
JOHNELLE HUNT
Secretary
Lowell, Arkansas
April 1, 1996
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 9, 1996
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 1995 Annual Report are being
mailed to the stockholders on or about April 1 1996. Proxies will be voted at
the Annual Meeting of Stockholders of the Company ("Annual Meeting") to be held
May 9, 1996 at 10:00 a.m. at the Company's 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 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, 1996
total 38,030,994, 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, 1996. 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 ratification of auditors. The
election of directors will be approved if each director nominee receives a
plurality of the votes cast. Ratification of auditors will also require 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 11, 1995
The 1995 Annual Meeting was held on May 11, 1995. At that meeting
88.946 percent of eligible shares were voted. The ten nominees for the Board of
Directors were elected by a vote of 99.623 percent of the total shares voted.
The Amended Management Incentive Plan was approved by a vote of 93.977 percent
of the shares voted.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
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.
2
<PAGE>
J. B. HUNT DIRECTOR 1961
Age 69; Senior Chairman of the Board of Directors of the Company. Founder of
the J. B. Hunt Company in 1961, he has served as Chairman of the Board from
1982 until May 16, 1995. Mr. Hunt is a director of the American Trucking
Association Foundation, and the Texas Mexican Railway Company (a subsidiary of
Transportacion Maritima Mexicana).
WAYNE GARRISON DIRECTOR 1981
Age 43; assumed the responsibilities of Chairman of the Board May 16, 1995.
Mr. Garrison joined the Company in 1976 as Plant Manager. He served the
Company as Vice President of Finance in 1978, Executive Vice President in 1979,
President in 1982, Chief Executive Officer in 1987 and Vice Chairman of the
Board from 1986 to 1991.
JOHNELLE HUNT DIRECTOR 1993
Age 64; Secretary of the Company. She served as Credit Manager from 1962 to
1987, was elected Secretary-Treasurer in 1972 and served in that capacity until
October 1988, at which time she was elected Secretary.
BRYAN HUNT DIRECTOR 1991
Age 37; Vice Chairman and Assistant Secretary of the Board and Chief Operating
Officer of the Van Division of J. B. Hunt Transport, Inc. Joining the Company
through its Management Training Program in 1983, he served as an outside
marketing representative in 1984 and as the Director of Personnel from 1985 to
1987. He was appointed Assistant to the Chairman of the Board in February 1988
and Assistant Secretary in October 1988.
KIRK THOMPSON DIRECTOR 1985
Age 42; President and Chief Executive Officer of the Company. Mr. Thompson, a
certified public accountant, joined the Company in 1973. Between 1978 and 1979
he was associated with KPMG Peat Marwick. Returning to the Company in 1979, he
served as Vice President of Finance until 1984, Executive Vice President and
Chief Financial Officer until 1985, President and Chief Operating Officer from
1986 until 1987 when he was elected President and Chief Executive Officer.
JOHN A. COOPER, JR. DIRECTOR 1990
Age 57; Chairman of the Board of Cooper Communities, Inc. (a community
development company). He serves as a director on the Boards of Wal-Mart
Stores, Inc. and Entergy Corporation.
FRED K. DARRAGH, JR. DIRECTOR 1967
Age 79; 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).
GENE GEORGE DIRECTOR 1961
Age 73; Chairman of the Board of George's Inc. (an integrated poultry company).
He is also a director of First National Bank of Springdale, Arkansas Protein,
and a member of the Board of Trustees for Springdale Memorial Hospital.
THOMAS L. HARDEMAN DIRECTOR OCTOBER 1994
Age 58; President of BTTB Investments, a private investment company. Retiring
from United Parcel Service after 35 years, he served as Corporate Vice
President from 1984 until his retirement in April 1994. He is the former
Chairman of the Advisory Board for the Commercial Vehicle Safety Alliance,
former board member of the Professional Truck Driver Institute of America, and
served on the American Legislative Exchange Council and the State Government
Affairs Council.
3
<PAGE>
LLOYD E. PETERSON DIRECTOR 1990
Age 83; Chairman of Peterson Farms, Inc. (an integrated poultry company,
poultry breeder and cattle farm operation). He also serves as Chairman of the
Board for Decatur State Bank and Director Emeritus of Grand Federal Bank.
Under the terms of the Company's articles and Arkansas law, the Board of
Directors can fix or change the number of directors by up to 30% of the number
of directors last approved by the stockholders.
Each of the foregoing nominees is currently serving as a director of the
Company and each was elected at the last Annual Meeting. Johnelle Hunt is the
wife of J. B. Hunt and Bryan Hunt is the son of J. B. and Johnelle Hunt. There
are no other family relationships among the foregoing nominees.
Under the bylaws of the Company, directors serve for a term to expire at the
next Annual Meeting 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.
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 eight times during the 1995 fiscal year. During this period
all members of the Board participated in at least 75% of all meetings including
the Annual 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 is comprised of Messrs. J. B.
Hunt, Garrison and 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 Messrs. George, (Chairman) Peterson and 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 twice during
the year, is comprised of Messrs. Cooper (Chairman), Darragh, and Hardeman. 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
4
<PAGE>
Revenue Code. A report follows, prepared by the Compensation Committee,
discussing the Company's policies towards executive compensation.
COMPENSATION OF DIRECTORS. Directors of the Company were paid $2,500 per
board meeting attended and $500 for committee attendance. Outside directors
were reimbursed for their travel expenses. Beginning July 20, 1995, outside
directors of the Company were paid $3,000 for each board meeting attended,
$1,000 for each committee meeting attended and $2,000 for each committee meeting
chaired. Inside directors (who are also employees) were not compensated for
meetings attended. In addition, each outside director was paid $15,000 in
Company stock (or 852 shares on July 20, 1995) as an annual retainer.
The Company does not have a standing nominating committee. The Board nominates
persons to stand for election as directors. 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.
EXECUTIVE OFFICERS
The Company's executive officers are:
NAME AGE POSITION WITH COMPANY
- --------------------------- --- ----------------------------------------------
J. B. Hunt (1) 69 Senior Chairman of the Board; Director
Wayne Garrison (1) 43 Chairman of the Board; Director
Bryan Hunt (1) 37 Vice Chairman of the Board and Assistant
Secretary; Chief Operating Officer, Van
Division; Director
Johnelle Hunt (1) 64 Secretary; Director
Kirk Thompson (1) 42 President and Chief Executive Officer;
Director
Paul R. Bergant (2) 49 Executive Vice President, Marketing
Stephen L. Palmer (3) 41 Executive Vice President, Human Resources and
Risk Management
Bob D. Ralston (4) 49 Executive Vice President, Maintenance
Jerry W. Walton (5) 49 Executive Vice President, Finance and Chief
Financial Officer
(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.
(3) 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.
(4) Mr. Ralston joined the Company in 1978 as Shop Foreman. He has served as
Executive Vice President of Maintenance since 1989.
(5) 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 was a partner with KPMG Peat Marwick.
5
<PAGE>
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, 1996 there
were 38,030,994 shares outstanding held by 2,257 stockholders of record.
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 29, 1996, the
beneficial owner of more than five percent of the Company's Common Stock, by
each named executive officer (Exhibits I, II and III), and by all officers and
directors as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------------
DIRECTORS AND OFFICERS SHARES PERCENT (11)
- -------------------------- ---------- ------------
<S> <C> <C>
J. B. Hunt (1) 5,179,744 39.9
Wayne Garrison (2) 1,734,826 4.6
Kirk Thompson (3) 209,250 *
John A. Cooper, Jr. 7,352 *
Fred K. Darragh, Jr. (4) 264,548 *
Gene George (5) 1,170,366 3.1
Thomas L. Hardeman 852 *
Bryan Hunt (6) 239,191 *
Johnelle Hunt 24,321 *
Lloyd E. Peterson 1,275,852 3.4
Jerry W. Walton (7) 56,424 *
All executive officers and directors 20,458,221 53.8
as a group (14 persons) (8)
</TABLE>
*Less than 1 percent
<TABLE>
<CAPTION>
OTHER PRINCIPAL STOCKHOLDERS
- ----------------------------
<S> <C> <C>
FMR Corp. (9) 4,283,000 11.3
82 Devonshire Street, Boston, MA
INVESCO PLC (10) 3,360,450 8.8
11 Devonshire Square, London, England
</TABLE>
(1) Mr. Hunt's address is 615 J. B. Hunt Corporate Drive, Lowell, Arkansas
72745. Includes 12,527,652 shares owned by Mr. Hunt in a family limited
liability company.
(2) Includes shares owned by immediate family.
(3) Includes options to purchase 30,300 shares exercisable as of February 29,
1996.
(4) Shares owned by the Frederick K. Darragh, Jr. Revocable Trust, Frederick
K. Darragh, Jr., Trustee.
(5) Includes 730,989 shares owned by a partnership of which Mr. George is a
general partner and 439,377 shares owned by Mr. George in a limited
partnership.
(6) Includes shares owned by immediate family and options to purchase 6,550
shares exercisable as of February 29, 1996.
(7) Includes 8,480 shares held in trust in which Mr. Walton is designated as
the trustee and options to purchase 1,800 shares exerciseable as of
February 29, 1996. 22,500 shares are subject to restriction on resale
until October 1996.
(8) Includes options to purchase 49,350 shares exercisable as of February 29,
1996.
6
<PAGE>
(9) Based on Schedule 13G filed by the indicated party. In said filing,
beneficial ownership of such shares was disclaimed by FMR Corp. The amount
and percentage of shares was reported by the company on February 14, 1996.
(10) 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,
1996.
(11) The percentages are based upon 38,030,994 shares which equal the
outstanding shares of the Company as of March 11, 1996.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
On June 24, 1992 the Securities and Exchange Commission ("SEC")
published for public comment 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 Senior Chairman,
Chairman (as two of the four highest paid executives other than the Chief
Executive Officer), the Chief Executive Officer, and the two 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
------------------- ------ -------
Securities
Annual Restricted Underlying All other
Name and Compen- Stock Options/ LTIP Compen-
Principal Bonus ($) sation Award(s) SARs (#) Payouts sation
Position Year Salary ($) (1) ($) ($) (2) (3) ($) ($) (4)
- ---------------- ------ ---------- --------- ------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. B. Hunt 1995 520,673 0 N/A N/A N/A N/A 43,318
Sr. Chairman 1994 750,000 133,125 N/A N/A N/A N/A 36,867
1993 750,000 96,590 N/A N/A N/A N/A 34,812
Wayne Garrison 1995 229,327 0 N/A N/A N/A N/A 12,240
Chairman 1994 N/A N/A N/A N/A N/A N/A N/A
1993 N/A N/A N/A N/A N/A N/A N/A
Kirk Thompson 1995 400,000 0 N/A N/A 100,000 N/A 12,240
President and 1994 400,000 71,000 N/A 144,500 33,000 54,844 11,828
CEO 1993 396,398 55,195 N/A 325,500 N/A 82,266 13,043
Bryan Hunt 1995 260,000 0 N/A N/A 100,000 N/A 12,240
Vice Chairman 1994 227,690 39,937 N/A 105,450 16,000 12,500 11,828
and Assistant 1993 212,851 25,290 N/A 162,000 N/A 18,750 13,043
Secretary
Jerry Walton 1995 250,000 0 N/A N/A 70,000 N/A 12,240
Executive VP 1994 250,000 44,375 N/A 68,000 18,000 N/A 12,098
Finance and 1993 250,000 35,000 N/A 202,500 N/A N/A 13,157
CFO
</TABLE>
7
<PAGE>
(1) There was no bonus earned for fiscal year 1995. All bonuses are reported in
the year in which the bonus was earned.
(2) No restricted stock awards were made in fiscal year 1995. The value of the
restricted stock awards at the end of the last fiscal year were $628,963,
$243,378, and $618,075 for Messrs. Thompson, Hunt and Walton respectively.
Such value is determined by the closing market price for the stock at the
end of fiscal 1995. The number of restricted stock awards held by Messrs.
Thompson, Hunt and Walton at the end of the last fiscal year were 37,550,
14,530 and 36,900 respectively. Shares vest over a four-year period in 10,
20, 30 and 40% increments with the exception of 22,500 shares for Mr.
Walton which vest October 1, 1996. Dividends are payable on all shares.
(3) There were no stock appreciation rights ("SARs") granted to the above named
executives by the Company.
(4) Includes contributions to Company retirement plans on behalf of each of the
executives in the amounts of $12,240.
Also included in other compensation:
The Company advances premiums on life insurance policies on the lives of
Mr. and Mrs. J.B. Hunt. The Company has advanced $3,877,635 of premiums on
these policies. The premium advances, plus accrued interest at market rates
approximating $590,000 as of December 31, 1995, are a receivable to the
Company from a trust which is the owner and beneficiary of the policy.
During 1995, the Company paid premiums of $597,406 with respect to the life
insurance policy, of which Mr. Hunt's share, as reported by the insurance
carriers, consisted of $31,078.
EXHIBIT II
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Name and Shares Acquired Exercisable/ Exercisable/
Position on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ----------------- --------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
J. B. Hunt N/A N/A N/A N/A
Sr. Chairman N/A N/A
Wayne Garrison N/A N/A N/A N/A
Chairman N/A N/A
Kirk Thompson 17,355 123,654 30,300 E 0 E
President and 132,700 U 0 U
CEO
Bryan Hunt 0 0 10,510 E 28,794 E
Vice Chairman 134,200 U 47,856 U
and Assistant
Secretary
Jerry Walton 0 0 1,800 E 0 E
Executive VP 86,200 U 0 U
Finance and CFO
</TABLE>
The above Exhibit reflects options only. The Company has no SARs at the present
time.
8
<PAGE>
EXHIBIT III
OPTION GRANTS IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
Number of
Securities Percent
Underlying of Total Option Potential Realizable Value ($) (1)
Name and Options Options Price Expiration ----------------------------------
Position Granted Granted ($/Sh) Date 5% 10%
- --------------------------- ------------------- ------------- ------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
J. B. Hunt N/A N/A N/A N/A N/A N/A
Sr. Chairman
Wayne Garrison 2,500,000 (2) 60.59 17.625 7/20/01 14,985,464 33,996,907
Chairman
Kirk Thompson 100,000 2.42 17.625 11/02/06 1,251,973 3,266,118
President and
CEO
Bryan Hunt 100,000 2.42 17.625 7/20/06 1,251,973 3,266,118
Vice Chairman
and Assistant
Secretary
Jerry Walton 70,000 1.69 17.625 7/20/06 876,381 2,286,283
Executive VP
Finance and CFO
</TABLE>
The above Exhibit reflects options only. The Company has no SARs at the present
time.
(1) The 5% and 10% assumed rates of appreciation are mandated by the rules of
the SEC and are not an estimate or projection of future prices or
appreciation of of the Company's Common Stock or the actual future value of
these options.
(2) This assumes stockholder approval of the Chairman's Plan as described in
this Proxy Statement.
REPORT OF THE COMPENSATION COMMITTEE
AND THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors was comprised during
calendar year 1995 of Messrs. Cooper (Chairman), Darragh, and Hardeman, all
outside directors of the Company. Members for the 1996 calendar year are
Messrs. Cooper, Darragh and Hardeman. In 1995 the Compensation Committee and
the Board of Directors approved all executive officers' base compensation. The
Compensation Committee met twice in 1995.
In accordance with SEC rules designed to enhance disclosure of the Company's
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
1995 and performance based compensation for 1996.
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
9
<PAGE>
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 examines earnings per share (EPS), return on assets and equity,
revenue growth, increased value to stockholders and return on sales. 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 1995 COMPENSATION. For fiscal 1995, the Company's executive
compensation program consisted of (i) base salary, (ii) performance based cash
bonus, and (iii) Management Incentive Plan benefits.
The peer group used for compensation decisions include some companies 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 the Company's geographic area.
As a group, the Company's executives base and total compensation generally
falls within the range of the peer group.
BASE SALARY. Executive base salaries were reviewed 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 by third party consultants were 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 the Company's return on sales. The amount of bonus
paid is a percentage of the executive's salary. The bonus increases as a
percentage of base salary as the Company's return on sales increases. No cash
bonuses were paid relating to calendar 1995.
PERFORMANCE BASED MANAGEMENT INCENTIVE PLAN. On March 17, 1989, the Board
adopted the J. B. Hunt Transport Services, Inc. Management Incentive Plan (the
"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 the Company.
4. Return on equity and assets of the Company.
5. Executive's long-term potential with the Company.
6. Debt/equity ratio of the Company.
7. Operating ratio of the divisions and the return on sales of the Company
as a whole.
10
<PAGE>
These factors were used in subjectively determining the amount of the
stock awards. The Compensation Committee approved all executive stock awards for
1995.
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 SARs 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., 5,000,000
shares of Company stock. Since the Plan incorporates the 1984 Stock Option
Plan, all options issued under the 1984 Plan are deducted from the 5,000,000
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
plan limitations previously approved by the stockholders.
Based on the above factors, the Company, approved by the Compensation
Committee, granted 270,000 stock options at an exercise price of $17.625 per
share to the top four executive officers in fiscal year 1995 other than Wayne
Garrison's whose options are covered in a separate plan pending stockholder
approval. The options vest over a period of ten years.
SENIOR CHAIRMAN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER COMPENSATION.
On May 16, 1995, Mr. J. B. Hunt assumed the position of Senior Chairman. Wayne
Garrison, a member of the Board of Directors and former President and Chief
Executive Officer, assumed the position of Chairman. The Committee has tried to
set base salary and overall compensation for Messrs. Hunt, Garrison 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.
Cash bonuses for Messrs. Hunt, Garrison and Thompson are determined by
the previously mentioned formula relating bonuses to quarterly return on sales.
As the return on sales criteria was not met, no cash bonuses were paid.
Subject to stockholder approval, and as subsequently described in this
Proxy, Mr. Garrison was granted 2,500,000 options at $17.625 which vest in five
years.
In accordance with the Committee's policy of aligning executive
interest with the interest of stockholders, Mr. Thompson was granted 100,000
options at $17.625 which vest over a ten year period.
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.
Messrs. Hunt, Garrison and Thompson's cash compensation is comparable
to the NASDAQ peer group and other peer groups.
Additionally, Messrs. Hunt, Garrison and Thompson participate in the
Company's retirement plan.
1996 PERFORMANCE BASED COMPENSATION. For fiscal year 1996, the
Company's previously established cash bonus program for the above named
executives that is in direct correlation to the Company's return on sales
remains in place at the date of this filing. As returns on sales increase, the
cash bonuses increase.
11
<PAGE>
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.
1995 COMPENSATION COMMITTEE
John A. Cooper, Jr., Chairman
Fred K. Darragh, Jr.
Thomas L. Hardeman
PERFORMANCE GRAPH
The following graph presents a five year comparison of cumulative
total returns for the Company, the S&P 500 composite index and NASDAQ Trucking
Stocks (CRSP Transportation Index). The CRSP Transportation Index was prepared
by the Center for Research in Security Prices and includes all NASDAQ traded
trucking companies classified under SIC codes 4200-4299. 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, 1990 in Company Common Stock and in each
of the indices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
J. B. HUNT, S&P 500, NASDAQ
[GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
- ------------------------------------------------------------------------
J. B. HUNT 100.0 173.6 203.6 205.5 136.2 151.3
- ------------------------------------------------------------------------
S&P 500 100.0 130.7 140.7 154.4 156.5 215.4
- ------------------------------------------------------------------------
NASDAQ 100.0 151.6 188.2 211.9 199.6 160.2
- ------------------------------------------------------------------------
</TABLE>
12
<PAGE>
PROPOSAL TWO
PROPOSAL TO APPROVE THE CHAIRMAN'S STOCK OPTION INCENTIVE PLAN
On October 19, 1995, disinterested members of the Company's Board
of Directors voted to adopt, subject to stockholder approval, the Chairman's
Stock Option Incentive Plan (the "Chairman's Plan"). The purpose of the
Chairman's Plan is to attract and retain the services of Mr. Wayne Garrison.
Mr. Garrison is the Chairman of the Board of Directors and a former President of
the Company and has extensive experience and knowledge in the trucking business.
The Chairman's Plan provides for the issuance of options to purchase up to a
total of 2,500,000 shares of Common Stock, $0.01 par value, of the Company.
Stockholder approval is required for adoption of the Chairman's Plan. The
stockholders must approve the plan by an affirmative vote of the majority of the
votes cast in person or by proxy at the Annual Meeting in May of 1996.
If approved, the Chairman's Plan will be effective as of October 19,
1995. It grants 2,500,000 options to purchase Common Stock, $0.01 par value, of
the Company at $17.625 per share, which was higher than the fair market value of
the stock on October 19, 1995. This price is based upon the fair market value
of the Company stock on July 20, 1995, the date on which all other option awards
were made to Company employees. The plan is administered by the Compensation
Committee of the Board of Directors of the Company comprised solely of two or
more directors, each of whom is a disinterested director within the meaning of
Rule 16b-3, promulgated under the Securities Exchange Act of 1934. The plan will
terminate five years after it becomes effective unless terminated prior thereto
by action of the Compensation Committee. Following termination, no further
grants can be made under the plan, but termination does not affect the rights of
Mr. Garrison for a period of one year following termination. Mr. Garrison is
the only eligible participant ("Participant") who may receive options under the
Chairman's Plan.
Options granted pursuant to the Chairman's Plan will mature and become
exerciseable only after stockholder approval and the earlier of:
(1) July 20, 2000;
(2) termination of the employment of the Chairman by the Company
--------------
for any reason other than gross negligence or conduct
constituting a felony;
(3) death of the Participant; or
(4) permanent disability of the Participant.
Under any event, all options shall expire and terminate if not
exercised one (1) year from maturity. The options are nonassignable or
transferable other than by will or the laws of decent and distribution during
the lifetime of the Participant.
Provisions of the Chairman's Plan allow for an adjustment of the
number of options if a recapitalization, reclassification of common shares is
effected in connection with a merger or consolidation or sale by the Company of
all or any part of its assets, or its shares are exchanged for a different
number or class of shares of stock or other securities, or for shares of stock
or securities of another corporation.
The Plan may be amended by the Compensation Committee at any time and
in any respect except that stockholders must approve any amendment which would:
(1) increase or decrease the maximum number of shares of Common
Stock available under the Chairman's Plan;
(2) modify the terms under which the option may be exercised by
the Participant under the Plan; or
(3) materially increase plan benefits to the Participant under
the Plan.
13
<PAGE>
It is intended that the Chairman's Plan will be qualified under Rule
16b-3 of the Exchange Act. A grant of options will not result in taxable income
to an optionee or a tax deduction for the Company. The exercise of an option
will result in taxable ordinary income to the optionee and a corresponding
deduction for the Company, and in each case equal to the difference between the
fair market value of the shares on the date the option was granted and the fair
market value on the date the option was exercised.
NEW PLAN BENEFITS
CHAIRMAN'S STOCK OPTION INCENTIVE PLAN
NAME AND POSITION (1) DOLLAR VALUE (2) NUMBER OF UNITS
- --------------------- ---------------- ---------------
Wayne Garrison N/A 2,500,000 (3)
Chairman of the Board
(1) Wayne Garrison is the only executive officer eligible to participate in the
Chairman's Plan.
(2) All options under the Chairman's Plan were granted at $17.625. The dollar
value benefit is based upon future appreciation in the Company's Common
Stock and is not presently determinable. The highest price for the
Company's Common Stock for 1995 was $20.125 on March 6, 1995. If this plan
had been in effect during 1995 and if Mr. Garrison has been able to
exercise these options on March 6, 1995, the option exercise price would
have been $44,062,500, which would have resulted in a value of $6,250,000
for the 2,500,000 shares available under this plan. On February 29, 1996,
the price of the Company's Common Stock was $18.25.
(3) Represents options granted on October 19, 1995, subject to stockholder
approval.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP ("Peat
Marwick") as the principal independent public accountants for fiscal year 1996
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 RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL.
CERTAIN TRANSACTIONS
The Company had an aircraft agreement with Hunt Air, Inc., a
corporation owned by Mr. J. B. Hunt, on a month-to-month basis with an aggregate
obligation of $103,900 for fiscal year 1995. The agreement was terminated in May
1995.
14
<PAGE>
SECTION 16 REQUIREMENTS
The Company's executive officers, directors and persons who own more than ten
(10) percent of the Company's Common Stock are required to file under the
Securities and Exchange Act of 1934 reports of ownership and changes of
ownership with the SEC.
Based solely on information provided to the Company by individual directors,
executive officers and persons who own more than ten (10) percent of the
Company's Common Stock, each of the following had one late filing: Fred K.
Darragh, Jr., J. B. Hunt, Johnelle Hunt, J. B. Hunt LLC, Bob Ralston and Kirk
Thompson.
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 1997 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than December 13, 1996 for inclusion in the 1997 Proxy Statement and Form
of Proxy. To be so included, a proposal must also comply with all applicable
provisions of Rule 14A under the Securities Exchange Act of 1934.
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
JOHNELLE HUNT
Secretary
15
<PAGE>
CHAIRMAN'S STOCK OPTION INCENTIVE PLAN
I. NAME; PURPOSE
1.1 NAME. This instrument shall be known as the Chairman's Stock Option
Incentive Plan (the "Plan").
1.2 PURPOSE. The Plan is designed to give incentive compensation to the
chairman of the board of directors of J.B. Hunt Transport Services, Inc. (the
"Participant") and thereby benefit a key employee of J.B. Hunt Transport
Services, Inc. and any entity in which J.B. Hunt Transport Services, Inc., or
any subsidiary owns, directly or indirectly, a majority of the voting stock
(collectively these entities shall be the "Company").
The overall objectives of the Plan are to increase the long-term financial
success of the Company, and increase the value of the Company to its
stockholders, by attracting and retaining a highly qualified chairman who is
instrumental in the continued success of the Company.
1.3 OVERVIEW OF THE PLAN BENEFITS. The benefits to be provided under this
Plan, although more specifically set out herein, are stock options (collectively
the "Options") subject to the terms and conditions stated in this Plan.
II. CREATION OF COMMITTEE;
ADMINISTRATION OF THE PLAN;
PARTICIPANTS; ETC.
2.1 THE COMMITTEE. The Plan shall be administered by a Special
Compensation Committee (the "Special Committee") of the Board of Directors of
J.B. Hunt Transport Services, Inc. (the "Board"), comprised solely of two or
more directors, each of whom is a "disinterested person" within the meaning of
Rule 16b-3 (or any successor rule or regulation) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
2.2 GRANT AND TERMS OF THE OPTIONS; ADMINISTRATION OF THE PLAN. The
Special Committee may grant Plan Benefits to Participants (hereafter defined) on
the terms and subject to the conditions stated in this Plan.
The Special Committee shall, subject to the limitations of this Plan, have
full power and discretion to interpret and administer the Plan and to determine
the number of shares subject to the grant, the fair market value of the Common
Stock when necessary, the restriction and forfeiture provisions relating to the
Options, the time and conditions of vesting or exercise, the conditions, if any,
under which time of vesting or exercise may be accelerated, the conditions,
form, time, manner and terms of payment of any award, and all other terms
<PAGE>
and conditions of the grant provided that all stock options shall be granted in
compliance with and subject to the terms of Section 3 of this Plan. No options
----------
may be exercised prior to approval of this Plan by the shareholders.
- --------------------------------------------------------------------
The interpretation by the Special Committee of the terms and provisions of
the Plan and the administration thereof, and all action taken by the Special
Committee, shall be final, binding and conclusive on the Company, its
stockholders, the Participant, and upon their respective beneficiaries,
successors and assigns, and upon all other persons claiming under or through any
of them. By accepting the Options the Participant, and each person claiming
under or through him, shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, all provisions of the Plan and
any action or decision under the Plan by the Company or the Special Committee.
2.3 PLAN PARTICIPANT. The sole Participant of the Plan shall be the
Chairman of the Board of J.B. Hunt Transport Services, Inc.
2.4 GRANT. The Participant is hereby granted, subject to the provisions
of Section 3, the right to purchase 2,500,000 shares of the common stock, $0.01
par value, at $17 5/8 per share.
2.5 SHARES OF COMMON STOCK. Shares of Common Stock to be issued may be
authorized and unissued shares of Common Stock, treasury stock or a combination
thereof. It is contemplated that the Company, although under no legal
obligation to do so, may from time to time purchase shares of Common Stock for
the purpose of paying all or any portion of any award payable in or measured by
the values of shares of Common Stock, or for the purpose of replacing shares
issued or transferred in payment of all or part of an award. All shares so
purchased shall, unless and until transferred in payment of an award, be at all
times the property of the Company available for any corporate purposes, and no
Participant or employee or beneficiary, individually or as a group, shall have
any right, title or interest in any shares of Common Stock so purchased.
2.6 ADJUSTMENT PROVISIONS. In the event that any recapitalization, or
reclassification, split-up or consolidation of shares of Common Stock shall be
effective, or the outstanding shares of Common Stock are, in connection with a
merger or consolidation of the Company or a sale by the Company of all or a part
of its assets, exchanged for a different number or class of shares of stock or
other securities of the Company, or for shares of the stock or other securities
of any other corporation, or new, different or additional shares or other
securities of the Company or of another corporation are received by the holders
of Common Stock or any distribution is made to the holders of Common Stock other
than a cash dividend, the maximum number of class of shares that may be issued
or transferred under the Plan shall in each case be equitably adjusted. If an
equitable adjustment cannot be made or the Board determines that further
adjustment is appropriate to accomplish fairly the purposes of the Plan, the
Special Committee shall make such equitable adjustment under the Plan as it
determines will fairly preserve the Options to the Participant and the Company.
<PAGE>
2.7 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall be effective
immediately upon its approval by the Board. Awards may be made and shares may
be issued pursuant to the Plan on or after its effective date pursuant to, and
in accordance with, agreements for the issuance thereof entered into prior to
the effective date. The Plan shall terminate five years after it becomes
effective unless terminated prior thereto by action of the Special Committee.
No further grants shall be made under the Plan after its termination, but
termination shall not affect the rights of any Participant for a period of one
year following termination.
2.8 LIMITATION OF PLAN BENEFITS. Plan Benefits granted to any Participant
shall be limited to 2,500,000 shares of the common stock, $0.01 par value, of
the Company.
III. STOCK OPTIONS
3.1 STOCK OPTION PLAN. By action of the disinterested members of the Board
on October 19, 1995, this Plan was approved and the Plan became effective and a
stock option issued to the Chairman, all to be approved by the shareholders.
3.2 STOCK SUBJECT TO THE PLAN.
(a) The Options provided for by this Plan have been granted to the
Participant (subject to adjustment in accordance with paragraph 2.6
reserved in accordance with Section 2.5 of the Plan). As the Special
Committee may determine from time to time, the shares may consist
either in whole or in part of shares of authorized but unissued Common
Stock, or shares of authorized and issued Common Stock reacquired by
the Company. If an option is surrendered or for any other reason
ceases to be exercisable in whole or in part, the shares which were
subject to such option but as to which the option has not been
exercised shall no longer be available under this Plan.
(b) If there shall be any change in the stock subject to any option granted
hereunder, through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend (in
excess of 2%), or other change in the corporate structure of the
Company, appropriate adjustment shall be made by the Special Committee
to the aggregate number of shares subject to the Plan and the number of
shares and price per share subject to outstanding options in order to
preserve, but not to increase, the benefits of the optionee; provided,
however, that subject to any required action by the stockholders, if
the Company shall not be the surviving corporation in any merger,
consolidation, or reorganization, every option outstanding hereunder
shall terminate, unless the surviving corporation shall (subject to any
applicable provisions of the Internal Revenue Code) assume (with
appropriate changes) the outstanding options or replace them with new
options of comparable value (in accordance with Section 425(a) of the
Internal Revenue Code). Notwithstanding the preceding provisions, if
such surviving corporation does
<PAGE>
not so assume or replace the outstanding options hereunder, each
optionee shall have the right immediately prior to such merger,
consolidation, or reorganization to exercise all his outstanding
option(s), whether or not the options have matured.
3.3 ELIGIBILITY. The Participant is the only person eligible to receive
Options under the terms of this Plan.
3.4 ADMINISTRATION OF THE PLAN. The Plan shall be administered as set forth
in Section 2 of the Plan.
3.5(a) PURCHASE PRICE; TERMS; EXERCISE OF OPTIONS.
(1) Calculation of Purchase Price. The purchase price of the Common
-----------------------------
Stock under each stock option shall be not less than 100% of the
fair market value of the Common Stock on the date of grant (the
"Purchase Price"). The fair market value of the Common Stock on any
day shall be (i) if the principal market for the Common Stock is a
national securities exchange or the National Market System of the
National Association of Securities Dealers Automated Quotations, the
highest closing price of the Common Stock on such exchange or system
on the day the option is granted or if no sale of the Company's
Common Stock shall have been made on any stock exchange on that day,
on the next preceding day on which there was a sale of such stock,
or, (ii) if the principal market for the Common Stock is not one of
the markets noted in 3.5(a)(1)(i) and the Common Stock is quoted on
the National Association of Securities Dealers Automated Quotations
System, the mean between the closing bid and the closing asked
prices for the Common Stock on such day on such System, or (iii) if
the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on the
National Association of Securities Dealers Automated Quotations
System, the mean between the highest bid and lowest asked price for
the Common Stock on such day as reported by the National Quotation
Bureau, Inc.; provided that if clauses (i), (ii) and (iii) of this
Paragraph are all inapplicable, or if no trades have been made or no
quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Special Committee by any
method consistent with applicable regulations adopted by the
Commissioner of Internal Revenue relating to the stock options. The
Purchase Price shall be subject to adjustment as provided in
paragraph 3.2(b) hereof.
(2) Payment of Purchase Price. The Purchase Price shall become due
-------------------------
immediately upon exercise of the option and shall be payable in full
in cash or cash equivalents; provided, however, that the Special
Committee shall have the authority, exercisable at its discretion,
to make the option payable in one of the alternative forms specified
below:
<PAGE>
(i) full payment in shares of Company Common Stock having a
fair market value on the Exercise Date (as such term is defined
below) equal to the Purchase Price; or
(ii) a combination of shares of Company Common Stock valued at
fair market value on the Exercise Date and cash or cash
equivalents, equal in the aggregate to the Purchase Price.
For purposes of this paragraph 3.5(a)(2), the Exercise Date shall
be the date on which the Company receives written notice of the
exercise of the option, together with payment of the Purchase
Price in the form authorized by the Special Committee.
(b) Terms and Conditions of Options. The Option granted pursuant to
-------------------------------
this Option Plan shall be evidenced by a written Stock Option
Agreement (the "Agreement") executed by the Company and the person
to whom such option is granted (the "Participant"). The Option shall
mature and become exercisable only after shareholder approval and
the earlier of (1) July 20, 2000; (2) termination of employment of
the chairman by the Company for any reason other than gross
negligence or conduct constituting a felony; (3) death of
participant; or (4) permanent disability of Participant. The Option
shall expire and terminate if not exercised one year from maturity
or in any event on September 1, 2001. During the lifetime of the
Participant, the option shall be exercisable only by the Participant
and shall not be assignable or transferable other than by will or
the laws of descent and distribution. In addition, the Agreement may
contain such other terms, provisions and conditions as may be
determined by the Special Committee (and not inconsistent with this
Option Plan) including, without limitation, provisions relating to
the effect upon exercisability of the death or termination of
employment of the Participant.
(c) Method of Exercise. The option shall be exercisable by a written
------------------
notice delivered by the Participant (or other person exercising the
option) to the Special Committee. The notice shall be addressed to
the Special Committee c/o Mr. Kirk Thompson, J.B. Hunt Transport,
Inc., P.O. Box 130, Lowell, Arkansas 72745. The notice shall:
(i) state the election to exercise the option, the number of
shares in respect of which it is being exercised, the person in
whose name the stock certificate or certificates for such shares
of Common Stock is to be registered, his address and Social
Security Number (or if more than one, the names, addresses and
Social Security Numbers of such persons);
(ii) contain such representations and agreements as to the
investment intent of the person exercising the option with
respect to
<PAGE>
such shares of Common Stock as may be satisfactory to the Company's
counsel;
(iii) be signed by the person or persons entitled to exercise the
option and, if the option is being exercised by any person or
persons other than the Participant, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person
or persons to exercise the Option; and
(iv) be accompanied by payment to the Company of the full
Purchase Price of the shares with respect to which the option is
exercised. The Purchase Price shall be paid in cash or cash
equivalents, unless the Special Committee notifies the person of a
different manner of payment pursuant to Section 3.5(a)(2) of this
Plan.
(3) Conditions to be Satisfied Prior to Issuance of Common Stock. The
------------------------------------------------------------
Company shall not be required to issue or deliver any certificates for
shares of common Stock purchased upon the exercise of an option (i)
prior to the completion of any registration or other qualification of
such shares under any state or federal laws or rulings or regulations
of any government regulatory body, which the Company shall determine to
be necessary or advisable or, (ii) prior to receiving an opinion of
counsel, satisfactory to the Company, that the sale or issuance of such
shares is exempt from these registration or qualification requirements.
(4) Restrictions on Exercise. As a condition to his exercise of this
------------------------
option, the Company may require the person exercising the option to
make any representation and warranty to the Company as may be required
by any applicable law or regulation.
IV. INDEMNIFICATION OF SPECIAL COMMITTEE
4.1 In addition to such other rights of indemnification as they may have
as directors or as members of the Special Committee, the members of the Special
Committee shall be indemnified by the Company against the reasonable expenses
including attorney's fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof
provided such settlement is approved by independent legal counsel selected by
the Company or paid by them in satisfaction of a judgment in any such action,
suit or proceeding that such Special Committee member is liable for negligence
or misconduct in the performance of his duties.
<PAGE>
V. AMENDMENTS
5.1 AMENDMENTS. The Plan may be amended by the Special Committee at any
time and in any respect, except that no amendment may be made without the
approval of the stockholders of the Company if such amendment would:
(a) increase or decrease the maximum number of shares of Common Stock
available for issuance upon grant of the Options under the Plan;
(b) modify the terms under which the Option may be exercised by the
Participant under the Plan; or
(c) materially increase Plan Benefits accruing to Participants under the
Plan.
Similarly, subject to obtaining the consent of the Participant where required by
contract law, the Special Committee may alter, amend or modify any award or
grant made pursuant to this Plan in any respect not in conflict with the
provisions of the Plan, if the Special Committee deems such alteration,
amendment or modification to be in the best interests of the Participant or the
Company by reason of changes or interpretation in tax, securities or other
applicable laws.
J.B. HUNT TRANSPORT SERVICES, INC.
By Kirk Thompson, Chief Executive Officer
<PAGE>
P R O X Y
J.B. HUNT TRANSPORT SERVICES, INC.
Proxy Solicited on Behalf of Board of Directors for
Annual Meeting of Stockholders, May 9, 1996
The undersigned hereby constitute(s) and appoint(s) WAYNE GARRISON and KIRK
THOMPSON as Proxies, each with the power to appoint his substitute, and hereby
authorizes the Proxies, or either of them, to represent and vote as designated
on this proxy card all of the shares of common stock of J.B. HUNT TRANSPORT
SERVICES, INC. held of record by the undersigned on March 11, 1996 at the Annual
Meeting of Stockholders to be held on May 9, 1996, and any adjournment thereof.
Election of Directors, Nominees: COMMENT/CHANGE OF ADDRESS
J.B. Hunt, Johnelle D. Hunt, Bryan Hunt, ___________________________
Kirk Thompson, John A. Cooper, Jr.,
Fred K. Darragh, Jr., Wayne Garrison, ___________________________
Gene George, Thomas L. Hardeman,
Lloyd E. Peterson ___________________________
___________________________
(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.
<PAGE>
X Please mark your |
votes as in this |
example. |
______
This proxy when properly executed will be voted in the manner directed
herein by the undersigned. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS.
The Board of Directors recommends a vote FOR proposals 1,2 and 3
FOR WITHHELD
1. Election of
Directors
For, except vote withheld from the following nominees(s):
_________________________________________________________
FOR AGAINST ABSTAIN
2. To approve the
Chairman's Stock Option
Incentive Plan.
3. To ratify the appointment of KPMG
Peat Marwick as the principal
independent public accountants for
fiscal year 1996.
4. To consider and act upon such
other business as may properly
come before the meeting or any
adjournments thereof.
Change of
Address/Comments
on Reverse Side
Signature(s)_____________________________________________Date___________________
NOTE Please mark, sign, date and promptly return this proxy card in the enclosed
envelope. Please sign EXACTLY as your name(s) appear(s) above. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
The signer hereby revokes all proxies
heretofore given by the signer to vote
in said meeting or any adjournments
thereof.
