SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and Exchange Act
of 1934
Filed by Registrant
Filed by a Party other than the Registrant
Check the Appropriate Box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Materials Pursuant to p 240.14a-11c or p 240.14a-12
HEARTLAND EXPRESS, INC.
(Name of Registrant as Specified in its Charter)
The Heartland Express, Inc. Board of Directors
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the Appropriate Box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Price per unit or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid N/A
( ) Fee paid previously with preliminary materials: N/A
( ) 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
HEARTLAND EXPRESS, INC.
2777 Heartland Drive
Coralville, Iowa 52241
NOTICE AND PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1998
Dear Fellow Stockholders:
The 1998 Annual Meeting of Stockholders (the "Annual Meeting") of
Heartland Express, Inc., a Nevada Corporation (the "Company"), will be held
at the Highlander Inn, 2525 North Dodge Street, Iowa City, Iowa, at 8:00 a.m.
local time, on Wednesday, May 6, 1998 for the following purposes:
1. To consider and act upon a proposal to elect four (4) directors
of the Company;
2. To consider and act upon a proposal to ratify the selection of
Arthur Andersen LLP as independent public accountants for the
Company for 1998; and
3. To consider and act upon such other matters as may properly
come before the meeting and any adjournment thereof.
The foregoing matters are more fully described in the accompanying
Proxy Statement.
The Board of Directors has fixed the close of business on
March 13, 1998, as the record date for the determination of Stockholders
entitled to receive notice of and to vote at the Annual Meeting or any
adjournment thereof. Shares of common stock may be voted at the Annual
Meeting only if the holder is present at the Annual Meeting in person or by
valid proxy. YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE
ANNUAL MEETING, YOU ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. Returning your proxy now will
not interfere with your right to attend the Annual Meeting or to vote your
shares personally at the Annual Meeting, if you wish to do so. The prompt
return of your proxy may save the Company additional expenses of
solicitation.
All Stockholders are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
Russell A. Gerdin
Chairman of the Board,
President and Secretary
Coralville, Iowa 52241
April 6, 1998
<PAGE>
HEARTLAND EXPRESS, INC.
2777 Heartland Drive
Coralville, Iowa 52241
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Heartland Express, Inc., a Nevada
corporation (the "Company"), to be used at the 1998 Annual Meeting of
Stockholders of the Company (the "Annual Meeting"), which will be held at the
Highlander Inn, 2525 North Dodge Street, Iowa City, Iowa 52240, on Wednesday,
May 6, 1998, at 8:00 a.m. local time, and any adjournment thereof. All costs
of the solicitation will be borne by the Company. The Company does not
intend to solicit proxies other than by this mailing; provided, that
directors, officers, and employees may solicit proxies by use of the mails or
telephone without compensation other than their regular compensation. The
approximate date of mailing this proxy statement and the enclosed form of
proxy is April 6, 1998.
The enclosed copy of the Company's annual report for the fiscal year
ended December 31, 1997, is not incorporated into this Proxy Statement and is
not to be deemed a part of the proxy solicitation material.
PROXIES AND VOTING
Only stockholders of record at the close of business on March 13, 1998
("Stockholders") are entitled to vote, either in person or by valid proxy, at
the Annual Meeting. On the record date of March 13, 1998, the Company had
30,000,000 shares of $0.01 par value common stock issued and outstanding.
Each share is entitled to one vote. The Company has no other class of stock
outstanding. Stockholders are not entitled to cumulative voting in the
election of directors.
All proxies that are properly executed and received by the Company
prior to the Annual Meeting will be voted in accordance with the choices
indicated. Any Stockholder may be represented and may vote at the Annual
Meeting by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two (2) or more
persons to act as proxies, a majority of such persons present at the meeting
shall have and may exercise, or, if only one shall be present, then that one
shall have and may exercise, all of the powers conferred by such written
instrument upon all of the persons so designated unless the instrument shall
otherwise provide. No such proxy shall be valid after the expiration of six
(6) months from the date of its execution, unless coupled with an interest or
unless the person executing it specifies therein the length of time for which
it is to continue in force, which in no case shall exceed seven (7) years
from the date of its execution. Any Stockholder giving a proxy may revoke it
at any time prior to its use at the Annual Meeting by filing with the
Secretary of the Company a revocation of the proxy, by delivering to the
Company a duly executed proxy bearing a later date, or by attending the
meeting and voting in person.
Other than the election of directors, which requires a plurality of
the votes cast, each matter to be submitted to the Stockholders 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, proxies cast "For" or "Against" are included. If no direction is
given to the proxy holder, the proxy will be voted "For" the proposals as
specified in this proxy statement, and, at the discretion of the proxy
holder, upon such other matters as may properly come before the meeting or
any adjournment thereof. Proxies marked "Abstain"
<PAGE>
and broker non-votes are counted only for purposes of determining whether a
quorum is present at the meeting.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, the Stockholders will elect four (4) directors
to serve as the Board of Directors until the 1999 Annual Meeting of
Stockholders or until their successors are duly elected and qualified. The
Board may increase the size of the Board of Directors in the future and add
one or more members if desirable candidates are found. Absent contrary
instructions, each proxy will be voted for Russell A. Gerdin, Richard O.
Jacobson, Dr. Benjamin J. Allen, and Michael J. Gerdin, all of whom are
standing for re-election. In the event one or more of the individuals listed
below shall unexpectedly become unavailable to serve, which the Board of
Directors has no reason to expect, the proxies that would have otherwise been
voted for such individuals will be voted for a substitute nominee selected by
the Board.
Information Concerning Executive Officers and Directors
Information concerning the names, ages, positions with the Company,
tenure as a director, and business experience of the Company's current
directors and executive officers is set forth below. All references to
experience with the Company include positions with the Company's operating
subsidiary, Heartland Express, Inc. of Iowa.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME AGE POSITION DIRECTOR SINCE
Russell A. Gerdin 56 Chairman of the Board, President, Secretary 1978
John P. Cosaert 50 Executive Vice President of Finance, Treasurer N/A
Richard L. Meehan 52 Executive Vice President of Marketing N/A
Richard O. Jacobson1 61 Director 1994
Dr. Benjamin J. Allen1 51 Director 1995
Michael J. Gerdin 28 Director 1996
</TABLE>
1Member of the Audit Committee.
Russell A. Gerdin has served as the Company's President since 1978 and
as Chairman of the Board since 1986.
John P. Cosaert has served as the Company's Vice President of Finance
and Treasurer from 1986 to April 1996. In April 1996 he was named Executive
Vice President.
Richard L. Meehan has served as the Company's Vice President of
Marketing from 1986 to April 1996. In April 1996 he was named Executive Vice
President.
Richard O. Jacobson has served as a director since 1994. Mr. Jacobson
has been President and Chief Executive Officer of Jacobson Warehouse
Company, Inc. and Jacobson Transportation Company, Inc., Des Moines, Iowa
since 1968. Mr. Jacobson also serves as a director for Atrion Corporation,
Allied Group, Inc., Firstar Bank of Des Moines, Firstar Banks of Iowa, and
Felcor Suite Hotels, Inc.
<PAGE>
Dr. Benjamin J. Allen has served as a director since 1995. He is the
Dean and Distinguished Professor of Business at Iowa State University in
Ames, Iowa, and has served in this capacity since 1994. Dr. Allen previously
served and still does serve as Professor for the Department of Transportation
and Logistics and Department of Economics at Iowa State University since
1991. Dr. Allen also served in the Office of Transportation Regulatory
Policy of the U.S. Department of Transportation as a Brookings Institute
Economics Policy Fellow.
Michael J. Gerdin has served as a director since 1996. Mr. Gerdin is
currently coordinating the operations departments of Heartland Express and A
& M Express and has served in this capacity since July 1997. From 1992 until
such time, Mr. Gerdin held a variety of positions within the Company,
including positions in the dispatch, sales, safety, and driver recruiting
departments. Mr. Gerdin was responsible for the relocation of the former
Munson Transportation administrative functions to Heartland's headquarters in
1994. Prior to 1992 Mr. Gerdin was a full-time student obtaining his degree
in Business Administration from Luther College.
Board of Directors and Committee Meetings
The Board of Directors met three times during the last fiscal year,
and all directors were present at each meeting. The 1997 Audit Committee
consisted of Richard O. Jacobson (Chairman), and Dr. Benjamin J. Allen. The
Audit Committee met three times during 1997, and both members were in
attendance. The Audit Committee makes recommendations to the Board
concerning the selection of outside auditors, reviews the Company's financial
statements, reviews and discusses audit plans, audit work, internal controls,
and the report and recommendations of the Company's independent auditors, and
considers such other matters in relation to the external audit of the
financial affairs of the Company as may be necessary or appropriate in order
to facilitate accurate and timely financial reporting. At least a majority
of the Audit Committee members will not be employees of the Company. The
Board does not have a compensation or nominating committee or any committee
performing similar functions.
Directors' Fees
Directors who are not employees of the Company are paid $1,000 for
attendance at each Board of Directors or committee meeting attended (if the
committee meeting is held on a day other than the day of a Board meeting),
and are reimbursed for expenses incurred in attending such meetings.
Board of Directors Interlocks and Insider Participation / Certain
Transactions and Relationships
The 1997 Board of Directors consisted of Russell A. Gerdin, Richard O.
Jacobson, Michael J. Gerdin, and Dr. Benjamin J. Allen, all of whom
participated in deliberations concerning executive officer compensation. No
other individuals participated in such deliberations. During 1997, Mr.
Gerdin served as the President and Secretary of the Company. The Board of
Directors establishes the compensation of Mr. Gerdin and reviews compensation
set by Mr. Gerdin for other executive officers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE NOMINEES FOR DIRECTOR PRESENTED IN PROPOSAL 1.
In 1997, the Company leased two office buildings, totaling
approximately 25,000 square feet, a storage building of approximately 3,500
square feet, and five acres of land from Mr. Gerdin for $282,000 plus taxes,
<PAGE>
utilities, insurance and maintenance. The lease expires on May 31, 2000, but
is renewable for an additional five year term with a cost of living
adjustment.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation paid by the Company to its chief executive officer,
who was the only executive officer who was paid more than $100,000 in salary
and bonus during the most recent fiscal year (the "Named Officer"), for
services in all capacities for the fiscal years ended December 31, 1997,
1996, and 1995.
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
Name And Principal Restricted
Position Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award(s) SARs Payouts Compen.
Year ($) ($) ($)1 ($) ($) ($) ($)
Russell A. Gerdin,
Chairman and 1997 300,000 - - - - - -
President 1996 300,000 - - - - - -
(Chief Executive
Officer) 1995 300,000 - - - - - -
1 Other annual compensation did not exceed 10% of Mr. Gerdin's total
salary for any reported year.
Board of Directors Report on Executive Compensation
The members of the Board of Directors prepared the following report on
executive compensation:
The Board of Directors reviews the compensation of the Company's
executive officers annually. The compensation of Mr. Gerdin, the Company's
chief executive officer, is evaluated differently than that of the other
executive officers. A summary of the considerations for each is set forth
below.
Chief Executive Officer. Mr. Gerdin receives a base salary only, with
no bonus or short or long-term incentives. The Board of Directors recognizes
Mr. Gerdin's substantial responsibility and contribution to the Company's
operating performance, operating margin, revenue and net income growth rates,
and attainment of Company goals, as well as his large stockholdings. At Mr.
Gerdin's request, his salary has remained the same since 1986, and he has
never been paid a bonus. The Board believes that Mr. Gerdin's salary is
reasonable compared to similarly situated executives, and that as a holder of
approximately 42% of the Company's outstanding stock, Mr. Gerdin receives an
incentive through appreciation in the value of the Company's stock. Because
of Mr. Gerdin's request, the Board of Directors has not considered or
approved an increase in annual compensation or any incentive compensation for
Mr. Gerdin. Thus, corporate performance directly affects Mr. Gerdin, but not
through his compensation by the Company.
Other Executive Officers. The Company's other executive officers are
compensated through a mix of salary and incentive compensation. In
establishing compensation, the Board of Directors annually considers (i) the
Company's operating performance, stock performance, operating margin, and
revenue and net income growth rates, (ii) team-building skills, individual
performance, past performance and potential with the Company, (iii) local
compensation levels and cost of living, and (iv) compensation information
disclosed by similar publicly-held truckload motor carriers. Salary and
bonus levels are largely subjective, with individual performance being the
most important factor. Compensation levels at other publicly-traded
<PAGE>
truckload motor carriers are used as a general guide, and the Board believes
that the compensation of its executive officers as a group, historically and
during the last fiscal year, has been comparable to that of other carriers.
The Board believes that providing an incentive for its executive
officers to maximize profitability is important. In 1993, the Company's
subsidiary, Heartland Express, Inc. of Iowa, adopted a non-qualified deferred
compensation plan for key management employees designated by the Board of
Directors of the subsidiary for a given year. The total contingent benefit
available for all participants is a percentage of the Company's previous
year's net profits equal to one-fourth of one percent of such profits for
each percentage point (or a fraction thereof) by which the Company's
operating ratio was less than a specified target. The operating ratio
represents the percentage which operating expenses bear to operating
revenues. The benefits vest in increments up to age 65, payment is deferred
until cessation of employment, and all payments are subject to certain
vesting and forfeiture provisions. The chief executive officer does not
participate in the deferred compensation arrangement. The aggregate amount
contributed to the plan on behalf of four participants for 1997 was $140,000.
Under the deferred compensation plan, there is a direct relationship between
the Company's operating efficiency and the deferred amount allocable to the
executive officers. The Board of Directors determines the portion of the
annual total deferred compensation pool to allocate to individual executive
officers based upon a subjective evaluation of the job performance of each
individual executive officer.
Board of Directors
Russell A. Gerdin Benjamin J. Allen
Richard O. Jacobson Michael J. Gerdin
Tuition Award Program
The Company maintains a tuition award program for the children of
certain employees, including executive officers. Contributions to the
program are based upon the Company's performance. During 1997, the Company
contributed $229,000 to the program, based upon 1996 performance. The
Company will contribute $246,000 in 1998 based upon 1997 performance. The
amount paid to children of the Company's executive officers was $14,848 in
1996 and $13,549 in 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors, and greater than 10%
stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon a review of
the copies of such forms furnished to the Company, or written representations
that no Forms 5 were required, the Company believes that its officers,
directors and greater than 10% beneficial owners complied with all Section
16(a) filing requirements applicable to them during the Company's preceding
fiscal year.
<PAGE>
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following table sets forth, as of March 13, 1998, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
person known by the Company to beneficially own more than 5% of such stock,
by each director and Named Officer of the Company, and by all directors and
executive officers of the Company as a group.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Title of Class Name and Address of Beneficial Owner Amount & Nature %
of Beneficial of
Ownership Class(1)
Common Stock Russell A. Gerdin, President,
Secretary, and Director
2777 Heartland Drive,
Coralville, IA 52241 12,694,990 (2)42.3%
Common Stock, Richard O. Jacobson, Director
P.O. Box 224
Des Moines, IA 50301 36,000 (3) *
Common Stock Benjamin J. Allen, Director
2720 Thompson Drive
Ames, IA 50010 0 *
Common Stock Michael J. Gerdin, Director
2777 Heartland Drive
Coralville, IA 52241 0 *
Common Stock Nicholas Company, Inc. (Albert O. Nicholas)
700 N. Water Street
Milwaukee, WI 53202 2,717,270 9.1%
Common Stock All directors and executive officers
as a group ( 6 individuals) 12,740,949 42.5%
*Less than one percent (1%).
1 Based upon 30,000,000 outstanding shares at March 13, 1998.
2 Mr. Gerdin owns 12,049,571 shares directly. An additional 645,119
shares are held of record by a voting trust, the voting trust certificates of
which are owned by Gerdin Family Investments, L.P. Mr. Gerdin is the general
partner of the limited partnership and has dispositive power over the voting
trust certificates and stock. Mr. Gerdin is not the voting trustee and does
not have the power to vote the shares in the voting trust.
3 All shares are owned by the Richard O. Jacobson Foundation, a private
foundation established by Mr. Jacobson. Mr. Jacobson has voting and
dispositive power over the shares, but neither he nor any of his family
members may receive distribution from the foundations assets. Accordingly,
beneficial ownership is disclaimed.
<PAGE>
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR HEARTLAND EXPRESS
The following graph compares the cumulative total stockholder return
of the Company's Common Stock with the cumulative total stockholder return
of the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Trucking and
Transportation Stocks commencing December 31, 1992 and ending December 31,
1997.
Graph Area
Legend
Symbol Index Descrip. 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/29/97
- ------ -------------- -------- -------- -------- -------- -------- --------
__ Heartland Express 100.0 89.7 108.7 110.2 204.0 224.9
- -- CRSP Index for 100.0 114.8 112.2 158.7 195.2 239.5
Nasdaq Stock Market
(U.S. Companies)
.. CRSP Index for 100.0 121.5 110.2 128.5 141.8 181.7
Nasdaq Trucking
And Transportation
Stocks
The stock performance graph assumes $100 was invested on January 1,
1993. There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the
graph above. The Company will not make or endorse and predictions as to
future stock performance. The CRSP Index for NASDAQ Trucking and
Transportation Stocks includes all publicly held truckload motor carriers
traded on the NASDAQ Stock Market, as well as all NASDAQ companies within the
Standard Industrial Code Classifications 3700-3799, 4200-4299, 4400-4599, and
4700-4799. The Company will provide the names of all companies in such index
on request.
<PAGE>
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as independent
public accountants for the Company for the 1998 fiscal year. Arthur Andersen
LLP has served as independent public accountants for the Company since the
1994 fiscal year. Representatives of Arthur Andersen LLP are expected to be
present at the annual meeting with an opportunity to make a statement. If
they desire to do so, and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" PROPOSAL 2 TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1999 Annual
Meeting of the Stockholders of the Company must be received by the Corporate
Secretary of the Company at the Company's principal executive offices on or
before December 7, 1998, to be included in the Company's proxy material
related to that meeting.
OTHER MATTERS
The Board of Directors does not intend to present at the annual meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties.
HEARTLAND EXPRESS, INC.
Russell A. Gerdin
Chairman of the Board
President and Secretary
April 6, 1998
<PAGE>
