<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
P.A.M. TRANSPORTATION SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
P.A.M. TRANSPORTATION SERVICES, INC.
HIGHWAY 412 WEST
TONTITOWN, ARKANSAS 72770
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock of P.A.M. Transportation Services, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
P.A.M. Transportation Services, Inc., a Delaware corporation (the "Company"),
will be held at the Marriott Hotel, 5402 E. Lincoln Drive, Scottsdale, Arizona
85253, on Friday, May 22, 1998 at 9:00 a.m. local time, for the following
purposes:
(1) To set the number of directors for the ensuing year at six and to elect
six directors to serve for a term of one year and until their
successors have been elected and qualified;
(2) To approve an amendment to the 1995 Stock Option Plan of the Company to
increase the number of shares available for grant thereunder from
600,000 to 2,600,000 shares; and
(3) To conduct such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record as of the close of business on April 16,
1998 will be entitled to notice of and to vote at said meeting or any
adjournment thereof.
By Order of the Board of Directors
/S/ Robert W. Weaver
Robert W. Weaver
President and Chief Executive Officer
April 27, 1998
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU
ARE URGED TO COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE
ACCOMPANYING RETURN ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED BY THE SENDER
IF MAILED WITHIN THE UNITED STATES.
<PAGE> 3
P.A.M. TRANSPORTATION SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1998
PROXY STATEMENT
This proxy statement and form of proxy, which are first being mailed to
stockholders on or about April 27, 1998, are furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of P.A.M.
Transportation Services, Inc., for use at the Annual Meeting of Stockholders of
the Company to be held at the Marriott Hotel, 5402 E. Lincoln Drive, Scottsdale,
Arizona 85253, on Friday, May 22, 1998, at 9:00 a.m., local time, and at any or
all adjournments thereof. The address of the principal executive offices of the
Company is Highway 412 West, Tontitown, Arkansas 72770 and the Company's
telephone number is (501) 361-9111.
The cost of this solicitation will be borne by the Company. In addition
to the mails, proxies may be solicited by officers and regular employees of the
Company, without remuneration, by personal interviews, telephone and telegraph.
It is anticipated that banks, brokerage houses and other custodians, nominees
and fiduciaries will forward soliciting material to beneficial owners of stock
entitled to vote at the meeting, and such persons will be reimbursed for the
out-of-pocket expenses incurred by them in this connection.
Any proxy given pursuant to this solicitation may be revoked by any
stockholder who attends the meeting and gives oral notice of his or her election
to vote in person, without compliance with any other formalities. In addition,
any proxy given pursuant to this solicitation may be revoked prior to the
meeting by delivering to the Secretary of the Company an instrument revoking it
or a duly executed proxy for the same shares bearing a later date. Proxies which
are returned properly executed and not revoked will be voted in accordance with
the stockholder's directions specified thereon. Where no direction is specified,
proxies will be voted FOR the election of each of the nominees listed below and
FOR the adoption of the amendment to the Company's 1995 Stock Option Plan.
Abstentions and broker non-votes will not be counted as votes either in favor of
or against the proposal to amend the 1995 Stock Option Plan.
Only stockholders of record at the close of business on April 16, 1998
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. As of April 6, 1998, the Company had outstanding 8,299,157
shares of common stock. Each share of common stock issued and outstanding on
such record date is entitled to one vote.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 16, 1998
with respect to ownership of the outstanding common stock by (i) all persons
known to the Company to own beneficially more than five percent (5%) of any
class of outstanding stock of the Company, (ii) each director of the Company and
each nominee for director, (iii) each of the "Named Executive Officers" of the
Company as shown in "Executive Compensation" herein, and (iv) all directors and
executive officers of the Company as a group. Unless otherwise indicated, the
named person has sole voting and investment powers with respect to all shares.
<TABLE>
<CAPTION>
Shares of Percent
Common Stock of
Beneficial Owner Beneficially Owned Class
---------------- ------------------ -----
<S> <C> <C>
Matthew T. Moroun 5,609,713(1) 67.6%
12225 Stephens Road
Warren, Michigan 48091
Norman E. Harned 3,092,000(2) 37.3%
12225 Stephens Road
Warren, Michigan 48091
Robert W. Weaver 597,428(3) 7.2%
4470 Bridgewater Lane
Fayetteville, Arkansas 72701
Daniel C. Sullivan 14,000(4) *
Charles F. Wilkins 3,000(5) *
W. Clif Lawson 76,500(6) *
Larry J. Goddard 67,813(7) *
Directors and Executive Officers 6,368,454(8) 76.7%
as a Group (6 persons)
</TABLE>
* Less than 1%.
- --------------------
(1) Includes 7,000 shares subject to presently exercisable non-qualified
stock options, 3,092,000 shares held in a trust of which Mr. Moroun is
a co-trustee and a beneficiary, and 2,510,713 shares held by a limited
partnership, the general partner of which is controlled by Mr. Moroun.
(2) Mr. Harned is a co-trustee with Matthew T. Moroun of the trust which
holds these shares.
(3) Includes 15,000 shares subject to presently exercisable incentive stock
options.
(4) Includes 5,000 shares subject to presently exercisable non-qualified
stock options.
(5) Includes 3,000 shares subject to presently exercisable non-qualified
stock options
(6) Includes 60,000 shares subject to presently exercisable incentive stock
options.
(7) Includes 53,000 shares subject to presently exercisable incentive stock
options.
(8) Includes 143,000 shares subject to presently exercisable stock options.
There are no arrangements known to the Company, the operation of which
may, at a subsequent date, result in a change in control of the Company.
2
<PAGE> 5
AGENDA ITEM ONE
ELECTION OF DIRECTORS
Pursuant to the Bylaws of the Company, the number of members of the
Board of Directors to be set by resolution of the stockholders is proposed to be
six, all of whom are to be elected at the Annual Meeting. Proxies received will
be voted for the nominees named below, unless authority to do so is withheld. In
the event any nominee is unable or declines to serve as a director at the time
of the meeting, the persons named as proxies therein will have discretionary
authority to vote the proxies for the election of such person or persons as may
be nominated in substitution by the present Board of Directors. Management knows
of no current circumstances which would render any nominee named herein unable
to accept nomination or to serve if elected.
Members of the Board of Directors are elected annually to serve until
the next annual meeting of stockholders or until their successors are elected
and qualified. Directors shall be elected by a plurality of the votes of shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors.
The following persons have been nominated by management for election to
the Board of Directors:
ROBERT W. WEAVER, age 48, is a co-founder of the Company and served as
its Vice President and a director from March 1980 to June 1986. He was President
and Chief Operating Officer and a director from June 1986 until he resigned in
February 1987. Between February 1987 and September 1989, he was self-employed as
a transportation consultant. In September 1989, Mr. Weaver returned to the
Company as President and Chief Operating Officer and a director. On February 22,
1990, he was appointed Chief Executive Officer.
DANIEL C. SULLIVAN, age 57, has been a practicing attorney, specializing
in transportation law, for more than ten years. Mr. Sullivan is currently a
member of the firm of Sullivan & Hincks, Oak Brook, Illinois. Mr. Sullivan has
served as a director of the Company since June 1986.
MATTHEW T. MOROUN, age 25, is a stockholder and director (since 1993) of
CenTra, Inc., a transportation holding company based in Warren, Michigan
("CenTra"). Since 1994, Mr. Moroun has been a director, stockholder and manager
of Liberty Bell Agency, an insurance claims adjustment company, and since 1995,
has been Chairman of the Board of DuraRock Reinsurance, Ltd., a reinsurance
company. Prior to 1995, Mr. Moroun attended Dickinson College, Carlisle,
Pennsylvania, where he earned his bachelors degree in December 1994. Mr. Moroun
has served as a director of the Company since May 1992.
CHARLES F. WILKINS, age 59, retired in January 1995 after 34 years of
employment with Ford Motor Company, and since January 1995 has been
self-employed as a transportation consultant. He served in various positions
with Ford Motor Company in transportation management, including three years of
service as Traffic Manager in Europe. Mr. Wilkins retired from the position of
Director, Transportation and Traffic Office, in which he had served since 1990.
Mr. Wilkins has been a member of the National Motor Carrier Advisory Committee
of the Federal Highway Administration and was previously active in the National
Industrial Transportation League as Chairman of the Audit Committee and Third
Vice Chairman. Mr. Wilkins is currently an associate member of the American
Society of Transportation and Logistics and a member of the Council of Logistics
Management. Mr. Wilkins has served as a director of the Company since June 1995.
FREDERICK P. CALDERONE, age 47, currently serves as a Vice President of
CenTra. Mr. Calderone has held this position for the past 14 years. Prior to
joining CenTra, Mr. Calderone was a partner with
3
<PAGE> 6
Deloitte, Haskins, & Sells, Certified Public Accountants (now Deliotte & Touche
LLP). Mr. Calderone is a certified public accountant and an attorney.
JOSEPH J. CASAROLL, age 60, retired in December 1997 from General
Motors Corporation ("GM") where he was Director of Material Transportation, GM
North American Operations. Mr. Casaroll began his career with GM in 1959 in the
Chevrolet Motor Division and, during his career with GM, held various
transportation and purchasing assignments. Mr. Casaroll is a past president of
the Michigan Transportation Association and currently serves on the Board of
Directors of the National Industrial Transportation League. He is also a member
of the Council of Logistics Management and the Society of Packaging
Professionals.
COMMITTEES OF THE BOARD AND MEETINGS
The Company's Board of Directors has the following standing committees:
(A) The Executive Committee, currently comprised of Messrs. Weaver and
Moroun, exercises the authority of the Board of Directors in accordance with the
Bylaws of the Company between regular meetings of the Board. The Executive
Committee held no meetings during 1997.
(B) The Audit Committee, currently comprised of Messrs. Sullivan,
Wilkins and Moroun, reviews and makes recommendations to the Board of Directors
on the Company's audit procedures and independent auditors' report to management
and recommends to the Board of Directors the appointment of independent auditors
for the Company. The Audit Committee held one meeting during 1997.
(C) The Compensation and Stock Option Committee, currently comprised of
Messrs. Sullivan, Wilkins and Moroun, reviews and makes recommendations to the
Board of Directors with respect to compensation of officers of the Company as
well as assists the Board in the administration of the Company's Stock Option
Plans. The Compensation and Stock Option Committee held one meeting during 1997.
The Company does not have a Directors Nominating Committee, that
function being reserved to the entire Board of Directors. The Company does not
have any formal procedure for considering stockholders' suggestions for director
nominees prior to the solicitation of proxies. At the Annual Meeting, the Chair
will entertain nominations for directors in accordance with the Company's Bylaws
and Robert's Rules of Order.
During 1997, the Board of Directors held a total of two meetings and
acted once by unanimous written consent. Each incumbent director attended at
least 75% of the aggregate of all meetings held by the Board of Directors and by
committees of the Board on which the director served during the director's
period of service.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, certain officers and persons who own more than
10% of the outstanding common stock of the Company, to file with the Securities
and Exchange Commission reports of changes in ownership of the common stock of
the Company held by such persons. Officers, directors and greater than 10%
stockholders 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, during the fiscal year
ended December 31, 1997, the Company's officers, directors and 10% stockholders
complied with all
4
<PAGE> 7
Section 16(a) filing requirements applicable to them, except as follows: Larry
J. Goddard, Vice President of Finance and Chief Financial Officer, filed one
report on Form 4 late reporting one transaction and Daniel C. Sullivan, a
director, filed one report on Form 4 late reporting one transaction.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each other executive officer whose salary and bonus
exceeded $100,000 (the "Named Executive Officers") for the years ended December
31, 1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------------------------------
Name Securities All
and Principal Underlying Other
Position Year Salary Bonus Options (#) Compensation(1)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert W. Weaver 1997 $284,000 $42,000 -- $400
President and Chief 1996 266,090 -- -- 400
Executive Officer; 1995 245,875 49,000 25,000 400
Director
W. Clif Lawson 1997 $150,034 $22,375 -- $400
Executive Vice President 1996 133,782 -- -- 400
and Chief Operating 1995 123,757 24,335 50,000 400
Officer
Larry J. Goddard 1997 $120,440 $18,750 -- $400
Vice President of 1996 107,208 -- -- 400
Finance, 1995 94,439 20,000 50,000 400
Chief Financial Officer
and Secretary/Treasurer
</TABLE>
--------------------
(1) Represents amounts contributed by the Company pursuant to the Company's
401(k) Plan.
EMPLOYMENT AGREEMENT
The Company entered into an Employment Agreement (the "Agreement") with
Robert W. Weaver effective January 1, 1995, which expires on June 30, 1998
(unless extended pursuant to the Agreement). The Agreement provides that Mr.
Weaver would be paid a base salary of $280,000 for fiscal year 1997, and
$145,000 for the six months ending June 30, 1998. Mr. Weaver participates in
bonus programs as authorized by the Board of Directors and is provided an
automobile. Mr. Weaver has agreed not to compete with the Company for a period
of one year following the termination of his employment with the Company. The
Company has the right to extend the Agreement for an additional period of one
year beyond the initial termination date at an annual base salary of $300,000.
STOCK OPTION PLANS
During 1997, no stock options were granted to any of the Named
Executive Officers.
5
<PAGE> 8
The following table sets forth information regarding (a) the number of
shares of common stock received upon exercise of stock options by the Named
Executive Officers in the fiscal year ended December 31, 1997, (b) the net value
realized upon such exercise, (c) the number of unexercised options held at
December 31, 1997 and (d) the aggregate dollar value of unexercised options held
at December 31, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------------------
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options at
Shares Options at Fiscal Year-End Fiscal Year-End(1)
Acquired Value --------------------------- ---------------------------
Name On Exercise(#) Realized(2) Exercisable / Unexercisable Exercisable / Unexercisable
- -------------------- -------------- ----------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Robert W. Weaver 25,000 $ 156,250 15,000 / 10,000 $ 55,200 / $36,800
W. Clif Lawson 15,000 $ 90,000 60,000 / 20,000 $356,250 / $85,000
Larry J. Goddard 22,000 $ 156,750 53,000 / 20,000 $302,875 / $85,000
</TABLE>
- --------------------
(1) Dollar values were calculated by determining the difference between the
fair market value ($10.00 per share at December 31, 1997) and the
options' exercise price, multiplied by the number of shares underlying
the options. An option is "in-the-money" if the market value of the
common stock underlying the option exceeds the option's exercise price.
(2) Dollar values were calculated by determining the difference between the
fair market value of the common stock underlying the options on the
date such options were exercised and the options' exercise price,
multiplied by the number of shares underlying the options.
COMPENSATION OF DIRECTORS
Non-employee directors are currently paid $3,000 per year and $1,000
per Board or committee meeting attended, plus their expenses in attending such
meetings. Directors who are also Company employees are not additionally
compensated for their services as members of the Board of Directors.
Pursuant to automatic grant provisions under the Company's
Non-Qualified Stock Option Plan, on March 2 of each year, each non-employee
director is granted an option to purchase 1,000 shares of common stock at an
exercise price equal to 100% of the fair market value of such stock on the date
of grant. During 1997, options were granted to three non-employee directors of
the Company covering an aggregate of 3,000 shares of common stock at a per share
exercise price of $6.00.
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Daniel C. Sullivan and Matthew T. Moroun served as members of the
Compensation and Stock Option Committee during 1997. Mr. Sullivan's law firm
provides legal services to the Company from time to time and receives fees for
services rendered. Mr. Moroun is a stockholder and director of CenTra, Inc., a
transportation holding company based in Warren, Michigan ("CenTra"). The Company
has had business relationships with certain transportation subsidiaries of
CenTra, as described more fully below.
During 1997, certain subsidiaries of CenTra made payments to the
Company for transported freight in the aggregate amount of $9,612,830.
6
<PAGE> 9
During 1997, the Company made payments to certain subsidiaries of
CenTra in the aggregate amount of $922,337. The principal components of these
payments included fuel ($485,685), tires and road service ($137,357), and
miscellaneous services or expenses ($299,295).
Management believes that each of the above transactions was entered
into on terms as favorable to the Company as could have been obtained from
unaffiliated third parties, at the time such transactions were negotiated.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Additional Information with Respect to Compensation Committee
Interlocks and Insider Participation in Compensation Decisions" which describes
certain business relationships between the Company and certain of its directors.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this proxy statement, in whole or in part, the following
Report of the Board of Directors on Executive Compensation and the Stockholder
Return Performance Graph shall not be incorporated by reference into any such
filings.
REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company reported net income of $6.3 million or $.76 per share for
the year ended December 31, 1997, and has been profitable since 1992. Prior to
1992, the Company experienced losses in each of the three previous years. The
compensation paid to the executive officers of the Company, including the Chief
Executive Officer, has been conservative in light of the financial performance
of the Company prior to 1992 and as a part of its efforts to return to and
increase profitability. To reward the executive officers of the Company for the
Company's significantly improved performance in recent years, the executive
officers were paid a cash bonus for fiscal 1995 and 1997 under an Incentive
Compensation Plan adopted by the Board of Directors (described below). No
bonuses were paid in 1996 to executive officers.
For fiscal 1997 and in previous years, the Board of Directors has
adopted an Incentive Compensation Plan covering all employees (except employees
who are participating in an existing cash bonus plan), including the executive
officers, which provides for the payment of a cash bonus for any calendar year
in which the Company achieves certain specified operating ratios. For each
targeted operating ratio goal, participating employees earn a specified
percentage of their base compensation as a cash bonus. The Board of Directors
believes this program serves as an incentive to all participating employees
(currently approximately 180 employees) to give greater effort on behalf of the
Company. This plan will continue in effect for fiscal years 1998 and 1999.
Effective January 1, 1995, the Company entered into an Employment
Agreement (the "Employment Agreement") with Robert W. Weaver, its President and
Chief Executive Officer, expiring June 30, 1998, and has the option to extend
the Employment Agreement for an additional one year period. During the initial
term of the Employment Agreement, Mr. Weaver's annual base salary ranges from
$245,000 to $290,000 (pro rated in 1998). The Employment Agreement was
negotiated between Mr. Weaver and certain directors serving at the time of its
approval, and the Board of Directors believes that the annual compensation to be
paid to Mr. Weaver pursuant to the Employment Agreement compares favorably to
the compensation paid to the chief executive officers of other public
transportation companies similarly situated. Mr. Weaver is entitled to
participate in any bonus pool or additional incentive compensation plans
authorized
7
<PAGE> 10
and approved by the Board of Directors from time to time. During 1997, pursuant
to the Company's Incentive Compensation Plan, Mr. Weaver was paid a bonus of
$42,000. Mr. Weaver did not receive any other bonus or incentive compensation
during 1997.
With respect to the other executive officers of the Company, including
(i) the Executive Vice President and Chief Operating Officer and (ii) the Vice
President of Finance, Chief Financial Officer and Secretary/Treasurer, the Board
of Directors believes that the total compensation of these individuals has been
modest. Prior to 1994, salary and bonus for each of these individuals amounted
to less than $100,000 per year. These officers received a cash bonus during 1995
in the amounts of $24,335 and $20,000, respectively, and, during 1997, in the
amounts of $22,375 and $18,750, respectively, under the Company's Incentive
Compensation Plan, reflecting the Company's improved performance in recent
years.
The Company maintains Stock Option Plans for the purpose of awarding
options to its executive officers and other key employees in the discretion of
the Compensation and Stock Option Committee. No options were granted to any
executive officer during 1996 or 1997.
The Board of Directors expects that as the Company's performance
continues to improve, the Compensation and Stock Option Committee may take
action in the future, based upon guidelines provided by the Board of Directors,
to provide additional incentive compensation to the Company's executive
officers. The Company's future compensation policies will be developed in light
of the Company's profitability and with the goal of rewarding members of
management for their contributions to the Company's success.
It is the Company's intention that the compensation to be paid to its
executive officers will not exceed the present maximum allowable amount for
purposes of deductibility set forth in the Internal Revenue Code.
Robert W. Weaver Daniel C. Sullivan
Matthew T. Moroun Charles F. Wilkins
8
<PAGE> 11
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total stockholder return on the Company's common stock against
the cumulative total return of the CRSP Total Return Index for the NASDAQ Stock
Market (U.S. Companies) and the CRSP Total Return Index for the NASDAQ Trucking
and Transportation Stocks for the period of five years commencing December 31,
1992 and ending December 31, 1997. The graph assumes that the value of the
investment in the Company's common stock and each index was $100 on December 31,
1992.
P.A.M. TRANSPORTATION SERVICES, INC.
STOCKHOLDER RETURN PERFORMANCE GRAPH
1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PTSI $100.00 $500.00 $480.00 $610.00 $364.80 $800.00
NASDAQ Stock Market U.S. $100.00 $114.80 $112.21 $158.70 $195.19 $239.53
NASDAQ Trucking & Transportation Stocks $100.00 $121.49 $110.17 $121.46 $141.78 $181.59
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
AGENDA ITEM TWO
PROPOSAL TO AMEND THE 1995 STOCK OPTION PLAN
On June 29, 1995, the Board of Directors of the Company adopted the
1995 Stock Option Plan (the "1995 Plan") for eligible officers, directors and
key employees of the Company and its subsidiaries. The 1995 Plan provides for
the grant of both incentive and non-qualified stock options. The purpose of the
1995 Plan is to provide motivation for participating directors, officers and key
employees to remain in the employ of, and to give a greater effort on behalf of,
the Company.
The 1995 Plan provides for the grant of options to purchase up to an
aggregate of 600,000 shares of Company common stock. Under the terms of the 1995
Plan, the Stock Option Committee of the Board of Directors may grant options to
purchase shares of common stock to eligible officers, directors and key
employees of the Company or of a subsidiary of the Company.
As of April 1, 1998, the Company had granted options to purchase shares
of common stock pursuant to the 1995 Plan as follows: (i) each Named Executive
Officer (Robert W. Weaver: 25,000 shares; W. Clif Lawson: 50,000 shares; and
Larry J. Goddard: 50,000 shares); (ii) all current executive officers as a
group: 125,000 shares; (iii) all current directors who are not executive
officers as a group: 0 shares; and (iv) all employees, including all current
officers who are not executive officers, as a group: 85,000 shares.
DESCRIPTION OF PROPOSED AMENDMENT
On April 20, 1998, the Board of Directors of the Company adopted an
amendment to the 1995 Plan which would increase the number of shares of Company
common stock available for grant thereunder to 2,600,000 shares from 600,000
shares. As of April 13, 1998, 390,000 shares of common stock remained available
for grant under the 1995 Plan. The proposed increase in the number of authorized
shares would ensure the uninterrupted continuation of the 1995 Plan. The Board
of Directors recommends that stockholders vote FOR the proposed amendment. The
affirmative vote of a majority of the shares of Company common stock represented
in person or by proxy at the Annual Meeting is necessary for the approval of the
amendment to the 1995 Plan.
DESCRIPTION OF 1995 PLAN
Effective Date. The effective date of the 1995 Plan is June 29, 1995.
The 1995 Plan shall remain in effect until all shares subject to or which may
become subject to the 1995 Plan shall have been purchased pursuant to options
granted under the 1995 Plan, provided that options under the 1995 Plan must be
granted within ten (10) years from the effective date.
Shares Subject to the 1995 Plan. The shares of the Company's common
stock available for issuance under the 1995 Plan may, at the election of the
Board of Directors, be either treasury shares or shares originally issued for
such purpose. The maximum number of shares which shall be reserved and made
available for sale under the 1995 Plan shall be 600,000. Any shares subject to
an option which for any reason expires or is terminated unexercised may again be
subject to an option under the 1995 Plan.
Persons Eligible to Participate in the 1995 Plan. Under the 1995 Plan,
options may be granted only to officers, directors, key employees and
consultants of the Company and its subsidiaries.
Administration of the 1995 Plan. The 1995 Plan shall be administered by
the Board of Directors or by a committee comprised of no fewer than two (2)
members appointed by the Board of Directors of the Company from among its
members (the "Committee"). Members of the Committee shall be "Non-Employee
Directors" as such term is defined under Rule 16b-3(b)(3) under the Securities
Exchange Act of
10
<PAGE> 13
1934, as amended. Subject to the provisions of the 1995 Plan, the Board of
Directors or the Committee has the authority to determine the individuals to
whom options shall be granted and to determine exercise prices, the number of
shares covered by each option, vesting requirements, and the terms and
conditions of each option granted under the plan.
Exercise Price, Terms of Exercise and Payment for Shares. Each option
granted under the 1995 Plan will be represented by an Option Agreement which
shall set forth the terms particular to that option, including the number of
shares covered by the option, the exercise price, the term of the option and any
vesting requirements.
The exercise price of options granted under the 1995 Plan will be
determined by the Committee, but in no event shall be less than 100% of the
Market Price of the common stock on the date of the grant of the option;
provided, however, that any non-qualified option may be granted at a purchase
price equal to not less than 75% of the Market Price of the common stock on the
date of the grant of the option. The term Market Price is defined in the 1995
Plan to be the fair market value of the Company's common stock as determined by
the Board of Directors or the Committee, acting in good faith, under any method
consistent with the Internal Revenue Code of 1986, as amended (the "Code"), or
Treasury Regulations thereunder, as the Board or the Committee shall in its
discretion apply at the time of the grant of the option concerned.
Options may be exercised in whole or in part by the optionee, but in no
event later than ten (10) years from the date of the grant. Any incentive stock
option granted under the 1995 Plan to an individual who owns more than 10% of
the total combined voting power of all classes of stock of the Company or a
subsidiary may not be purchased at a price less than 110% of the Market Price on
the day the option is granted, and no such option may be exercised more than
five (5) years from the date of grant. The purchase price for the shares shall
be paid in cash or shares of common stock of the Company, or a combination of
both. Upon payment, the Company will deliver stock certificates for such shares
to the optionee.
Automatic Grant of Options to Non-Employee Directors. The 1995 Plan
grants to non-employee directors of the Company, without necessity of action by
the Board of Directors or any committee thereof, an annual option to purchase
1,000 shares of common stock on March 2 of each year at an exercise price equal
to the Market Price of such stock on the date of grant. Such options are
exercisable from the date of grant until the date which is the fifth anniversary
of the date of grant, unless earlier terminated in accordance with the
provisions of the 1995 Plan. Options granted to non-employee directors under the
1995 Plan conform in all respects to the terms of the 1995 Plan.
Termination of Service. In the event that a holder of an option granted
under the 1995 Plan ceases to be a director or employee of the Company or any
subsidiary of the Company for any reason other than death or total and permanent
disability, any option or unexercised portion thereof, which is otherwise
exercisable on the date of such termination, shall expire three (3) months from
the date of such termination, but in no event after the term provided in the
option agreement. Any options which are not exercisable on the date of such
termination shall immediately terminate.
Upon the death or total and permanent disability of the holder of an
option, any option or unexercised portion thereof which is otherwise exercisable
shall expire within one year of the date of such death or disability. Any
options which were not exercisable on the date of such death or disability shall
be immediately exercisable for a period of one year.
Options granted under the 1995 Plan are exercisable during the lifetime
of the optionee only by the optionee. All options granted under the 1995 Plan
are non-transferable except by will or under the laws of descent and
distribution.
11
<PAGE> 14
Reorganization and Recapitalization. In case the Company is merged or
consolidated with another corporation and the Company is not the survivor, or in
case the property or stock of the Company is acquired by another corporation, or
in case of a separation, reorganization, recapitalization or liquidation of the
Company, the Board of Directors of the Company, or the Board of Directors of any
corporation assuming the obligations of the Company, shall either make
appropriate provision for the protection of any outstanding options, including
without limitation the substitution of appropriate stock of the Company or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect of the shares of the common stock of the Company, or upon
written notice to the optionee, provide that the option must be exercised within
60 days or it will be terminated.
In the event that dividends are payable in common stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
common stock of the Company, the number of shares available under the 1995 Plan
will be increased or decreased proportionately, as the case may be, and the
number and option exercise price of shares deliverable upon the exercise
thereafter of any option theretofore granted will be increased or decreased
proportionately, as the case may be.
Limitation on Number of Shares that may be Purchased. For options
granted under the 1995 Plan, the aggregate fair market value (determined at the
time the option was granted) of the shares with respect to which incentive stock
options are exercisable for the first time by an optionee during any calendar
year shall not exceed $100,000.
Amendment and Termination of the 1995 Plan. With respect to any shares
of stock at the time not subject to options, the Board of Directors may at any
time and from time to time modify or amend the 1995 Plan in any respect, except
that no such modification or amendment shall be made absent the approval of the
stockholders of the Company to: (i) increase the maximum number of shares for
which options may be granted under the 1995 Plan; (ii) reduce the option price
or waiting period; (iii) extend the period during which options may be granted
or exercised; (iv) change the class of persons eligible for incentive stock
options; (v) otherwise materially modify the requirements as to eligibility for
participation in the 1995 Plan; or (vi) otherwise materially increase the
benefits accruing to participants under the 1995 Plan. The Company's Board of
Directors may also suspend the granting of options pursuant to the 1995 Plan at
any time and may terminate the 1995 Plan at any time; provided, however, no such
suspension or termination shall modify or amend any option granted before such
suspension or termination unless the affected participant consents in writing,
to such modification or amendment or there is a dissolution or liquidation of
the Company.
With the consent of the affected optionee, the Board of Directors or
the Committee may amend outstanding option agreements in a manner consistent
with the 1995 Plan. Without employee consent, the Board of Directors may at any
time and from time to time modify or amend option agreements in such respects as
it deems necessary in order that incentive options granted under the 1995 Plan
shall comply with the appropriate provisions of the Code and regulations
thereunder which are in effect from time to time respecting "Qualified Incentive
Options."
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. All incentive stock options granted or to be
granted under the 1995 Plan which are designated as incentive stock options are
intended to be incentive stock options as defined in Section 422 of the Code.
Under the provisions of Section 422 of the Code, neither the holder of
an incentive stock option nor the Company will recognize income, gain, deduction
or loss upon the grant or exercise of an incentive stock option. An optionee
will be taxed only when the stock acquired upon exercise of his incentive stock
option
12
<PAGE> 15
is sold or otherwise disposed of in a taxable transaction. If at the time of
such sale or disposition the optionee has held the shares for the required
holding period (two years from the date the option was granted and one year from
the date of the transfer of the shares to the optionee), the optionee will
recognize long-term capital gain or loss, as the case may be, based upon the
difference between his exercise price and the net proceeds of the sale. However,
if the optionee disposes of the shares before the end of such holding period,
the optionee will recognize ordinary income on such disposition in an amount
equal to the lesser of:
(a) gain on the sale or other disposition; or
(b) the amount by which the fair market value of the shares on the date
of exercise exceeded the option exercise price, with any excess gain being
capital gain, long-term or short-term, depending on whether or not the shares
had previously been held for more than one year on the date of sale or other
taxable disposition.
The foregoing discussion and the reference to capital gain or loss
treatment therein assume that the option shares are a capital asset in the hands
of the optionee. A sale or other disposition which results in the recognition of
ordinary income to the optionee will also result in a corresponding income tax
deduction for the Company.
The 1995 Plan permits an optionee to pay all or part of the purchase
price for shares acquired pursuant to exercise of an incentive stock option by
transferring to the Company other shares of the Company's common stock owned by
the optionee. Section 422 of the Code provides that an option will continue to
be treated as an incentive stock option even if an optionee exercises such
incentive stock option with previously acquired stock of the corporation
granting the option. Accordingly, except as noted below with respect to certain
"statutory option stock," an optionee who exercises an incentive stock option in
whole or in part by transferring to the Company shares of the Company's common
stock will recognize no gain or loss upon such exercise.
Section 424(c)(3) of the Code provides that if "statutory option stock"
is transferred in connection with the exercise of an incentive stock option, and
if the holding period requirements under Section 422(a)(1) of the Code are not
met with respect to such statutory option stock before such transfer, then
ordinary income will be recognized as a result of the transfer of statutory
option stock. However, the incentive stock option stock acquired through the
exchange of statutory option stock will still qualify for favorable tax
treatment under Section 422 of the Code.
Incentive stock options offer two principal tax benefits: (1) the
possibility of converting ordinary income into capital gain to the extent of the
excess of fair market value over option price at the time of exercise, and (2)
the deferral of recognition of gain until disposition of the stock acquired upon
the exercise of the option.
The Taxpayer Relief Act of 1997 (the "1997 Tax Act") made significant
changes to individual capital gains tax rates. The 1997 Tax Act generally
reduces the maximum tax rate for gains realized by individual taxpayers from the
sale of capital assets held for more than eighteen months from 28% to 20% (18%
if the property has been held for more than five years and is acquired and sold
after the year 2000). For capital assets held for more than one year but not
more than eighteen months, the maximum tax rate remains at 28%, as it was under
prior law. In addition, taxpayers otherwise subject to the 15% rate bracket will
be entitled to a 10% maximum tax rate on long-term capital gains (18% if the
property has been held for more than five years and is sold after the year
2000). The new maximum tax rates for long-term capital gains will apply for
purposes of both the regular income tax and the alternative minimum tax.
However, the excess of the fair market value of shares acquired through the
exercise of an incentive stock option over the exercise price is taken into
account in computing an individual taxpayer's alternative minimum taxable
13
<PAGE> 16
income. Thus, the exercise of an incentive stock option could result in the
imposition of an alternative minimum tax liability.
In general, an option granted under the 1995 Plan which is designated
as an incentive stock option will be taxed as described above. However, in some
circumstances an option which is designated as an incentive stock option will be
treated as a non-qualified stock option and the holder taxed accordingly. For
example, a change in the terms of an option which gives the employee additional
benefits may be treated as the grant of a new option. Unless all the criteria
for treatment as an incentive stock option are met on the date the "new option"
is considered granted (such as the requirement that the exercise price of the
option be not less than the fair market value of the stock as of the date of the
grant), the option will be treated and taxed as a non-qualified stock option.
Non-Qualified Stock Options. All options granted or to be granted under
the 1995 Plan which do not qualify as incentive stock options are non-statutory
options not entitled to special tax treatment under Section 422 of the Code.
A participant in the 1995 Plan will recognize taxable income upon the
grant of a non-qualified stock option only if such option has a readily
ascertainable fair market value as of the date of the grant. In such a case, the
recipient will recognize taxable ordinary income in an amount equal to the
excess of the fair market value of the option as of such date over the price, if
any, paid for such option. No income would then be recognized on the exercise of
the option, and when the shares obtained through the exercise of the option are
disposed of in a taxable transaction, the resulting gain or loss would be
capital gain or loss (assuming the shares are a capital asset in the hands of
the optionee). However, under the applicable Treasury Regulations, the
non-qualified stock options issued under the 1995 Plan will not have a readily
ascertainable fair market value unless at the time such options are granted
similar options of the Company are actively traded on an established market. The
Company presently has no such actively traded options.
Upon the exercise of a non-statutory option not having a readily
ascertainable fair market value, the optionee recognizes ordinary income in an
amount equal to the excess of the fair market value of the shares on the date of
exercise over the option exercise price for those shares. The Company is not
entitled to an income tax deduction with respect to the grant of a non-statutory
stock option or the sale of stock acquired pursuant thereto. The Company
generally is permitted a deduction equal to the amount of ordinary income the
optionee is required to recognize as a result of the exercise of a non-statutory
stock option.
The 1995 Plan permits the Committee to allow an optionee to pay all or
part of the purchase price for shares acquired pursuant to an exercise of a
non-statutory option by transferring to the Company other shares of the
Company's common stock owned by the optionee. If an optionee exchanges
previously acquired common stock pursuant to the exercise of a non-qualified
stock option, the Internal Revenue Service has ruled that the optionee will not
be taxed on the unrealized appreciation of the shares surrendered in the
exchange. In other words, the optionee is not taxed on the difference between
his or her cost basis for the old shares and their fair market value on the date
of the exchange, even though the previously acquired shares are valued at the
current market price for purposes of paying all or part of the option price.
Basis and Holding Period of Shares. In most cases, the basis in shares
acquired upon the exercise of a non-qualified option will be equal to the fair
market value of the shares on the employee's income recognition date, and the
holding period for determining gains and losses on a subsequent disposition of
such shares will begin on such date. In the case of an incentive stock option,
the basis of the shares acquired on the exercise of the option will be equal to
the option's exercise price, and the holding period of the shares will begin on
the date the incentive stock option is exercised. However, if shares of
previously acquired stock are surrendered to pay the exercise price of an
incentive stock option or a non-qualified stock option, the basis and holding
period of the shares received in exchange therefor are determined differently.
The
14
<PAGE> 17
basis of the shares surrendered to pay the exercise price becomes the basis of
an equal number of new shares received upon the exercise of the option, and the
holding period of the new shares will include the holding period of the shares
surrendered to pay the exercise price (except for the purpose of meeting the
holding period required by Section 422 of the Code). The remaining shares
received upon the exercise of an incentive option will have a basis equal to any
cash paid on the exercise and any gain recognized on the disposition of
statutory option stock under Section 424(c)(3) of the Code. The remaining shares
received upon the exercise of a non-qualified option will have a basis equal to
the fair market value of such shares less any cash paid on the exercise (the
amount included in the optionee's taxable income). The holding period for such
remaining shares will begin on the date of receipt by the optionee.
General. The 1995 Plan is not qualified under Section 401(a) of the
Code and is not subject to the provisions of the Employee Retirement Income
Security Act of 1974.
THE PRECEDING DISCUSSION IS BASED UPON FEDERAL TAX LAWS AND REGULATIONS
IN EFFECT ON THE DATE OF THIS PROXY STATEMENT, WHICH ARE SUBJECT TO CHANGE, AND
UPON AN INTERPRETATION OF THE STATUTORY PROVISIONS OF THE CODE, ITS LEGISLATIVE
HISTORY AND RELATED INCOME TAX REGULATIONS. FURTHERMORE, THE FOREGOING IS ONLY A
GENERAL DISCUSSION OF THE FEDERAL INCOME TAX CONSEQUENCES OF THE 1995 PLAN AND
DOES NOT PURPORT TO BE A COMPLETE DESCRIPTION OF ALL FEDERAL INCOME TAX ASPECTS
OF THE 1995 PLAN. OPTION HOLDERS MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXES IN
CONNECTION WITH THE GRANT OR EXERCISE OF OPTIONS GRANTED UNDER THE 1995 PLAN AND
THE SALE OR OTHER DISPOSITION OF SHARES ACQUIRED UPON EXERCISE OF THE OPTIONS.
EACH EMPLOYEE RECEIVING A GRANT OF OPTIONS SHOULD CONSULT WITH HIS OR HER
PERSONAL TAX ADVISOR REGARDING FEDERAL, STATE AND LOCAL CONSEQUENCES OF
PARTICIPATING IN THE 1995 PLAN.
The approval of the holders of a majority of the shares of the
Company's common stock present and voting at the Annual Meeting is necessary to
approve the proposed amendment to the 1995 Plan. THE BOARD OF DIRECTORS
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS APPROVE THE PROPOSED AMENDMENT TO THE
1995 PLAN.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
On November 19, 1996, the Company dismissed its independent auditors,
Ernst & Young LLP, and on the same date engaged the firm of Arthur Andersen LLP
as its independent auditors for the fiscal year ending December 31, 1996. Each
of these actions was approved by the Board of Directors of the Company.
The reports of Ernst & Young LLP on the financial statements of the
Company for each of the two fiscal years ended December 31, 1994 and 1995 did
not contain an adverse opinion or a disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.
In connection with the audits of the Company's financial statements for
each of the two fiscal years ended December 31, 1995 and 1994, and in the
subsequent interim period prior to the dismissal of Ernst & Young LLP, there
were no disagreements with Ernst & Young LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to the satisfaction of Ernst &
Young LLP, would have caused it to make reference to the subject matter of the
disagreement in its report.
Ernst & Young LLP has furnished the Company with a letter addressed to
the Securities and Exchange Commission stating that it agrees with the above
statements, a copy of which has been filed as an exhibit to a Current Report on
Form 8-K dated November 19, 1996.
15
<PAGE> 18
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the independent auditors of the Company
for the fiscal year ended December 31, 1997. No auditors have yet been selected
as the independent auditors for the Company for the fiscal year ending December
31, 1998. Such selection will be made by the Board of Directors upon the
recommendation of the Audit Committee. A representative of Arthur Andersen LLP
is expected to be present at the Annual Meeting and will be available to respond
to appropriate questions from stockholders.
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Additional information concerning the Company, including financial
statements of the Company, is provided in the Company's 1997 Annual Report to
Stockholders that accompanies this proxy statement. The Company's Annual Report
on Form 10-K for the year ended December 31, 1997, as filed with the Securities
and Exchange Commission, is available to stockholders who make a written request
therefor to the Secretary of the Company, Larry J. Goddard, at the offices of
the Company, Highway 412 West, P.O. Box 188, Tontitown, Arkansas 72770. Copies
of exhibits filed with that report or referenced therein will be furnished to
stockholders of record upon request and payment of the Company's expenses in
furnishing such documents.
STOCKHOLDER PROPOSALS
Any proposal to be presented at next year's Annual Meeting of
Stockholders must be received at the principal executive offices of the Company
not later than December 29, 1998, directed to the attention of the Secretary,
for consideration for inclusion in the Company's proxy statement and form of
proxy relating to that meeting. Any such proposals must comply in all respects
with the rules and regulations of the Securities and Exchange Commission.
OTHER MATTERS
Management does not know of any matters to be brought before the
meeting other than those referred to above. If any other matter properly comes
before the meeting, the persons designated as proxies will vote on each such
matter in accordance with their best judgment.
By Order of the Board of Directors
/s/ Robert W. Weaver
Robert W. Weaver
President and Chief Executive Officer
April 27, 1998
16
<PAGE> 19
APPENDIX
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
P.A.M. TRANSPORTATION SERVICES, INC.
The undersigned stockholder(s) of P.A.M. Transportation Services, Inc., a
Delaware corporation, hereby appoints Robert W. Weaver and Larry J. Goddard, and
each of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1998 Annual Meeting of Stockholders of P.A.M. Transportation
Services, Inc. to be held on Friday, May 22, 1998 at 9:00 a.m., local time, at
the Marriott Hotel, 5402 E. Lincoln Drive, Scottsdale, Arizona 85253, and to
vote all shares of Common Stock which the undersigned would be entitled to vote
if then and there personally present, on the matters set forth below:
(1) To set the number of directors for the ensuing year at six, and to elect
six directors for a term of one year and until their successors are elected
and qualified:
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as otherwise indicated below)
</TABLE>
Robert W. Weaver; Daniel C. Sullivan; Matthew T. Moroun;
Charles F. Wilkins; Frederick P. Calderone; and Joseph J. Casaroll
If you wish to withhold authority to vote for any individual nominee(s),
write the name(s) on the line below:
- --------------------------------------------------------------------------------
(2) To approve an amendment to the 1995 Stock Option Plan of P.A.M.
Transportation Services, Inc. to increase the number of shares available
for grant thereunder from 600,000 shares to 2,600,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This proxy, when
properly executed, will be voted in accordance with directions given by the
undersigned stockholder. IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR THE ABOVE
PROPOSALS AND AS THE PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
Dated: , 1998
------------------
------------------------------
Signature
------------------------------
Signature if held jointly
(This Proxy should be marked,
dated, and signed by the
stockholder(s) exactly as his
or her name appears hereon,
and returned promptly in the
enclosed envelope. Persons
signing in a fiduciary
capacity should so indicate.
If shares are held by joint
tenants or as community
property, both should sign.)
