<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
/ / 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 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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
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<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 APRIL 17, 1997 AT 10:00 A.M.
The Annual Meeting of Stockholders of J. B. Hunt Transport Services, Inc.
(the "Company") will be held April 17, 1997 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 nine (9) directors and to fix the number of directors for the
ensuing year at nine (9).
(2) To ratify the appointment of KPMG Peat Marwick LLP 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 February 28, 1997 will be entitled to vote
at the meeting or any adjournments thereof. The stock transfer books will not
be closed.
A copy of the 1996 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 D. HUNT
Secretary
Lowell, Arkansas
March 7, 1997
- --------------------------------------------------------------------------------
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
APRIL 17, 1997
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 1996 Annual Report are
being mailed to the stockholders on or about March 7, 1997. Proxies will be
voted at the Annual Meeting of Stockholders of the Company ("Annual Meeting")
to be held April 17, 1997 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 February 28, 1997
total 36,481,274, 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 February 28, 1997.
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 "withheld" 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 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 9, 1996
The 1996 Annual Meeting was held on May 9, 1996. At that meeting 95.485
percent of eligible shares were voted. The ten nominees for the Board of
Directors were elected by a vote of 99.517 percent of the total shares voted.
The Chairman's Stock Option Incentive Plan was approved by a vote of 87.877
percent of the shares voted.
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PROPOSAL ONE
ELECTION OF DIRECTORS
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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 nine (9). 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 70; Senior Chairman of the Board of Directors of the Company. Founder of
the J. B. Hunt Company in 1961, he served as Chairman of the Board from 1982
until May 16, 1995. Mr. Hunt also serves as 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 44; 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 D. HUNT DIRECTOR 1993
Age 65; 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 38; 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 Vice Chairman of the Board in
February 1988 and Assistant Secretary of the Company in October 1988. He served
as Chief Operating Officer of the Van Division of J.B. Hunt Transport in 1995
and as Treasurer of the Company from June 9, 1996 until February 28, 1997. He
acquired an automobile dealership and relinquished his active participation in
the Company on February 28, 1997.
KIRK THOMPSON DIRECTOR 1985
Age 43; 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 58; Chairman of the Board of Cooper Communities, Inc. (a community
development company). He also serves as a director on the Boards of Wal-Mart
Stores, Inc. and Entergy Corporation.
GENE GEORGE DIRECTOR 1961
Age 74; Chairman of the Board of George's Inc. (an integrated poultry company).
He also serves as a director for First National Bank of Springdale and the
Northwest Medical Center.
THOMAS L. HARDEMAN DIRECTOR OCTOBER 1994
Age 59; 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.
LLOYD E. PETERSON DIRECTOR 1990
Age 84; 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.
3
<PAGE>
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. On December 31, 1996
Mr. Fred K. Darragh, Jr. announced his intention not to stand for reelection
to the Board of the Company. Mr. Darragh's tenure on the Board dates from
1967 and his loyal service is greatly appreciated.
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 nine (9) 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 1996 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, Bryan Hunt, Garrison, George and Thompson. 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 Johnelle Hunt (Chairman) and Messrs. Bryan Hunt and
Peterson. 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 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 Revenue Code. A report follows, prepared by the Compensation
Committee, discussing the Company's policies towards executive compensation.
4
<PAGE>
COMPENSATION OF DIRECTORS. 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 710 shares on July 1,
1996) 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) 70 Senior Chairman of the Board; Director
Wayne Garrison (1) 44 Chairman of the Board; Director
Johnelle Hunt (1) 65 Secretary; Director
Kirk Thompson (1) 43 President and Chief Executive Officer; Director
Paul R. Bergant (2) 50 Executive Vice President, Marketing
Stephen L. Palmer (3) 42 Executive Vice President, Human Resources
and Risk Management
Bob D. Ralston (4) 50 Executive Vice President, Maintenance
Jerry W. Walton (5) 50 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.
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 February 28, 1997 there were
36,481,274 shares outstanding held by 1,974 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, 1997, 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.
BENEFICIAL OWNERSHIP
--------------------
DIRECTORS AND OFFICERS SHARES PERCENT (9)
- ---------------------- ------ -------
J. B. Hunt (1) 14,322,381 39.3%
Wayne Garrison (2) 1,739,219 4.8
Kirk Thompson (3) 215,567 *
John A. Cooper, Jr. 8,062 *
Gene George (4) 1,171,076 3.2
Thomas L. Hardeman 1,562 *
Bryan Hunt 261,742 *
Johnelle Hunt 24,333 *
Lloyd E. Peterson 1,197,062 3.3
Jerry W. Walton (5) 63,064 *
All executive officers and directors 19,300,890 53.0
as a group (13 persons) (6)
*Less than 1 percent
OTHER PRINCIPAL STOCKHOLDERS
- -----------------------------
FMR Corp. (7) 4,596,000 12.6
82 Devonshire Street, Boston, MA
INVESCO PLC (8) 1,986,625 5.5
11 Devonshire Square, London, England
(1) Mr. Hunt's address is 615 J. B. Hunt Corporate Drive, Lowell, Arkansas
72745. Includes 12,652,652 shares owned by Mr. Hunt in a family limited
liability company.
(2) Includes shares owned by immediate family.
(3) Includes options to purchase 36,600 shares exercisable as of February 28,
1997.
(4) Includes 730,989 shares owned by a limited partnership of which Mr. George
is a partner and 440,087 shares owned by Mr. George in a family limited
partnership.
(5) Includes 13,320 shares held in trusts in which Mr. Walton is designated as
the trustee and options to purchase 3,600 shares exerciseable as of
February 28, 1997.
(6) Includes options to purchase 53,600 shares exercisable as of February 28,
1997.
(7) 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, 1997.
(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 14,
1997.
(9) The percentages are based upon 36,481,274 shares which equal the
outstanding shares of the Company as of February 28, 1997.
6
<PAGE>
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>
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
OTHER 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 1996 $375,000 $ 0 $53,171 (5) N/A N/A N/A $47,657
Sr. Chairman 1995 520,673 0 N/A N/A N/A N/A 43,318
1994 750,000 133,125 N/A N/A N/A N/A 36,867
Wayne Garrison 1996 375,000 0 N/A N/A 2,500,000 N/A 10,942
Chairman 1995 229,327 N/A N/A N/A N/A N/A 12,240
1994 N/A N/A N/A N/A N/A N/A N/A
Kirk Thompson 1996 400,000 0 N/A N/A 75,000 N/A 12,500
President and 1995 400,000 0 N/A N/A 100,000 N/A 12,240
CEO 1994 400,000 71,000 N/A 144,500 33,000 54,844 11,828
Bryan Hunt 1996 260,000 0 N/A N/A 0 N/A 12,500
Vice Chairman, 1995 260,000 0 N/A N/A 100,000 N/A 12,240
Asst. Secretary 1994 227,690 39,937 N/A 105,450 16,000 12,500 11,828
and Treasurer
Jerry Walton 1996 250,000 0 N/A N/A 10,000 N/A 10,687
Executive VP 1995 250,000 0 N/A N/A 70,000 N/A 12,240
Finance and 1994 250,000 44,375 N/A 68,000 18,000 N/A 12,098
CFO
</TABLE>
(1) There was no bonus earned for fiscal year 1996. All bonuses are reported in
the year in which they are earned.
(2) No restricted stock awards were made in fiscal year 1996. The value of
the restricted stock awards at the end of 1996 were $427,000, $100,660,
and $95,200 for Messrs. Thompson, Hunt and Walton respectively. Such value
is determined by the closing market price for the stock at the end of
fiscal 1996. The number of restricted stock awards held by Messrs.
Thompson, Hunt and Walton at the end of the last fiscal year were 30,500,
7,190 and 6,800 respectively. Shares vest over a four-year period in 10,
20, 30 and 40% increments. Dividends are payable on all shares.
7
<PAGE>
(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.
Also included in other compensation:
The Company advances premiums on life insurance policies on the lives of
Mr. and Mrs. J.B. Hunt. The premium advances, plus accrued interest at
market rates, were $4,630,263 as of December 31, 1996, and are a
receivable to the Company from Mr. and Mrs. Hunt. During 1996 the
Company paid premiums of $590,005 with respect to the life insurance
policies of which Mr. Hunt's share, as reported by the insurance
carriers, consisted of $36,715.
(5) Includes $46,221 for professional fees and $6,950 for personal use of the
Company plane.
EXHIBIT II
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Name and Shares Acquired Value Exercisable/ Exercisable/
Position on Exercise (#) Realized ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------
J. B. Hunt N/A N/A N/A N/A
Sr. Chairman N/A N/A
Wayne Garrison 0 0 0 E 0 E
Chairman 2,500,000 U 0 U
Kirk Thompson 0 0 36,600 E 0 E
President and CEO 201,400 U 0 U
Bryan Hunt 17,060 $95,295 0 E 0 E
Vice Chairman, 127,650 U 0 U
Asst. Secretary
and Treasurer
Jerry Walton 0 0 3,600 E 0 E
Executive VP 94,400 U 0 U
Finance and CFO
The above Exhibit reflects options only. The Company has no SARs at the present
time.
8
<PAGE>
EXHIBIT III
OPTION GRANTS IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
Number of
Securities Percent Potential Realizable
Underlying of Total Option Value ($)(1)
Name and Options Options Price Expiration ---------------------
Position Granted Granted ($/Sh) Date 5% 10%
- -------------------------------------------------------------------------------
J. B. Hunt N/A N/A N/A N/A N/A N/A
Sr. Chairman
Wayne Garrison 0 0 0 0 0 0
Chairman
Kirk Thompson 75,000 15.21% $20.8125 7/18/07 $1,108,795 $2,892,599
President and
CEO
Bryan Hunt 0 0 0 0 0 0
Vice Chairman,
Asst. Secretary
and Treasurer
Jerry Walton 10,000 2.02 20.8125 7/18/07 147,839 385,680
Executive VP
Finance and CFO
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 the Company's Common Stock or the actual future value of
these options.
REPORT OF THE COMPENSATION COMMITTEE
AND THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors was comprised during
calendar year 1996 of Messrs. Cooper, (Chairman) Darragh and Hardeman. In 1996
the Compensation Committee and the Board of Directors approved all executive
officers' base compensation. The Compensation Committee met twice in 1996.
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 1996 and performance based compensation for 1997.
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.
9
<PAGE>
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 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 1996 COMPENSATION. For fiscal 1996, 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 to the executive group in calendar 1996.
PERFORMANCE BASED MANAGEMENT INCENTIVE PLAN. On May 11, 1995, the
stockholders approved the J. B. Hunt Transport Services, Inc. Amended
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.
10
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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.
These factors were used in subjectively determining the amount of the
stock awards. The Compensation Committee approved all executive stock awards
for 1996.
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 85,000 stock options at an exercise price of $20.8125 per
share to the top four executive officers in fiscal year 1996. 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.
In accordance with the Committee's policy of aligning executive interest
with the interest of stockholders, Mr. Thompson was granted 75,000 options at
$20.8125 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.
1997 PERFORMANCE BASED COMPENSATION. For fiscal year 1997, the
Company's previously established cash bonus program for the above named
executives that is in direct correlation to 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.
1996 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, 1991 in
Company Common Stock and in each of the indices.
Comparison of Five Year Cumulative Total Return
J. B. Hunt, S&P 500, NASDAQ
[CHART]
- ------------------------------------------------------------------------------
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- ------------------------------------------------------------------------------
J. B. HUNT 100.0 117.3 118.4 78.4 87.2 73.7
- ------------------------------------------------------------------------------
S&P 500 100.0 107.7 118.2 119.8 164.8 203.2
- ------------------------------------------------------------------------------
NASDAQ 100.0 124.1 139.8 131.7 105.8 123.8
- ------------------------------------------------------------------------------
12
<PAGE>
PROPOSAL TWO
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
1997 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, there was one late filing for Wayne Garrison.
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.
13
<PAGE>
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than December 31, 1997 for inclusion in the 1998 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 D. HUNT
Secretary
14
<PAGE>
J.B. HUNT TRANSPORT SERVICES, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS, APRIL 17, 1997
PROXY
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 February
28, 1997 at the Annual Meeting of Stockholders to be held on April 17,
1997, and any adjournment thereof.
ELECTION OF DIRECTORS, NOMINEES:
J.B. Hunt, Johnelle D. Hunt, Bryan Hunt, Kirk Thompson, John A. Cooper,
Jr., Wayne Garrison, Gene George, Thomas L. Hardeman, Lloyd E. Peterson
COMMENT/CHANGE OF ADDRESS:
____________________________________
____________________________________
____________________________________
(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 SAMPLE
- -----
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
(See Reverse) ____ ____
For, except vote withheld from the following nominee(s):
___________________________________________
FOR AGAINST ABSTAIN
2. To ratify the appointment of KPMG
Peat Marwick as the principal
independent public accountants for
fiscal year 1997. ____ ____ ____
FOR AGAINST ABSTAIN
3. 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 at
said meeting or any adjournments thereof.
