<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 / /
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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
J. B. HUNT TRANSPORT SERVICES, INC.
615 J. B. HUNT CORPORATE DRIVE
LOWELL, ARKANSAS 72745
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1999 AT 10:00 A.M.
The Annual Meeting of Stockholders of J. B. Hunt Transport Services,
Inc. (the "Company") will be held April 15, 1999 at 10:00 a.m. (CDT) at the
Company's headquarters, located at 615 J. B. Hunt Corporate Drive, Lowell,
Arkansas for the following purposes:
(1) To elect four Class I Directors for a term of three years each.
(2) To ratify the appointment of KPMG 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 26, 1999 will be entitled to
vote at the meeting or any adjournments thereof. The stock transfer books
will not be closed.
A copy of the 1998 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 5, 1999
- --------------------------------------------------------------------------------
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
This Proxy Statement contains information related to the Annual Meeting
of Stockholders of J.B. Hunt Transport Services, Inc. to be held Thursday,
April 15, 1999, beginning at 10:00 a.m. local time, at the Company's
corporate offices, 615 J.B. Hunt Corporate Drive, Lowell, Arkansas and at any
postponements or adjournments thereof.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's Annual Meeting, stockholders will act upon matters
outlined in the accompanying notice of meeting, including the election of
directors and ratification of the Company's independent auditors. In
addition, the Company's management will report on the performance of the
Company during fiscal 1998 and respond to questions from the stockholders.
WHO IS ENTITLED TO VOTE?
Only stockholders of record at the close of business on the record date,
February 26, 1999, are entitled to receive notice of the Annual Meeting and
to vote the shares of common stock that they held on that date at the meeting
or any postponement or adjournment of the meeting. Each outstanding share
entitles its holder to cast one vote on each matter to be voted on.
WHO CAN ATTEND THE MEETING?
All stockholders as of the record date, or their duly appointed proxies,
may attend the meeting and each may be accompanied by one guest. Seating,
however, is limited. Admission to the meeting will be on a first-come,
first-served basis. Registration will begin at 9:30 a.m. and seating will be
available at approximately 9:30 a.m. Cameras and recording devices will not
be permitted at the meeting.
Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a
brokerage statement reflecting your stock ownership as of the record date and
check in at the registration desk at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting
2
<PAGE>
to conduct its business. As of the record date, 35,618,707 shares of common
stock of the Company were outstanding. Proxies received but marked as
abstentions and broker non-votes will be included in the calculation of the
number of shares considered to be present at the meeting.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return
it to the Company, it will be voted as you direct. If you attend the meeting,
you may deliver your completed proxy card in person.
CAN I VOTE BY TELEPHONE?
If you are a registered stockholder (that is, if you hold stock in your
own name), you may vote by telephone by following the instructions included
with your proxy card.
If your shares are held in "street name," you will need to contact your
broker or other nominee to determine whether you will be able to vote by
telephone.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendation is set
forth together with the description of each item in this Proxy Statement. In
summary, the Board recommends a vote:
- FOR election of the nominated slate of directors (see pages 4-6)
- FOR ratification of the appointment of KPMG LLP as the Company's
independent auditors (see pages 15-16)
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if
no recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
- - ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the Meeting is required for the election of directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of
one or more directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of
determining whether there is a quorum.
- - OTHER ITEMS. For each other item, the affirmative vote of the holders of a
majority of the shares represented in person or by proxy and entitled to
vote on the item will be required for approval. A properly executed proxy
marked "ABSTAIN" with respect to any such matter will not be voted,
although it will be counted for purposes of determining whether there is a
quorum. Accordingly, an abstention will have the effect of a negative vote.
If you hold shares in "street name" through a broker or other nominee,
your broker or nominee may not be permitted to exercise voting discretion
with respect to some of the matters to be acted upon. Thus, if you do not
give your broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such "broker non-votes"
will, however, be counted in determining whether there is a quorum.
3
<PAGE>
CAN I CHANGE MY VOTE AFTER I RETURN THE PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote
at any time before the proxy is exercised by filing with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a
later date. The powers of the proxy holders will be suspended if you attend
the meeting in person and so request, although attendance at the meeting will
not by itself revoke a previously granted proxy.
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 APRIL 16, 1998
The 1998 Annual Meeting was held on April 16, 1998. At that meeting
91.872 percent of eligible shares were voted. The nine nominees for the Board
of Directors were elected by a vote of 95.54 percent of the total shares
voted. The amended Management Incentive Plan was approved by a vote of 81.67
percent of the total shares voted. Ratification of the appointment of KPMG
LLP as the Company's independent auditors for the next fiscal year was
approved by a vote of 99.956 percent of the total shares voted.
STOCK OWNERSHIP
HOW MUCH STOCK DO THE COMPANY'S DIRECTORS AND OFFICERS OWN?
The authorized Common Stock of the Company consists of 100,000,000
shares, $.01 par value. As of the close of business on February 26, 1999
there were 35,618,707 shares outstanding held by 1,693 stockholders of record.
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock by each director of the Company, and
by each person known to the Company to be, at February 26, 1999, 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 (8)
---------------------- ------------------------------
<S> <C> <C>
J. B. Hunt (1) 14,308,536 40.2%
Wayne Garrison (2) 1,405,446 4.0
John A. Cooper, Jr. 9,486 *
Gene George (3) 624,258 1.8
Thomas L. Hardeman 2,986 *
Bryan Hunt (4) 12,641 *
Johnelle Hunt 26,789 *
Robert E. Logan (5) 12,000 *
Lloyd E. Peterson 1,097,490 3.1
- ----------------------------------------------------------------------------
4
<PAGE>
- ----------------------------------------------------------------------------
Kirk Thompson 166,448 *
Jerry W. Walton (6) 78,966 *
Dr. John A. White 2,128 *
All executive officers and directors 18,107,586 50.8%
as a group (19 persons) (7)
- ----------------------------------------------------------------------------
</TABLE>
*Represents less than 1 percent of the Company's outstanding common stock
- ----------------------------------------------------------------------------
OTHER PRINCIPAL STOCKHOLDERS
- ----------------------------------------------------------------------------
None reported as of February 26, 1999.
(1) Mr. Hunt's address is 615 J.B. Hunt Corporate Drive, Lowell, Arkansas
72745. Includes 13,076,408 shares owned by Mr. Hunt in a family limited
liability company.
(2) Includes shares owned by immediate family.
(3) Includes an indirect 25% beneficial ownership interest through a family
limited partnership in 730,989 shares which equals 182,747 shares and the
ownership of 441,511 shares in another family limited partnership. Mr.
George disclaims the beneficial ownership of the 182,747 shares described
above and listing such shares shall not be construed as an admission that
Mr. George is the owner of such shares for purposes of Sections 13(d) or
13(g) of the Securities Exchange Act of 1934.
(4) Includes option to purchase 4,950 shares, exerciseable as of February 26,
1999.
(5) Includes options to purchase 2,000 shares, exerciseable as of February 26,
1999.
(6) Includes 27,614 shares held in trusts in which Mr. Walton is designated as
the trustee and options to purchase 2,800 shares, exerciseable as of
February 26, 1999.
(7) Includes options to purchase 85,650 shares exerciseable as of February 26,
1999.
(8) The percentages are based upon 35,618,707 shares which equal the
outstanding shares of the Company as of February 26, 1999.
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 Exchange Act of 1934 reports of ownership and changes of
ownership with the Securities Exchange Commission (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, to the best of the Company's knowledge there
were no late filings for fiscal year 1998.
- -------------------------------------------------------------------------------
PROPOSAL ONE
ELECTION OF DIRECTORS
- -------------------------------------------------------------------------------
The Board of Directors is currently divided into three classes, having
three-year terms that expire in successive years. The term of office of
directors in Class I expires at the 1999 Annual Meeting. The Board of
Directors proposes that the nominees described below be re-elected to Class I
for a new term of three years and until their successors are duly elected and
qualified. With the exception of Dr. John A. White, all are currently serving
as Class I directors.
Each of the nominees has consented to serve a three-year term. If any of
them should become unavailable to serve as a director, the Board may
designate a substitute nominee. In that case, the persons named as proxies
will vote for the substitute nominee designated by the Board.
5
<PAGE>
It is intended that the shares represented by the accompanying proxy
will be voted at the 1999 Annual Meeting for the election of all nominees.
Each nominee has indicated his/her willingness to serve as a member of the
Board, if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROFILES OF DIRECTORS AND NOMINEES
NOMINEES FOR DIRECTOR:
CLASS I - TERM EXPIRES APRIL 1999
JOHNELLE D. HUNT DIRECTOR SINCE 1993
Mrs. Hunt, age 67, is Secretary of the Company. Serving as Credit Manager
from 1962 to 1987, she was elected Secretary-Treasurer in 1972 and served in
that capacity until October 1988 at which time she was elected Secretary.
She also serves on the Board of Directors for the UAMS Foundation Advisory
Board and the Harvey and Bernice Jones Eye Institute and is the founding
chairman of the Alexis de Tocqueville Society of United Way for Washington
County. On February 9, 1999, Mrs. Hunt received an appointment from Governor
Huckabee to serve as a member of the Arkansas Economic Development Council.
LLOYD E. PETERSON DIRECTOR SINCE 1990
Mr. Peterson, age 86, is 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 is Director Emeritus of
Grand Federal Bank.
KIRK THOMPSON DIRECTOR SINCE 1985
Mr. Thompson, age 45, is 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 LLP. 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. WHITE
Dr. White, age 59, is a new nominee to the Board of Directors. Dr. White has
served as Chancellor of the University of Arkansas since July 1, 1997. Prior
to joining the University, he served as Dean of Engineering at the Georgia
Institute of Technology in Atlanta for six years. A graduate of the
University of Arkansas (BSIE), Virginia Tech (MSIE) and The Ohio State
University (PhD), he also holds honorary doctorates from the Katholieke
Universitiet of Leuven in Belgium and from George Washington University. Dr.
White is a member of the National Academy of Engineering, past president of
the National Consortium for Graduate Degrees for Minorities in Engineering
and Science, Inc., past chairman of the American Association of Engineering
Societies and past president of the Institute of Industrial Engineers. He
also serves on the Board of Directors for Eastman Chemical Company, Motorola,
Inc., Russell Corporation, Logility, Inc. and the National Science Foundation
to which he received an appointment by President Clinton.
6
<PAGE>
DIRECTORS WHOSE TERM OF OFFICE CONTINUE
CLASS II - TERM EXPIRES APRIL 2000
GENE GEORGE DIRECTOR SINCE 1961
Mr. George, age 76, is Chairman of the Board of George's Inc. (an
integrated poultry company). He also serves on the Board of Directors for
the First National Bank of Springdale and Northwest Medical Center.
THOMAS L. HARDEMAN DIRECTOR SINCE 1994
Mr. Hardeman, age 61, is President of BTTB Investments, a private investment
company. He also serves on the Board of Directors for Trimac, Ltd. (a
Canadian corporation). 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.
J. B. HUNT DIRECTOR SINCE 1961
Mr. Hunt, age 72, is the 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 on the
Board of Directors of the American Trucking Association Foundation.
CLASS III - TERM EXPIRES APRIL 2001
JOHN A. COOPER, JR. DIRECTOR SINCE 1990
Mr. Cooper, age 60, is Chairman of the Board, Chief Executive Officer and
President of Cooper Communities, Inc. (a community development company). He
also serves on the Board of Directors for Wal*Mart Stores, Inc. and Entergy
Corporation.
BRYAN HUNT DIRECTOR SINCE 1991
Mr. Hunt, age 40, is the Vice Chairman of the Company. He joined the Company
through its Management Training Program in 1983, 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
relinquished his active participation in the Company on February 28, 1997 to
pursue outside interests and is the President of Best Motor Company.
WAYNE GARRISON DIRECTOR SINCE 1981
Mr. Garrison, age 46, assumed the responsibilities of Chairman of the Board
May 16, 1995. He joined the Company in 1976 as Plant Manager. He also 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.
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.
7
<PAGE>
Each of the foregoing nominees is currently serving as a director of the
Company and, with the exception of John A. White, 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.
8
<PAGE>
WHAT ARE THE DUTIES OF THE BOARD?
The Board of Directors has the responsibility to serve as the trustee
for the stockholders. It also has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. The Board,
however, is not involved in day-to-day operating details. Members of the
Board are kept informed of the Company's business through discussion with the
Chief Executive Officer and other officers, by reviewing analyses and reports
sent to them each month and by participating in Board and Committee meetings.
HOW ARE DIRECTORS COMPENSATED?
During the Company's fiscal year ended December 31, 1998, each director
who is not a salaried officer or employee of the Company was paid $3,000 for
each board meeting attended, $1,000 for each committee meeting attended and
$2,000 for each committee meeting chaired and received an annual retainer of
$15,000 paid in Company stock (or 428 shares on July 15, 1998).
HOW OFTEN DID THE BOARD MEET DURING FISCAL 1998?
The Board of Directors met four times during the 1998 fiscal year.
During this period all members of the Board participated in at least 75% of
all meetings including the Annual Meeting. 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.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Board of Directors has established Executive, Compensation, Audit
and Nominating Committees to direct attention to specific subjects and to act
on its behalf in discharging its responsibilities.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
EXECUTIVE COMPENSATION AUDIT NOMINATING
NAME COMMITTEE COMMITTEE COMMITTEE COMMITTEE
<S> <C> <C> <C> <C>
J. B. Hunt *
Wayne Garrison *
John A. Cooper, Jr. ** *
Gene George * *
Tom Hardeman * **
Bryan Hunt * *
Johnelle Hunt **
Lloyd Peterson *
Kirk Thompson *
- --------------------------------------------------------------------------------------------
</TABLE>
* Member
** Chairperson
EXECUTIVE COMMITTEE. The Executive 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. The Executive Committee held no meetings
in fiscal 1998.
9
<PAGE>
COMPENSATION COMMITTEE. 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.
In fiscal 1998, the Compensation Committee met twice.
AUDIT COMMITTEE. The Audit Committee met once during fiscal 1998. It'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.
NOMINATING COMMITTEE. The Nominating Committee is responsible for
recommending candidates for election to the Board of Directors. The
Nominating Committee is composed solely of independent directors who have no
relationship with the Company other than their directorship. The Nominating
Committee is responsible for soliciting recommendations for candidates for
the Board of Directors, developing and reviewing background information for
candidates, making recommendations to the Board regarding such candidates and
reviewing and making recommendations to the Board with respect to candidates
for directors proposed by stockholders. Any stockholder wishing to propose a
nominee should submit a recommendation in writing to the Company's Secretary,
indicating the nominee's qualifications and other relevant biographical
information and providing confirmation of the nominee's consent to serve as a
director. The Nominating Committee met once during fiscal 1998.
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION AND OTHER INFORMATION
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPHS INCLUDED ELSEWHERE IN THIS PROXY STATEMENT DO NOT CONSTITUTE SOLICITING
MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY
OTHER COMPANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES THIS
REPORT OR THE PERFORMANCE GRAPHS BY REFERENCE THEREIN.
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for fiscal 1998.
The following table sets forth information concerning total compensation
earned or 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 executive officers of the Company for such period in all
capacities in which they served.
10
<PAGE>
EXHIBIT I
EXECUTIVE COMPENSATION SUMMARY TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL BONUS ($) SATION AWARD(S) SARS (#) PAYOUTS SATION
POSITION YEAR SALARY ($) (1) ($) (2) ($) (3) (4) ($) ($) (5)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.B. Hunt 1998 375,000 0 50,676 N/A N/A N/A 14,375
Senior Chairman 1997 375,000 0 49,074 N/A N/A N/A 50,653
1996 375,000 0 53,171 N/A N/A N/A 47,657
Wayne Garrison 1998 375,000 0 N/A N/A N/A N/A 2,596
Chairman 1997 375,000 0 N/A N/A N/A N/A 1,778
1996 375,000 0 N/A N/A 2,500,000 N/A 10,942
Kirk Thompson 1998 409,615 60,000 N/A N/A 0 N/A 4,800
President and 1997 400,000 10,000 N/A N/A 76,000 N/A 4,615
CEO 1996 400,000 0 N/A N/A 75,000 N/A 12,500
Robert Logan 1998 262,885 36,600 N/A N/A 10,000 N/A 0
Chief Information 1997 244,000 6,500 N/A N/A 30,000 N/A 0
Officer 1996 N/A N/A N/A N/A 50,000 N/A 0
Jerry Walton 1998 254,808 37,500 N/A N/A 20,000 N/A 1,875
Executive VP 1997 250,000 6,250 N/A N/A 55,000 N/A 1,779
Finance and 1996 250,000 0 N/A N/A 10,000 N/A 10,687
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) In accordance with SEC rules, reporting is not required unless the
aggregate of such compensation exceeds $50,000 or 10% of the total annual
salary and bonus. The amounts reported for Mr. Hunt represent $45,114 for
professional fees and $5,562 for personal use of the Company plane in
fiscal 1998, $47,880 for professional fees and $1,194 for personal use of
the Company plane for fiscal 1997 and $46,221 for professional fees and
$6,950 for personal use of the Company plane for fiscal 1996.
(3) There were no restricted stock awards granted in fiscal years 1996, 1997 or
1998.
(4) There were no stock appreciation rights ("SARs") granted to the above named
executives by the Company.
(5) 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, were $6,067,567 as of December
31, 1998, and are a receivable to the Company from a trust which is the
owner and beneficiary of the policy. The Company has a guarantee from Mr.
and Mrs. Hunt for the amount of premiums paid by the Company together with
accrued interest at the rate of 5% per annum. During 1998 the Company paid
premiums of $600,000 with respect to the life insurance policies of which
Mr. Hunt's share, as reported by the insurance carriers, consisted of
$12,502.
11
<PAGE>
EXHIBIT II
AGGREGATED OPTION EXERCISES DURING FISCAL 1998
AND
OPTION VALUES ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
(1)
NAME AND SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
POSITION ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. B. Hunt 0 0 0 0
0 0
Wayne Garrison 0 0 0 E 0 E
2,500,000 U 3,437,500 U
Kirk Thompson 35,800 2,755,549 0 E 0 E
248,200 U 1,362,775 U
Robert Logan 0 0 2,000 E 16,875 E
88,000 U 525,000 U
Jerry Walton 10,400 78,139 2,800 E 12,987 E
159,800 U 949,102 U
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The above Exhibit reflects options only. The Company has no SARs at the present
time.
(1) In accordance with SEC rules, values are calculated by subtracting the
exercise price from the fair market value of the underlying common stock.
For purposes of this table, fair market value is deemed to be $23.00, which
is the closing market price reported on NASDAQ on December 31, 1998.
EXHIBIT III
OPTION GRANTS DURING FISCAL 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT
UNDERLYING OF TOTAL OPTION POTENTIAL REALIZABLE VALUE ($)(1)
NAME AND OPTIONS OPTIONS PRICE EXPIRATION
POSITION GRANTED GRANTED ($/SH) DATE 5% 10%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. B. Hunt 0 0 0 0 0 0
Wayne Garrison 0 0 0 0 0 0
Kirk Thompson 0 0 0 0 0 0
Robert Logan 10,000 1.66 12.50 10/08/09 88,792 231,640
Jerry Walton 20,000 3.32 19.563 12/04/09 277,927 725,050
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The above Exhibit reflects options only. The Company has no SARs at the present
time.
12
<PAGE>
(1) The hypothetical value of the options as of their date of grant has been
calculated above using the Black-Scholes option pricing model, as permitted by
the rules of the SEC, based upon a set of assumptions. It should be noted that
this model is only one method of valuing options and the Company's use of the
model should not be interpreted as an endorsement of its accuracy. The actual
value of the options may be significantly different, and the value actually
realized, if any, will depend upon the excess of the market value of the common
stock over the option exercise price at the time of exercise.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors was comprised during
fiscal year 1998 of Messrs. Cooper, (Chairman) George and Hardeman. The
Compensation Committee and the Board of Directors approved compensation for the
Company's top five executive officers. In fiscal 1998, the Compensation
Committee met twice.
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 1998 and performance-based compensation for 1999.
COMPENSATION POLICY. The goal of the Company's executive compensation
policy is to ensure that an appropriate relationship exists between executive
pay and the creation of stockholder value, while at the same time motivating and
retaining key employees. To achieve this goal, the Company's executive
compensation policies integrate annual base compensation with bonuses based upon
corporate performance and individual initiatives and performance. Measurement of
corporate performance is primarily based on Company goals and industry
performance levels. Accordingly, in years in which performance goals and
industry levels are achieved or exceeded, executive compensation tends to be
higher than in years in which performance is below expectations. Annual cash
compensation, together with the payment of equity-based incentive, is designed
to attract and retain qualified executives and ensure that such executives have
a continuing stake in the long-term success of the Company. All executive
officers and management, in general, are eligible for and do participate in
incentive compensation plans.
PERFORMANCE MEASURE. In evaluating annual executive compensation the
Committee examines earnings per share (EPS), return on assets and equity,
revenue growth, increased value to stockholders and operating ratio. 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 and logistics companies.
To motivate our employees to "think like" stockholders, the Company has
implemented the following guidelines of stock ownership over a five-year period:
<TABLE>
<CAPTION>
Position Ownership Multiple of Base Salary
-------- ---------------------------------
<S> <C>
Chief Executive Officer 5 times
Executive Vice Presidents 3 times
Group Presidents, Senior Vice Presidents
and Vice Presidents of Operations 2.5 times
Vice Presidents, Terminal Managers,
Regional Operations Managers 2 times
</TABLE>
13
<PAGE>
FISCAL 1998 COMPENSATION. For fiscal 1998, 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 comparisons include some companies in
the peer group selected for the performance graph. The companies used in the
compensation peer group were leading transportation and logistics companies.
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. 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 operating ratio. 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 operating ratio improves. No cash
bonuses were paid to the executive group in fiscal 1996 but were paid in fiscal
1997 and 1998.
PERFORMANCE-BASED MANAGEMENT INCENTIVE PLAN. On May 11, 1995 and
subsequently on April 16, 1998, 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.
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 operating ratio of the Company
as a whole.
These factors were used in subjectively determining the amount of the stock
awards. The Compensation Committee determined and approved 1998 stock awards for
the top five executive officers of the company.
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., 6,500,000
shares of Company stock. Since the Plan incorporates the 1984 Stock Option Plan,
all options issued under the 1984 Plan are deducted from the 6,500,000 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
14
<PAGE>
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, determined and approved by the
Compensation Committee, granted 10,000 stock options at an exercise price of
$12.50 per share and 20,000 stock options at an exercise price of $19.563 per
share to the top five executive officers in fiscal year 1998. 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 and 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.
Messrs. Hunt and Garrison do not participate in the bonus plan and
therefore, received no bonus in 1998. The cash bonus for Mr. Thompson is
determined by the previously mentioned formula relating bonuses to quarterly
operating ratios. A cash bonus was paid to Mr. Thompson in 1998 in attainment of
the operating ratio criteria.
In accordance with the Committee's policy of aligning executive interest
with the interest of stockholders, Mr. Thompson was granted 38,000 options which
will vest over a ten year period. However, due to the potential of a 16(b)
violation, Mr. Thompson will be unable to receive this grant until March 1999.
There were no stock options granted to Messrs. Hunt or Garrison in 1998.
Messrs. Hunt, Garrison and Thompson's cash compensation is comparable to
the NASDAQ peer group and other transportation company peer groups.
Additionally, Messrs. Hunt, Garrison and Thompson participate in the
Company's retirement plan.
1999 PERFORMANCE-BASED COMPENSATION. For fiscal year 1999, the Company's
previously established cash bonus program for the above named executives that is
in direct correlation to the operating ratio remains in place at the date of
this filing. As the operating ratio improves, the cash bonuses increase.
HOW IS THE COMPANY ADDRESSING INTERNAL REVENUE CODE LIMITS ON DEDUCTIBILITY OF
COMPENSATION?
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 paid for any
fiscal year to the Company's Chief Executive Officer and four other most highly
compensated executive officers as of the end of any fiscal year. However, the
statute exempts qualifying performance-based compensation from the deduction
limit if certain requirements are met. The Compensation Committee has structured
performance-based compensation, including stock option grants and annual
bonuses, to executive officers who may be subject to section 162(m) in a manner
that satisfies those requirements. To meet the stockholder approval requirements
of Section 162(m), the Company submitted and obtained approval of the Amended
Management Incentive Plan by its stockholders at the 1995 Annual Meeting.
15
<PAGE>
The Board and the Compensation Committee reserve the authority to award
non-deductible compensation in other circumstances as they deem appropriate.
Further, because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued thereunder, no
assurance can be given, notwithstanding the Company's efforts, that compensation
intended by the Company to satisfy the requirements for deductibility under
Section 162(m) does in fact do so.
16
<PAGE>
At the Compensation Committee meeting held January 21, 1998 the Committee
reviewed and approved an unfunded Deferred Compensation Plan for the Company.
Effective March 1, 1998, eligible participants will include all board members
and the top two percent of the Company's management group. Each participant
may elect to defer up to 100% of any salary, bonus or board compensation
earned during the year and elect to receive the income at a designated date
in the future. Upon review and approval by the Committee, the Deferred
Compensation Plan was presented to the Board of Directors at its regularly
scheduled meeting on January 21, 1998 to which it received unanimous approval.
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.
1998 COMPENSATION COMMITTEE
John A. Cooper, Jr., Chairman
Gene George
Thomas L. Hardeman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Cooper, George and Hardeman comprise the Compensation Committee.
None of the members of the Compensation Committee were an officer or an
employee of the Company during 1998 and no member of the Committee is a
former officer of the Company or had any related party transactions with the
Company in fiscal 1998.
17
<PAGE>
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, 1993 in
Company Common Stock and in each of the indices.
- --------------------------------------------------------------------------------
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
J. B. HUNT TRANSPORT, S&P 500, NASDAQ
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. B. HUNT 100.0 66.9 74.3 62.9 85.3 104.6
- ------------------------------------------------------------------------------------------------------
S&P 500 100.0 111.3 153.1 188.8 252.0 295.7
- ------------------------------------------------------------------------------------------------------
NASDAQ 100.0 106.1 85.2 99.7 128.9 114.0
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has selected KPMG LLP as the principal
independent public accountants for fiscal year 1999 and recommends that the
stockholders vote for ratification of such appointment. KPMG LLP 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
18
<PAGE>
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 KPMG LLP 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.
EXPENSES
The proxies being solicited hereby are bring solicited by the Company.
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 2000 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than November 5, 1999 for inclusion in the 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
19
<PAGE>
J.B. HUNT TRANSPORT SERVICES, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS, APRIL 15, 1999
P
R
O
X
Y
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 26,
1999 at the Annual Meeting of Stockholders to be held on April 15, 1999, and
any adjournment thereof.
ELECTION OF DIRECTORS, NOMINEES: COMMENT/CHANGE OF ADDRESS:
(01) Johnelle D. Hunt, (02) Lloyd E. Peterson,
(03) Kirk Thompson, (04) John A. White -----------------------------
-----------------------------
-----------------------------
-----------------------------
(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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
/X/ PLEASE MARK YOUR 2600
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 AND 2
- --------------------------------------------------------------------------------
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 LLP as the principal
independent public accountants
for fiscal year 1999.
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.
- FOLD AND DETACH HERE -
J.B. HUNT TRANSPORT SERVICES, INC.
Dear Stockholder:
J.B. Hunt Transport Services, Inc. encourages U.S. and Canadian residents to
take advantage of a convenient way by which you can vote your shares by
telephone. If you vote by telephone, you do not need to return this proxy
card.
To vote your shares by telephone you must use the voter control number in the
box above, just below the perforation.
On a touch-tone telephone call toll-free 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, 7 days a week. The telephone response system will lead you
through the simple process of voting your proxy. Your voter control number
above must be used to access the system.
YOUR TELEPHONE VOTE PROVIDES THE SAME AUTHORIZATION TO VOTE YOUR SHARES AS IF
YOU MARKED, SIGNED, DATED AND RETURNED YOUR PROXY CARD.
Your vote is important. Thank you for voting.
