<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 .240.14a-11(c) or .240.14a-12
CANNON EXPRESS, INC.
(Name of Registrant as Specified in its Charter)
CANNON EXPRESS, INC.
(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)(1)
and 0-11(1).
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(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): Not Applicable
(4) Proposed maximum aggregate value of transaction: Not Applicable
(5) Total fee paid: Not applicable
[ ] 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: Not Applicable
(2) Form, Schedule or Registration Statement No.: Not Applicable
(3) Filing Party: Not Applicable
(4) Date Filed: Not Applicable <PAGE>
CANNON EXPRESS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 18, 1997
The undersigned shareholder(s) of Cannon Express, Inc. hereby appoint Dean
G. Cannon and Rose Marie Cannon, and each or either of them, the true and
lawful agents and attorneys-in-fact for the undersigned, with power of
substitution, to attend the meeting and to vote the stock owned by or
registered in the name of the undersigned, as instructed below, at the
Annual Meeting of Shareholders to be held on Tuesday, November 18, 1997 at
10:00 a.m., local time, and at any adjournments thereof, for the
transaction of the following business:
1. To fix the number of directors for the fiscal year at four and to elect
the following nominees for director of the Company:
Dean G. Cannon, Rose Marie Cannon, Uvalde R. Lindsey, Roy E. Stanley
The shareholder may withhold authority to vote for any of these nominees by
lining through or striking out the name of any such nominee.
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL
VOTE THESE SHARES FOR THE FOREGOING PROPOSALS. The proxies will vote in
their sole discretion upon such other business as may properly come before
the meeting.
Please sign, date and return this proxy as soon as possible.
Dated , 1997
Signature
Signature
Please sign exactly as name(s) appear at left. If stock is in the name of
two or more persons, each should sign. Persons signing as attorney,
executor, administrator, trustee, guardian or other fiduciary, please give
full title as such. If a corporation, then signature should be by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.<PAGE>
CANNON EXPRESS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 18, 1997
TO THE SHAREHOLDERS OF CANNON EXPRESS, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Cannon
Express, Inc., a Delaware corporation, will be held at the Springdale Room,
Holiday Inn & Northwest Arkansas Convention Center, Springdale, Arkansas on
Tuesday, November 18, 1997 at 10:00 a.m., local time, for the following
purposes:
1. To fix the number of directors for the ensuing year at four and to
elect four directors.
2. To consider and act upon such other business as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on October 23, 1997
will be entitled to vote at the Annual Meeting and any adjournments
thereof.
The Company's Proxy Statement is submitted herewith. The annual report for
the year ended June 30, 1997 is being mailed to shareholders together with
the mailing of this Notice and Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Dean G. Cannon,
President and Chairman of the Board of Directors
Springdale, Arkansas
October 24, 1997
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED FORM OF PROXY
SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN
ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH
PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT LATER OR TO VOTE YOUR SHARES
IN PERSON IN THE EVENT YOU SHOULD ATTEND THE MEETING.<PAGE>
CANNON EXPRESS, INC.
1457 Robinson
Springdale, Arkansas 72765
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 18, 1997 AND ANY ADJOURNMENTS
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy, for use only at the Annual Meeting of Shareholders to
be held at the Springdale Room, Holiday Inn & Northwest Arkansas Convention
Center, Springdale, Arkansas on Tuesday, November 18, 1997 at 10:00 a.m.,
local time, and any adjournments thereof, is solicited on behalf of the
Board of Directors of the Company. Such solicitation is being made
primarily by mail, but may also be made in person or by telephone or
telegraph by officers, directors, and regular employees of the Company.
All expenses incurred in the solicitation will be borne by the Company.
Any shareholder executing a proxy retains the right to revoke it at any
time prior to exercise at the Annual Meeting. A proxy may be revoked at
any time before it is used, upon written notice to Rose Marie Cannon,
Secretary of the Company. If not revoked, all properly executed proxies
received will be voted at the meeting in accordance with the terms of the
proxy.
This proxy material is first being mailed to shareholders on or about
October 24, 1997.
OUTSTANDING STOCK AND VOTING RIGHTS
The outstanding shares of the Company as of September 22, 1997, totaled
3,145,652 Common shares. At the meeting, each Common shareholder will be
entitled to one vote, in person or by proxy, for each share of Stock owned
of record at the close of business on October 23, 1997. The stock transfer
books of the Company will not be closed.
The enclosed form of proxy provides a method for shareholders to withhold
authority to vote for any one or more of the nominees for the Board of
Directors while still granting authority to the proxy to vote for the
remaining nominees. The names of all nominees are listed on the proxy
card. If you wish to grant the proxy authority to vote for all nominees,
check the box marked "FOR" which appears above the list of nominees. If
you wish to withhold authority to vote for all nominees, check the box
marked "ABSTAIN," also located above the list of nominees. If you wish
your shares to be voted for some nominees and not for one or more of the
others, indicate the name(s) of the nominee(s) for whom you are withholding
authority by drawing a line through such name(s).
Shareholders are not entitled to cumulative voting with respect to the
election of directors.
As noted above, the enclosed form of proxy provides a method for
shareholders to withhold authority to vote for a director and thereby
abstain from voting. If you check the box marked "ABSTAIN", shares will be
voted neither for nor against a director but will be counted for quorum
purposes. Additionally, "broker non-votes" are not relevant to the
determination of a quorum or for determining whether the proposal to elect
directors has been approved. While there may be instances in which a
shareholder will wish to abstain, the Board of Directors encourages all<PAGE>
shareholders to vote their shares in their best judgment and to participate
in the voting process to the fullest extent possible.
ELECTION OF DIRECTORS; SECURITY OWNERSHIP OF MANAGEMENT
Directors are to be elected to hold office until the next annual meeting of
shareholders or until their successors are duly elected and qualified. The
Board of Directors of the Company has recommended to the Company's
shareholders that the number of Directors which shall be authorized to
manage the affairs of the Company for the ensuing year shall be four and
that the nominees listed below be elected as directors at the Annual
Meeting. Assuming a quorum is present in person or by proxy at the annual
meeting, each nominee must receive the affirmative vote of a majority of
the shares of the Company's Common Stock, $.01 par value, which are present
by proxy or in person at the Annual Meeting.
The following table sets forth the name, age, term of office as director of
the Company, and ownership of the Company's Common Stock with respect to
each nominee for election to the Board of Directors, the named directors,
the named executive officers, and of the directors and executive officers
of the Company as a group. Each of the nominees listed below served as
members of the Board of Directors during the last fiscal year.
Year First Common
Elected Shares
Nominees and Officers Age Director Owned Percentage(2)
Dean G. Cannon(1) 56 1986 1,959,216 62%
Rose Marie Cannon(1) 56 1986 1,959,216 62%
Alice L. Walton(3) 48 1996 283,289 9%
Uvalde R. Lindsey 57 1992 * *
Roy E. Stanley 53 1987 19,790 1%
Larry L. Patrick(3) 52 N/A 39,857 1%
All current directors, nominated directors
and executive officers (7 persons) 2,360,048 75%
(1)See "Principal Shareholders"
(2)Percentage based upon 3,145,652 shares of Common Stock outstanding as
of September 22, 1997.
(3)Not a nominee for director.
* Denotes ownership of less than 1% of the total outstanding shares of
common stock.
Business Experience. The following is a brief summary of the business
experience of each of the nominees for director of the Company for at
least the past five years:
Dean G. Cannon has served as President and a Director of the Company since
its inception in 1981.
Rose Marie Cannon has served as Secretary, Treasurer and a Director of the
Company since its inception in 1981.
Uvalde R. Lindsey is an economic development consultant and Director of the
Northwest Arkansas Council, a regional organization dedicated to the<PAGE>
economic enhancement of Northwest Arkansas. After graduating from the
University of Arkansas, Mr. Lindsey owned and operated a chain of
automotive parts stores in Arkansas, Missouri and Oklahoma. After selling
his businesses in 1983, Lindsey served as Budget Officer to the Governor of
the State of Arkansas and as Executive Director of the Northwest Arkansas
Economic Development District.
Roy E. Stanley holds Bachelor of Science and Master of Arts degrees from
Memphis State University and received the degree of Juris Doctor, with
honors, in 1978 from the University of Arkansas School of Law at
Fayetteville. After engaging in the private practice of law in Springdale,
Arkansas for sixteen years, in 1994 Mr. Stanley became president of Lindsey
Management Company, Inc., a real estate management company with its
principal offices in Fayetteville, Arkansas.
Rose Marie Cannon is the wife of Dean G. Cannon. Except for the foregoing,
no family relationships exist among any of the persons named above.
The Board of Directors has no reason to believe that any nominee will be
unable or unwilling to accept nomination or to serve if elected. However,
should any nominee become unable or unwilling to accept nomination or to
serve if elected, all proxies will be voted for the election of a qualified
substitute nominated by the Board of Directors.
Committees
The Company presently does not have standing nominating committees. The
Board of Directors nominates persons for director. The Board will consider
suggestions by shareholders for names of nominees to the Board of Directors
for the fiscal year ending June 30, 1999, provided that such suggestions
are made in writing and delivered to Rose Marie Cannon, Secretary of the
Company, on or before June 30, 1998.
The Company has an audit committee which is presently composed of Dean G.
Cannon, Roy E. Stanley and Uvalde Lindsey. The Audit Committee recommends
candidates to serve as the Company's auditors, reviews the reports of the
Company's auditors, and has the authority to investigate the financial and
business affairs of the Company.
The Company has a compensation committee which is presently composed of
Uvalde R. Lindsey and Roy E. Stanley. The compensation committee makes
recommendations to the Board of Directors regarding compensation for the
President and Secretary/Treasurer of the Company.
During the past fiscal year, the Board of Directors met on three occasions,
the Audit Committee met once, and the Compensation Committee met once.<PAGE>
PRINCIPAL SHAREHOLDERS
As of October 17, 1997, the only shareholders known to the Company to own,
directly or indirectly, more than 5% of the Company's Common Stock are
reflected in the following table:
Number of Shares Percent of
Beneficially Outstanding
Name and Address Owned Shares (3)
Dean G. Cannon 1,959,216(1) 62%
1457 Robinson
Springdale, Arkansas 72764
Rose Marie Cannon 1,959,216(2) 62%
1457 Robinson
Springdale, Arkansas 72764
Alice L. Walton 283,289 9%
One McIlroy Plaza, Suite 302
Fayetteville, Arkansas 72701
(1) Includes 343,150 shares owned of record by Rose Marie Cannon, his
wife, and 1,248,086 shares held jointly by Dean and Rose Marie Cannon.
Also includes presently exercisable options to purchase 12,415 shares.
(2) Includes 343,150 shares owned of record by Dean G. Cannon, her
husband, and 1,248,086 shares held jointly by Rose Marie and Dean G.
Cannon. Also includes presently exercisable options to purchase 12,415
shares.
(3) Percentage based upon 3,145,652 shares of the Company's Class A Common
Stock outstanding as of September 22, 1997.<PAGE>
EXECUTIVE COMPENSATION
The following table is set forth with respect to all cash compensation paid
or to be paid by the Company as well as certain other compensation paid to
the Chief Executive Officer and other executive officers whose total
remuneration exceeded $100,000 during fiscal 1997.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Other Under-
Annual Restricted Lying All Other
Name and Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Dean G. Cannon 1997 202,617(1) 240,000 -0- -0- -0-/-0- -0- -0-
President,
Chairman of 1996 227,204(1) 240,000 -0- -0- -0-/-0- -0- -0-
the Board 1995 206,355(1) 240,000 -0- -0- -0-/-0- -0- -0-
Larry L. Patrick 1997 163,045 -0- -0- -0- -0-/-0- -0- -0-
Vice-president 1996 160,954 -0- -0- -0- -0-/-0- -0- -0-
1995 158,173 -0- -0- -0- -0-/-0- -0- -0-
(1) Amounts shown include cash and non-cash compensation earned and
received
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Value of Unexercised
Number Unexercised Options In-the-Money Options
Shares at June 30, 1997 at June 30, 1997
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Dean G. Cannon -0- -0- 24,830 /-0-(1) $132,025/$-0-(3)
Larry L. Patrick -0- -0- 37,243 /-0-(2) $ 20,325/$-0-(3)
(1) Represent options to purchase 12,415 Common shares granted to Dean G.
Cannon and 12,415 Common shares granted to Rose Marie Cannon under the
Company's Incentive Stock Option Plan.
(2) Represent options to purchase 37,243 Common shares granted under the
Company's Incentive Stock Option Plan.
(3) Market value of the Company's Common Stock at 06/30/97 was $6.50 per
share. Value of unexercised options was calculated based upon the
difference between the foregoing market values and the exercise price
of the options.
Each non-officer director was paid a total of $200 for each meeting of the
Board or its committees which he attended. Directors do not receive annual
fees for attendance at meetings.<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The members of the
compensation Committee are Uvalde R. Lindsey and Roy E. Stanley, both non-
employee directors of the company. All decisions by the Compensation
Committee relating to compensation of the Company's executive officers are
reviewed by the full board, except for decisions regarding awards under the
Company's Incentive Stock Option Plan (the "Plan" ), which must be made
solely by the Committee in order for the grants to satisfy Exchange Act
Rule 16b-3.
Compensation Policies
The overall compensation policy of the Company is to maximize shareholder
return by combining annual and long-term compensation to executives. The
Committee seeks to provide annual compensation which motivates executives
by recognizing and rewarding individual initiative and achievement. Long-
term compensation to executives is based on stock ownership by management.
Compensation Elements
The following alternatives were available to the Committee as compensation
elements during fiscal 1997: base salary, annual cash bonuses for fiscal
1997, and stock options granted under the Company's Plan. Compensation
paid during fiscal 1997 reflected the Committee's emphasis of determining
pay on an individualized basis.
Base Salary. Executive's base salaries are initially determined with
reference to comparable base salaries of others in the Company's industry.
Subjective measures of performance include a review of each executive's
past and anticipated level of performance. The Committee does not attempt
to relate executive salaries to objective performance-related criteria.
Cash Bonuses. The Compensation Committee determines on an annual basis
whether to award cash bonuses to executives. While no general bonus
program existed during fiscal 1997, the Compensation Committee may elect to
award bonuses to reward individual contributions. Bonuses are awarded by
the Compensation Committee based on subjective criteria, such as a review
of the executive's past and anticipated performance. The Committee does
not attempt to relate bonuses to objective performance-related criteria.
Stock Options. The Company's long-term incentive program is based on the
Company's Plan, which was approved by shareholders in 1986. Upon selection
by the Compensation Committee, the company's key employees are eligible to
participate in the Plan. In determining whether to grant options, the
Committee reviews the options previously granted and exercised under the
Plan, the Company's performance as determined in the market price of its
stock, individual performance and potential contribution to the Company and
the perceived need of providing additional long-term incentive to key
executives. Based on these criteria, no options to acquire shares of the
Company's Common Stock were granted to executive officers during fiscal
1997.<PAGE>
CEO Compensation
The compensation Committee's general approach in setting Mr. Cannon's
target annual compensation is to seek to be competitive with other
companies of a similar size in the Company's industry, to recognize and
reward initiative, overall corporate performance and managerial ability,
and to provide long-term incentive to increase shareholder value. In
setting Mr. Cannon's cash compensation, the Committee reviewed the
compensation of Chief Executive Officers of other companies in the
industry. The Committee targeted Mr. Cannon's cash compensation to fall
within the range of such amounts. The Committee also considered corporate
earnings based on Mr. Cannon's efforts during fiscal 1997. Based on these
factors, the Compensation Committee determined that a $240,000 bonus was
appropriate to bring Mr. Cannon's aggregate compensation in line with that
of CEOs of similarly sized and similarly profitable companies in the
industry. The Committee believes that Mr. Cannon's aggregate cash
compensation is comparable with or below the external marketplace.
COMPENSATION COMMITTEE
Uvalde R. Lindsey
Roy E. Stanley
Compensation Committee Interlocks and Insider Participation
There exist no interlocking relationships on the Compensation Committee
CERTAIN RELATED TRANSACTIONS
The Company leases its offices from Dean G. Cannon and Rose Marie Cannon
pursuant to a written lease entered into and effective as of September 1,
1986. The lease provides for monthly payments of $3,000, cancelable by the
Company on 30 days' notice and is on terms no less favorable to the Company
as could be obtained from an independent third party.
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission reports of ownership and changes in ownership of common
stock and other equity securities of the Company. Officers, directors and
greater than 10% shareholders 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 reports furnished to the
Company, or written representations from certain reporting persons, the
Company believes that, during the 1997 fiscal year, all filing requirements
were complied with as they apply to its officers, directors and greater
than 10% beneficial owners, with the exception of Mr. Roy Stanley, who
failed to timely file one report covering an option grant transaction which
occurred in March, 1997.<PAGE>
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return to
the Company's shareholders during the six-year period ended June 30, 1997,
as well as an overall stock market index (NASDAQ Market Index) and a
published industry index (NASDAQ Transportation Index).
6-92 6-93 6-94 6-95 6-96 6-97
Cannon Express 100 98 243 270 212 168
NASDAQ Trans Index 100 123 126 141 156 179
NASDAQ Market Index 100 126 127 169 218 265
The stock performance graph assumes $100 was invested on July 1, 1992 and
that all dividends were reinvested. 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
nor endorse any predictions as to future stock performance.
AUDITORS TO BE PRESENT
The Board of Directors has selected Baird, Kurtz & Dobson to serve as the
independent auditors of the Company for the current fiscal year. A
representative of Baird, Kurtz & Dobson is expected to be in attendance at
the Annual Meeting and will be afforded the opportunity to make a
statement. The representative will also be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at the 1998 Annual Meeting should
be directed to Mr. Dean G. Cannon, Chairman of the Company's Board of
Directors, and must be received by the Company on or before May 30, 1998.
Any such proposal must comply with the requirements of Rule 14a-8 of the
Securities Exchange Act of 1934.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made personally, by written communications, telephone or telegraph,
and may be made by directors, officers, and regular employees of the
Company who will not receive any additional compensation, except
reimbursement of actual expenses, in connection with such solicitation.
ADDITIONAL INFORMATION AVAILABLE
Upon written request, the Company will furnish, without charge, a copy of
the Company's Annual Report on Form 10-K for the fiscal year ending June
30, 1997, as filed with the United States Securities and Exchange
Commission, including the financial statements and schedules thereto. The
written request should be sent to Mr. Dean G. Cannon, Chairman of the
Company's Board of Directors, 1457 Robinson, P.O. Box 364, Springdale,
Arkansas 72765.<PAGE>
OTHER MATTERS
So far as is now known, there is no business other than that described
above to be presented to the shareholders for action at the meeting.
Should other business come before the meeting, votes may be cast pursuant
to proxies in respect to any such business in the best judgment of the
persons acting under the proxies.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
Dean G. Cannon, Chairman
October 24, 1997<PAGE>
