KLLM TRANSPORT SERVICES, INC.
135 Riverview Drive
Richland, Mississippi 39218
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 21, 1998
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of
Shareholders of KLLM Transport Services, Inc., will be held
at the Company's headquarters, 135 Riverview Drive,
Richland, Mississippi, on Tuesday, April 21,
1998, at 10:00 a.m., Richland time, for the purpose of
considering and acting upon the following matters:
1. Election of seven directors to serve until the
next annual meeting of shareholders and until
their successors are elected and qualified.
2. Ratification of the appointment of Ernst & Young
LLP as independent auditors for the fiscal year
ending January 1, 1999.
3. Transaction of such other business as may properly
come before the meeting or any adjournments
thereof.
The directors have fixed the close of business on March
10, 1998, as the record date for the determination of
shareholders entitled to receive notice of and vote at the
Annual Meeting.
The directors sincerely desire your presence at the
meeting. However, so that we may be sure your vote will be
included, please sign and return the enclosed proxy
promptly. A self-addressed, postage-paid return envelope is
enclosed for your convenience.
By order of the Board of Directors.
s/James Leon Young
JAMES LEON YOUNG, Secretary
Date: March 20, 1998
SHAREHOLDERS ARE URGED TO VOTE BY DATING, SIGNING AND
RETURNING THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE TO
WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED
STATES.
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / 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
KLLM 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:
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(2) Aggregate number of securities to which transaction
applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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KLLM TRANSPORT SERVICES, INC.
135 Riverview Drive
Richland, Mississippi 39218
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 21, 1998
The following information is furnished in connection with the
Annual Meeting of Shareholders of KLLM Transport Services, Inc. (the
"Company") to be held on Tuesday, April 21, 1998, at 10:00 a.m., Richland
time, at the Company's headquarters, 135 Riverview Drive, Richland,
Mississippi. A copy of the Company's annual report to shareholders for the
fiscal year ended January 2, 1998, accompanies this proxy statement. The
annual report is not to be considered part of the proxy solicitation
materials. Additional copies of the annual report, notice, proxy statement,
and form of proxy may be obtained from the Company's Secretary, P. O. Box
6098, Jackson, Mississippi 39288.
The enclosed proxy is solicited by the Board of Directors of the
Company. The proxy may be revoked by a shareholder at any time before it is
voted by filing with the Company's Secretary a written revocation or a duly
executed proxy bearing a later date. The proxy may also be revoked by a
shareholder attending the meeting, withdrawing the proxy, and voting in
person.
All expenses incurred in connection with the solicitation of
proxies will be paid by the Company. In addition to the solicitation of
proxies by mail, directors, officers, and regular employees of the Company
may solicit proxies in person or by telephone. The Company will, upon
request, reimburse banks, brokerage houses and other institutions, nominees,
and fiduciaries for their expenses in forwarding proxy material to their
principals.
The approximate date of mailing this proxy statement and the
enclosed form of proxy is March 20, 1998. Shareholders of record at the close
of business on March 10, 1998, are eligible to vote at the Annual Meeting.
As of the record date, 4,373,115 shares of the Company's common stock were
outstanding. Each is entitled to one vote on each issue to be considered at
the Annual Meeting.
Other than the election of directors, which requires a plurality
of the votes cast, each matter to be submitted to the shareholders requires
the affirmative vote of a majority of the votes cast at the meeting. For
purposes of determining the number of votes cast with respect to a particular
matter, only those cast "For" or "Against" are included. Abstentions and
broker non-votes are counted only for purposes of determining whether a quorum
is present at the meeting.
ELECTION OF DIRECTORS
The Company's bylaws provide that the number of directors shall be
fixed by resolution of the Board of Directors and that the number may not be
less than three nor more than twelve. Pursuant to the bylaws, the Board of
Directors has fixed the number of directors at seven. Unless otherwise
specified, proxies will be voted FOR the election of the seven nominees named
below to serve until the next annual meeting of shareholders and until their
successors are elected and qualified. If, at the time of the meeting, any of
the nominees named below is not available to serve as director (which is not
anticipated), the proxies will be voted for the election of such other person
or persons as the Board of Directors may designate. The directors recommend
a vote FOR the seven nominees listed below. Nominees Benjamin C. Lee, Jr.,
James Leon Young, Walter P. Neely, Steven K. Bevilaqua, C. Tom Clowe, Jr.,
and Leland R. Speed are now directors of the Company.
Nominees for Director
- ---------------------
The table below sets forth certain information regarding the nominees for
election to the Board of Directors:
<TABLE>
<S> <C> <C>
Name and Position Age Principal Occupation,
Business Experience
for the Past Five Years and
Tenure with the Company
Benjamin C. Lee, Jr. 70 Chairman of the Board of Directors
Director and Chairman since February 14, 1996; Acting
Board of Directors Chief Executive Officer from November,
1994 to April, 1995; Vice Chairman
of the Board of Directors from 1986 to
February 14, 1996; Executive Vice
President from 1982 to 1986;
Secretary from January, 1964 to May,
1968 and from July, 1969 to January,
1982; Treasurer from July, 1969
to January, 1982.
James Leon Young 67 Attorney, Young, Williams, Henderson
Secretary & Director & Fuselier, P.A., Jackson, Mississippi;
Director since 1965; Secretary since 1982.
Walter P. Neely 52 Professor, Else School of Management,
Director Millsaps College, Jackson, Mississippi;
Private consultant; Trustee, Performance
Funds Trust, New York, New York, since
June, 1992; Director since 1986.
Steven K. Bevilaqua 46 President, Chief Executive Officer and
President, Chief Director since April, 1995; President -
Executive Officer Eastern Region of J. B. Hunt Co. from
and Director November, 1994 to March, 1995; Executive
Vice President of Operations of J. B.
Hunt Co. from February, 1992, to
November, 1994; Senior Vice President
of Sales and Marketing of J. B. Hunt Co.
from September, 1990 to February, 1992.
C. Tom Clowe, Jr. 64 President and Chief Operating Officer,
Director Missouri Gas Energy, Division of Southern
Union Corporation, from September, 1995
to present; Chairman, President and Chief
Executive Officer of Central Freight
Lines, Inc., Waco, Texas, from June, 1993
to April, 1995; Director since June, 1995.
Leland R. Speed 65 President and Director of Congress Street
Director Properties from February, 1984 to
November, 1994; Chairman and Director of
Delta Industries, Inc. from April,
1979 to present; Trustee of EastGroup
Properties, Inc. from 1978 to
present; Chairman of EastGroup
Properties, Inc. from April, 1993
to present; Chief Executive Officer of
EastGroup Properties, Inc. from April,
1993 to September, 1997; Trustee of
Eastover Corporation from 1975 to
December, 1994; President of Eastover
Corporation from 1978 to December, 1994;
Chairman and Director of Eastover
Realty Corp. from 1987 to December, 1994;
President and Director of EB, Inc. from
March, 1993 to April, 1996; Director of
Farm Fish, Inc. from October, 1982 to
present; Director of ChemFirst, Inc.
from May, 1968 to present; President and
Director of LNH REIT, Inc. from November,
1991 to May, 1996; Trustee of First
Continental Investors REIT from June,
1987, to May, 1994; Director of
Mississippi Valley Gas Co. from December,
1984 to present; President, Chief
Executive Officer and Director of
Rockwood National Corp. from April,
1983 to June, 1994; Chairman of Parkway
Properties, Inc. from April, 1993 to
present; Chief Executive Officer of
Parkway Properties, Inc. from April,
1993 to September, 1997; Director since
May, 1995.
W. J. Liles, III 47 Employee of the Company since 1974;
Vice President Vice President-Sales and Marketing since
Sales and Marketing April, 1996; President-Rail Services from
February, 1994 to April, 1996; Vice
President-Sales and Marketing-West from
1990 to 1994; Vice President-Marketing
from October, 1986 to 1990;
Marketing Director from 1983 to October,
1986.
</TABLE>
Stock Ownership
- ----------------
The following table indicates the beneficial ownership as of March
10, 1998, unless otherwise indicated below, of the Company's common stock by
each nominee and director, the CEO and the four most highly compensated
executive officers other than the CEO, by each person known by the Company to
be the beneficial owner of more than 5% of the Company's
outstanding shares, and by all directors and executive officers of the
Company as a group.
<TABLE>
<S> <C> <C>
Name of Beneficial Amount and Nature of Beneficial Percent of Class
Owner Ownership
William J. Liles, Jr. 626,163 (1)(2) 14.3%
Marital Trust
Benjamin C. Lee, Jr. 603,000 (2)(3) 13.8%
James Leon Young 11,667 (4) Less than 1%
Walter P. Neely 4,499 (5) Less than 1%
Steven K. Bevilaqua 170,000 (6) 3.7%
C. Tom Clowe, Jr. 2,000 Less than 1%
Leland R. Speed 1,000 Less than 1%
John J. Ritchie 21,250 (7) Less than 1%
William J. Liles, III 713,123 (8) 16.2%
Wynne Liles Appleton 689,504 (9) 15.8%
Nancy M. Sawyer 70,600 (10) 1.6%
Steven L. Dutro 26,987 (11) Less than 1%
Brinson Partners, Inc. 430,697 (12) 9.9%
Brinson Holdings, Inc. 430,697 (12) 9.9%
SBC Holding (USA), Inc. 430,697 (12) 9.9%
Swiss Bank Corporation 430,697 (12) 9.9%
Dimensional Fund Advisors, Inc. 304,198 (13) 6.9%
Franklin Resources, Inc. 241,000 (14) 5.5%
Charles B. Johnson 241,000 (14) 5.5%
Rupert H. Johnson, Jr. 241,000 (14) 5.5%
Franklin Advisory Services, Inc. 241,000 (14) 5.5%
Officers & Directors,
as a Group (10 persons) 1,624,126 (15) 34.8%
</TABLE>
(1) Mr. William J. Liles, Jr. passed away on February 11, 1996.
The current address for the Trust is 112 Meadowbrook North, Jackson,
Mississippi 39211. William J. Liles, III and Wynne Liles Appleton
are Co-Trustees of the Trust.
(2) The Trust and Mr. Lee may be deemed to control the Company
because of stock ownership and Mr. Lee's position with the Company.
(3) The address of Mr. Lee is P. O. Box 6098, Jackson, Mississippi
39288.
(4) 5,000 shares are jointly owned with Mr. Young's wife.
(5) 2,499 shares are jointly owned with Dr. Neely's wife.
(6) 120,000 shares are unissued but are subject to an option that
is exercisable at any time prior to May 31, 2005. 50,000 shares are
unissued but are subject to an obligation to purchase under the
Amended and Restated 1996 Stock Purchase Plan on or before August
7, 2001.
(7) 1,250 shares are unissued but are subject to an option that is
exercisable at any time prior to March 31, 2006. 20,000 shares are
unissued but are subject to an obligation to purchase under the
Amended and Restated 1996 Stock Purchase Plan on or before August
7, 2001.
(8) 626,163 shares are owned by the William J. Liles, Jr. Marital
Trust of which Mr. Liles is Co-Trustee. 54,237 shares are owned by
the William J. Liles, Jr. Family Trust in which Mr. Liles has an
indirect pecuniary interest. 824 shares are owned by Mr. Liles'
wife. 3,590 shares are owned by trusts set up for the benefit of
Mr. Liles' two sons of which Mr. Liles is the Trustee. 20,000
shares are unissued but are subject to an obligation to purchase
under the Amended and Restated 1996 Stock Purchase Plan on or
before August 7, 2001. 4,000 shares are unissued but are subject
to an option that is exercisable at any time prior to February 9,
1999.
(9) 54,237 shares are owned by the William J. Liles, Jr. Family
Trust in which Ms. Appleton has an indirect pecuniary interest.
626,163 shares are owned by the William J. Liles, Jr. Marital Trust
of which Ms. Appleton is Co-Trustee. 3,590 shares are owned by
trusts set up for the benefit of Ms. Appleton's two daughters of
which Ms. Appleton is the Trustee. 1,290 shares are owned by Ms.
Appleton's husband.
(10) 50,000 shares are unissued but are subject to an obligation to
purchase under the Amended and Restated 1996 Stock Purchase Plan on
or before August 7, 2001. 20,000 shares are owned jointly with her
husband.
(11) 3,820 shares are jointly owned with Mr. Dutro's wife. 3,167
shares are unissued but are subject to options that are exercisable
at any time prior to March 19, 2002. 20,000 shares are unissued
but are subject to an obligation to purchase under the Amended and
Restated 1996 Stock Purchase Plan on or before August 7, 2001.
(12) Ownership is as of December 31, 1997. Shared voting and shared
dispositive power are claimed as to all shares. The address of
Brinson Partners, Inc. is 209 South LaSalle, Chicago, Illinois
60604-1295. The address of Brinson Holdings, Inc. is 209 South
LaSalle, Chicago, Illinois 60604-1295. The address of SBC Holding
(USA), Inc. is 222 Broadway, New York, New York 10038. The address
of Swiss Bank Corporation is Aeschenplatz, 6 CH-4002, Basel,
Switzerland.
(13) 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
Ownership is as of December 31, 1997. Beneficial ownership of all
shares is disclaimed. Sole voting power is claimed as to 212,599
shares and sole dispositive power is claimed as to all shares.
(14) The address of Franklin Resources, Inc., Charles B. Johnson, and
Rupert H. Johnson, Jr. is 777 Mariners Island Boulevard, San Mateo,
California 94404. The address of Franklin Advisory Services, Inc.
is One Parker Plaza, Sixteenth Floor, Ft. Lee, New Jersey 07024.
Sole voting power and sole dispositive power are claimed by
Franklin Advisory Services, Inc. as to all shares. Franklin
Resources, Inc. is the parent holding company, Charles B. Johnson
and Rupert H. Johnson, Jr. are principal shareholders of the parent
holding company, and Franklin Advisory Services, Inc. is the
investment advisor. Franklin Resources, Inc., Charles B. Johnson,
Rupert H. Johnson, Jr. and Franklin Advisory Services, Inc.
disclaim any economic interest or beneficial ownership in any of
the shares. Ownership is as of December 31, 1997.
(15) 128,417 shares are unissued but are subject to options
exercisable at various times. 160,000 shares are unissued but are
subject to obligations to purchase under the Amended and Restated
1996 Stock Purchase Plan on or before August 7, 2001.
Management
- ----------
The executive officers of the Company are as follows:
<TABLE>
<S> <C>
Principal Occupation and
Name, Position and Tenure Business Experience
with the Company Age For the Past Five Years
__________________________ ___ _____________________________-
Benjamin C. Lee, Jr. 70 See table under Election of
Chairman of the Board of Directors.
Directors
Steven K. Bevilaqua See table under Election of
President and Chief 46 Directors.
Executive Officer
James Leon Young 67 See table under Election of
Secretary and Director Directors.
Steven L. Dutro 42 Employee of the Company since
Chief Financial Officer 1986; Chief Financial Officer
since March, 1998; Acting
Chief Financial Officer from
February, 1997 to February, 1998;
Vice-President of Finance,
Profitability and Planning from
December, 1995 to February, 1997;
Vice-President of Finance from
1994 to 1995; Director of Finance
from 1993 to 1994; Controller
from 1986 to 1992.
Nancy M. Sawyer 53 Employee of the Company and
President Vernon President of Vernon Sawyer
Sawyer Division operations since May, 1995; Vice
President of Operations of Vernon
Sawyer, Inc. from 1964 to April, 1995;
Secretary-Treasurer of Vernon
Sawyer, Inc. from 1986 to April,
1995.
John J. Ritchie 48 Employee of the Company and
Senior Vice President Senior Vice President-Sales and
Sales and Marketing Marketing since April, 1996; Vice
President of Marketing
of Central Transport from July,
1995, to April, 1996; Vice
President of Marketing of Dawes
Transport from May, 1995 to July,
1995; Vice President of Marketing
of Overnite Transportation from
January, 1989, to May, 1995.
</TABLE>
The executive officers have no particular terms of office. They each serve
at the discretion of the Board of Directors.
Certain Transactions
- ---------------------
In the following three paragraphs, the "Company" includes the
Company's subsidiaries.
On January 1, 1978, the Company entered into a ground lease with
Mr. Lee (principal shareholder and current Chairman of the Board of
Directors) and Mr. Liles (now deceased), for part of the real property on
which the Company's Richland, Mississippi, terminal and corporate headquarters
are located. In 1986, this lease was renegotiated to include
contiguous property acquired by Mr. Lee and Mr. Liles, with the lease term
commencing January 31, 1986, and expiring January 31, 2006 ("the 1986 Lease").
The monthly rental payments for the term of the 1986 Lease are $3,000. In
the opinion of the disinterested members of the Board of Directors, the
rental payments under the lease were on terms no less favorable to the
Company than those available from unrelated third parties. During the year
ended January 2, 1998, total lease payments were $36,000.
On December 31, 1991, Messrs. Liles and Lee granted the Company an
option to purchase the land covered by the 1986 Lease for $390,257 when that
lease expires in 2006. In the opinion of the disinterested members of the
Board of Directors, the option to purchase the land covered by the 1986 Lease
was on terms no less favorable to the Company that those available from
unrelated third parties.
James Leon Young, who is a director of the Company, is a
shareholder and officer in the Jackson, Mississippi, law firm
of Young, Williams, Henderson & Fuselier, P.A., general counsel to the
Company. During the year ended January 2, 1998, the Company paid Young,
Williams, Henderson & Fuselier, P.A., fees in payment of services rendered
in connection with litigation, corporate and other matters. No retainer fees
were paid. The total of all such fees did not exceed five percent of
that firm's gross revenues for its last full fiscal year.
Committees and Meeting Data
- ---------------------------
The standing Audit Committee of the Board of Directors consists of
Dr. Neely (Chairman), Mr. Young and Mr. Speed. The Audit Committee recommends
auditors for the Company, oversees the Company's accounting functions and is
the Board's liaison with the Company's independent auditors. The Audit
Committee met 3 times in the year ended January 2, 1998, and meets at least
once annually to review the reports of the Company's independent auditors
and to review the Company's internal accounting procedures.
The Compensation Committee of the Board of Directors consists of
Mr. Young, Mr. Speed and Mr. Clowe (Chairman). The Compensation Committee
reviews the compensation for the officers of the Company. The Compensation
Committee met 2 times in the year ended January 2, 1998.
The Company does not have a nominating committee.
During the year ended January 2, 1998, the Board of Directors met
on 7 occasions. Each director attended 100% of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings
held by all committees of the Board on which he served, except that Mr. Lee
missed 1 Board of Directors meeting and Mr. Speed missed 1 Board of Directors
meeting.
Executive Compensation
- ----------------------
The following table summarizes the compensation paid by the Company
and its subsidiaries to the Company's Chief Executive Officer and to the
Company's four most highly compensated executive officers other than the
Chief Executive Officer who were serving as executive officers at the end of
the year ended January 2, 1998, for services rendered in all capacities to
the Company and its subsidiaries during the fiscal years ended January 2,
1998, January 3, 1997, and December 29, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
AWARDS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NAME AND
PRINCIPAL
POSITION YEAR SALARY BONUS OTHER RES- OPTIONS LTIP ALL
($) ($) ANNUAL TRICTED (#) PAY- OTHER
COMPEN STOCK OUTS COMPEN
SATION AWARDS ($) ($)
($) ($)
Steven K.
Bevilaqua
President
and CEO 1997 $225,000 $124,325 --- 5,757 $9,348(2)
1996 225,000 33,817 $18,192 (1) --- 6,348
1995 168,750 50,000 117,188 (1) 150,000 ---
Benjamin C.
Lee, Jr.
Chairman of
the Board 1997 $139,000 $110,424 $8,080(3)
1996 117,000 --- 7,200
1995 117,000 --- 5,160
John J. Ritchie
Senior Vice
President
Sales and
Marketing 1997 $150,000 $59,417 308 ---
1996 112,500 3,769 5,000 ---
1995 --- --- --- ---
Nancy M.
Sawyer
President
Vernon 1997 $110,000 $79,518 5,875 $4,400 (4)
Sawyer 1996 106,667 71,890 --- 4,267
Division 1995 66,667 --- --- ---
Steven L.
Dutro
Chief
Financial
Officer 1997 $95,153 $54,362 345 $3,806(4)
1996 88,965 7,753 --- 3,559
1995 82,850 --- --- 3,314
(1) Effective April, 1995, Mr. Bevilaqua assumed the position of
President and CEO. As an inducement to accept the position, in 1995,
Mr. Bevilaqua was paid $75,000 relative to his relocation, plus
reimbursement for projected income taxes associated therewith in the amount
of $42,188 plus an additional $18,192 in 1996.
(2) Comprised of $9,000 of matching contributions by the Company to
Mr. Bevilaqua's 401(K) Retirement Plan Account and $348 in insurance premiums
paid by the Company with respect to term life insurance for Mr. Bevilaqua's
benefit.
(3) Comprised of $5,560 of matching contributions by the Company to
Mr. Lee's 401(K) Retirement Plan Account and $2,520 in insurance premiums
paid by the Company with respect to term life insurance for Mr. Lee's benefit.
(4) Comprised of matching contributions by the Company to the officer's
401(K) Retirement Plan Account.
The Company has no employment agreements with its executive officers,
except for Mr. Bevilaqua, whose base salary is $225,000.00 annually.
Further, Mr. Bevilaqua has stock options as set forth in the tables below and
receives the perquisites provided to all Company executives.
Director Compensation
- ---------------------
Directors who are also full-time employees of the Company receive
no additional compensation for their services as directors. In 1997, Dr.
Neely, Mr. Young, Mr. Clowe and Mr. Speed received $12,500.00 for their
services as directors, which included their services at all quarterly and
special Board meetings. The Company's standard arrangement is to pay directors
who are not also full-time employees of the Company $750.00 for each
committee meeting attended as members and $1,000.00 for each committee
meeting attended as chairmen. In 1997, Dr. Neely, Mr. Young, Mr. Speed and
Mr. Clowe received $3,000, $3,750, $3,750, and $2,000, respectively, for their
services at committee meetings attended.
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
The Compensation Committee recommended increases in the salaries
of some of the officers based on length of service, level of responsibility,
and the particular performance of the officers in question. The Committee
determined that the salary of the President and Chief Executive Officer would
remain the same. The Compensation Committee provides incentives
to executive officers through a bonus program which is linked to profit
performance. Salaries are based on: (a) comparable salaries
for similar positions in the industry; and (b) a bi-annual survey of
similarly sized companies with sources such as the National Association of
Finance Council, the Geographic Reference Report, and reports from the
American Trucking Association. The Compensation Committee targets executive
compensation at the middle point of compensation paid by comparable companies.
There was no objection nor modification by the Board of Directors
of the Committee's recommendations.
James Leon Young,
Leland R. Speed
C. Tom Clowe, Jr., Chairman
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
During the fiscal year ended January 2, 1998, the Compensation
Committee of the Board of Directors consisted of Mr. Clowe (Chairman),
Mr. Speed and Mr. Young. Mr. Young is currently serving as Secretary and
has served in such capacity since 1982. Additionally, Mr. Young is a
shareholder and officer in the law firm of Young, Williams, Henderson &
Fuselier, P.A., which acts as general counsel to the Company. During the
year ended January 2, 1998, the Company paid Young, Williams, Henderson &
Fuselier, P.A. fees in payment of services rendered in connection with
litigation, corporate and other matters. No retainer fees were paid. The
total of all such fees did not exceed five percent of that firm's gross
revenues for its last full fiscal year.
Stock Option Plan
- -----------------
The following table sets forth (a) all individual grants of Stock
Options made by the Company and its subsidiaries during the year ended
January 2, 1998, to each of the executive officers named in the Summary
Compensation Table above, (b) the ratio that the number of options granted to
each individual bears to the total number of options granted to all
employees of the Company and its subsidiaries, (c) the exercise price and
expiration date of such options, and (d) estimated
potential realizable values with respect to each grant of options based on
assumed appreciation rates of 5% (compounded annually) and 10% (compounded
annually):
OPTIONS/SAR GRANTS
IN FISCAL YEAR ENDED JANUARY 2, 1998
</TABLE>
<TABLE>
Individual Potential Realizable Value
Grants at Assumed Annual Rates
of Stock Price Appreciation
for Option Terms
<S> <C> <C> <C> <C> <C> <C>
Name Options/SARs % of Total Exercise Expiration 5% ($)10% ($)
Granted (#) Options/SARs or Base Date
Granted to Price
Employees ($/Share)
in Fiscal
Year
Steven K.
Bevilaqua
President
and CEO 5,757 27.9% $11.75 6/30/2007 $37,294 $91,858
Benjamin C.
Lee, Jr.
Chairman of
the Board
John J. Ritchie
Senior Vice
President
Sales and
Marketing 308 1.5% $11.75 6/30/2007 $1,995 $4,914
Nancy M. Sawyer
President
Vernon Sawyer
Division 5,875 28.5% $11.75 6/30/2007 $38,059 $93,741
Steven L. Dutro
Chief Financial
Officer 345 1.7% $11.75 6/30/2007 $2,235 $5,505
</TABLE>
The following table sets forth (a) the number of shares received and
the aggregate dollar value realized in connection with each exercise of
outstanding stock options during the year ended January 2, 1998, by each of
the executive officers named in the Summary Compensation Table above; (b) the
total number and value of all outstanding unexercised options (separately
identifying exercisable and unexercisable options) held by such executive
officers as of January 2, 1998; and (c) the aggregate dollar value of all
such unexercised options that are in-the-money (i.e., when the fair market
value of the common stock that is subject to the option exceeds the exercise
price of the option):
AGGREGATED OPTION/SAR EXERCISES
IN FISCAL YEAR ENDED JANUARY 2, 1998
AND FISCAL YEAR-ENDED OPTION/SAR VALUES (1)
<TABLE>
<S> <C> <C> <C> <C>
Name Shares Acquired Value Number of Value of
on Exercise Realized Unexercised Unexercised
(#) ($) Options/SARs In-the-Money
at FY-End (#) Options/SARs
Exercisable/ at FY-End ($)
Unexercisable(2) Exercisable/
Unexercisable
Steven K. Bevilaqua
President and CEO 90,000 $0
65,757 $0
Benjamin C. Lee, Jr.
Chairman of the Board 0 $0
0 $0
John J. Ritchie 1,250 $2,813 0 $0
Senior Vice President 4,058 $7,808
Sales and Marketing
Nancy M. Sawyer
President
Vernon Sawyer 0 $0
Division 5,875 $5,875
Steven L. Dutro
Chief Financial
Officer 3,167 $0
345 $345
</TABLE>
(1) Not included in this table are options granted pursuant to the Company's
Employee Stock Purchase Plan which are made available to all employees on an
equal basis. For a detailed discussion of the extent of the executive
officers' participation in the plan, see the discussion under the heading
"Employee Stock Purchase Plan".
(2) The number listed represents the number of shares of the Company's common
stock subject to all of the options held by the named officer.
Employee Stock Purchase Plan ("ESPP")
- -------------------------------------
The Company has in place its Employee Stock Purchase Plan ("ESPP")
pursuant to Section 423 of the Internal Revenue Code. The ESPP covers an
aggregate of 133,333 shares of the Company's common stock. 70,288 shares are
currently available for purchase under the ESPP. The purpose of the ESPP is
to promote employee ownership in the Company. The Company believes that
employees who participate in the ESPP will have a closer identification
with the Company by virtue of their ability as stockholders to participate
in the Company's growth and earnings. The ESPP is also designed to provide
motivation for participating employees to remain in the employ of the
Company and to give a greater effort on behalf of it.
The Company's Board of Directors acts as Administrator of the ESPP.
The Board does not receive any compensation from the ESPP. The Board of
Directors may, in its sole discretion, amend or terminate the ESPP, except
that a termination shall not affect any option granted under the ESPP and
no amendment may be made to the ESPP without approval of the stockholders
if the amendment would require the sale of more than 133,333 shares under
the ESPP. Unless earlier terminated, the ESPP will terminate when all
133,333 shares reserved for the ESPP are sold.
The ESPP permits eligible employees to purchase common stock in
cash or through payroll deductions that cannot exceed 20% of the employee's
regular base salary. Participants may purchase between 10 and 300 shares
each year pursuant to the ESPP, and if the number of shares subscribed for
exceeds the number of shares available in the ESPP, the purchase will
be made pro rata. There are restrictions on purchase of shares by owners
of five percent of the voting stock of the Company and holders of options
to purchase stock of the Company outside the ESPP. The purchase price for
the stock is not less than 85% of its fair market value at the beginning of
the offering period and is set by the Board of Directors or a committee
thereof.
Employees of the Company on October 1 of the year in which an offering is
made who are customarily employed by the Company for at least 20 hours per
week on a regular basis are eligible to participate in the ESPP.
During 1997, the following executive officers listed in the Summary
Compensation Table participated in the ESPP and purchased shares in the
following amounts: Ms. Sawyer - 300.
During 1997, 26 employees purchased 3,276 shares at $11.50 per
share. 55 employees currently have outstanding subscriptions to purchase
5,227 shares at $12.375 per share.
Performance Graph
- -----------------
The following line graph compares cumulative five-year shareholder
returns (1) among the Company's Common Stock, the University of Chicago's
Center for Research in Securities Prices ("CRSP") Total Return Index for
The NASDAQ Stock Market, and the CRSP NASDAQ Trucking & Transportation
Stocks Index:
Total Return For The Year
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Index 1992 1993 1994 1995 1996 1997
NASDAQ
COMPOSITE (US
ONLY) 100.0 114.8 112.2 158.7 195.2 239.5
NASDAQ TRUCKING
& TRANSPORTATION 100.0 121.5 110.2 128.5 141.8 181.7
KLLM TRANSPORT
SERVICES, INC. 100.0 70.4 72.5 51.9 46.3 63.0
(1) Assumes $100 invested on December 31, 1992, and reinvestment of all
dividends.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who own more
than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Such persons are also required
to furnish the Company with copies of all forms they file under this
regulation. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and representations that
no other reports were required, for the fiscal year ended January 2, 1998,
all Section 16(a) filing requirements applicable to its directors and
executive officers were complied with, except that Form 3s for the Estate
of William J. Liles, Jr. and Mrs. William J. Liles, Jr. were filed late,
the Form 3 holdings for Ms. Irene C. Howard, Mr. Larry C. Simpson, Mr.
Vincent A. Schott, Mr. James M. Richards, Jr. and Mr. Daniel M. Thomas,
Jr. were reported on Form 5, and a Form 4 transaction
for Mr. John J. Ritchie was reported on Form 5.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Ernst & Young LLP independent public accountants, to act as
auditors for the fiscal year ending January 1, 1999. Ernst & Young LLP have
audited the accounts of the Company since 1986. Representatives of Ernst &
Young LLP are expected to be present at the annual meeting and will have an
opportunity to make a statement if they desire to do so and will be available
to respond to appropriate questions. Neither Ernst & Young LLP nor any of
its partners has any direct or indirect financial interest in the Company.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than
November 1, 1998, to be included in the Company's proxy materials for the
1999 Annual Meeting. Shareholder proposals should be addressed to: KLLM
Transport Services, Inc., Post Office Box 6098, Jackson, Mississippi 39288,
Attention Secretary. No shareholder proposals were received
for inclusion in the proxy materials for the 1998 meeting.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may
come before the meeting. However, if any other matters are properly brought
before the meeting, the proxies named in the enclosed proxy will vote in
accordance with their best judgment on such matters.
KLLM TRANSPORT SERVICES, INC.
THIS PROXY IS BEING SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS.
The undersigned hereby appoints Benjamin C. Lee, Jr., and Steven K.
Bevilaqua, or either of them, as proxies with the power to appoint their
substitutes and hereby authorizes them to represent and vote, as designated
below, all the shares of Common Stock of KLLM Transport Services, Inc. (the
"Company"), held of record by the undersigned on March 10, 1998, at the
Annual Meeting of Stockholders of KLLM Transport Services, Inc., to be
held on Tuesday, April 21, 1998, and at any adjournments thereof, with all
powers the undersigned would possess if personally present.
1. Election of Directors. (Check only one box below. TO WITHHOLD
AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE THROUGH THE NAME OF THE NOMINEE.)
-- To vote for all the nominees listed below:
Steven K. Bevilaqua; C. Tom Clowe, Jr.; Benjamin C. Lee, Jr.;
William J. Liles, III; Walter P. Neely;
Leland R. Speed; James Leon Young
or
-- To withhold authority to vote for all nominees listed above.
2. Ratification of the selection of Ernst & Young LLP as the Company's
independent auditors (check only one box below).
-- FOR -- AGAINST -- ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournments thereof.
If a nominee for director is unable to serve or, for good cause, will not
serve as director, the proxies may vote for any person for director in their
discretion.
When properly executed, this proxy will be voted in the manner
directed. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF ALL NOMINEES LISTED AND FOR THE PROPOSALS SOLICITED. The undersigned
hereby revokes any proxy heretofore given by the undersigned to vote
at the Annual Meeting. This proxy may be revoked prior to its exercise,
either in person or in writing.
_________________________________________
Signature (Seal)
_________________________________________
Signature if held jointly (Seal)
____________________________________, 1998
(Date)
1. Sign your name exactly as it appears on the label.
2. When signing as attorney, executor, administrator,
trustee, or guardian, please state full title as such.
3. If a corporation, please sign in full corporate
name by president or other authorized officer.
4. If a partnership, please sign in partnership name
by authorized person.
5. When shares are held jointly, both stockholders
must sign this proxy.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
</TABLE>
