<PAGE> 1
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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
LANDSTAR SYSTEM, 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
LOGO(R)
LANDSTAR SYSTEM, INC.
1000 BRIDGEPORT AVENUE
SHELTON, CT 06484
March 18, 1997
To the Shareholders of Landstar System, Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Landstar System, Inc. on Thursday, April 17, 1997, at 10:00 a.m., local time, at
the Trumbull Marriott, 180 Hawley Lane, Trumbull, Connecticut 06611. A notice of
the meeting, a proxy card, the 1996 Annual Report and a proxy statement
containing information about the matters to be acted upon are enclosed. It is
important that your shares be represented at the meeting. Accordingly, we urge
you to sign and date the enclosed proxy card and promptly return it in the
enclosed pre-addressed, postage-paid envelope even if you are planning to attend
the meeting.
We look forward to the Annual Meeting of Shareholders, and we hope you will
attend the meeting or be represented by proxy.
LOGO
Jeffrey C. Crowe
Chairman of the Board,
President and
Chief Executive Officer
<PAGE> 3
LOGO(R)
LANDSTAR SYSTEM, INC.
1000 BRIDGEPORT AVENUE
SHELTON, CONNECTICUT 06484
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 1997
Notice is hereby given that the 1997 Annual Meeting of Shareholders of
Landstar System, Inc., a Delaware corporation (the "Company"), will be held at
the Trumbull Marriott, 180 Hawley Lane, Trumbull, Connecticut 06611, on
Thursday, April 17, 1997, at 10:00 a.m., local time, for the following purposes:
(1) To elect two Class I directors for terms to expire at the 2000 Annual
Meeting of Shareholders;
(2) To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for fiscal year 1997; and
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on March 7, 1997 will
be entitled to notice of and to vote at the meeting. A list of shareholders
eligible to vote at the meeting will be available for inspection at the meeting
at the Trumbull Marriott at the address set forth above and during business
hours from April 7, 1997 to the date of the meeting at the Company's corporate
headquarters at the address set forth above.
All shareholders are cordially invited to attend the meeting in person.
Whether you expect to attend the Annual Meeting or not, your proxy vote is very
important. TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES OR CANADA.
By Order of the Board of Directors
LOGO
MICHAEL L. HARVEY
Vice President,
General Counsel,
and Secretary
Shelton, Connecticut
March 18, 1997
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED
AND RETURNED PROMPTLY
================================================================================
<PAGE> 4
LANDSTAR SYSTEM, INC.
PROXY STATEMENT
March 18, 1997
INTRODUCTION
This Proxy Statement is furnished to the shareholders of Landstar System,
Inc. (the "Company") in connection with the solicitation of proxies on behalf of
the Board of Directors of the Company (the "Board") to be voted at the Annual
Meeting of Shareholders to be held on Thursday, April 17, 1997 (the "1997 Annual
Meeting"). The 1996 Annual Report to Shareholders (which does not form a part of
the proxy solicitation material), including the financial statements of the
Company for fiscal year 1996, is enclosed herewith. The mailing address of the
principal executive offices of the Company is 1000 Bridgeport Avenue, Shelton,
Connecticut 06484. This Proxy Statement, accompanying form of proxy, Notice of
Meeting and 1996 Annual Report are being mailed to the shareholders of the
Company on or about March 18, 1997.
RECORD DATE
The Board has fixed the close of business on March 7, 1997 as the record
date for the 1997 Annual Meeting. Only shareholders of record on that date will
be entitled to vote at the meeting in person or by proxy.
PROXIES
Shares cannot be voted at the meeting unless the owner thereof is present
in person or by proxy. The proxies named on the enclosed proxy card were
appointed by the Board to vote the shares represented by the proxy card. If a
shareholder does not return a signed proxy card, his or her shares cannot be
voted by proxy. Shareholders are urged to mark the boxes on the proxy card to
show how their shares are to be voted. All properly executed and unrevoked
proxies in the accompanying form that are received in time for the meeting will
be voted at the meeting or any adjournment thereof in accordance with any
specification thereon, or if no specification is made, will be voted "FOR" the
election of the named nominees and ratification of KPMG Peat Marwick LLP as
independent auditors for the Company as set forth in the Notice of 1997 Annual
Meeting. The proxy card also confers discretionary authority on the proxies to
vote on any other matter not presently known to management that may properly
come before the meeting.
Any proxy delivered pursuant to this solicitation is revocable at the
option of the person(s) executing the same (i) upon receipt by the Company
before the proxy is voted of a duly executed proxy bearing a later date, (ii) by
written notice of revocation to the Secretary of the Company received before the
proxy is voted, or (iii) by such person(s) voting in person at the 1997 Annual
Meeting.
The Board has selected ChaseMellon Shareholder Services, L.L.C. as
Inspectors of Election pursuant to the Company's Bylaws, as amended. The
Inspectors shall ascertain the number of shares outstanding, determine the
number of shares represented at the 1997 Annual Meeting by proxy or in person
and count all votes and ballots. Each shareholder shall be entitled to one vote
for each share of Common Stock (as defined hereafter) and such votes may be cast
either in person or by written proxy.
VOTING SECURITIES
The Company has only one class of voting securities, its common stock, par
value $.01 per share (the "Common Stock") outstanding. On March 7, 1997,
12,615,833 shares of Common Stock were outstanding. At the 1997 Annual Meeting,
each shareholder of record at the close of business on March 7, 1997 will be
entitled to one vote for each share of Common Stock owned on that date as to
each matter properly presented
1
<PAGE> 5
to the 1997 Annual Meeting. The holders of a majority of the total number of the
issued and outstanding shares of Common Stock shall constitute a quorum for
purposes of the 1997 Annual Meeting.
ELECTION OF DIRECTORS
The Board is divided into three classes, with directors in each class
serving staggered three-year terms. At each annual meeting of shareholders, the
terms of directors in one of the three classes expire. At that annual meeting of
shareholders, directors are elected in a class to succeed the directors whose
terms expire, with the terms of the directors so elected to expire at the third
annual meeting of shareholders thereafter. Pursuant to the Company's Bylaws, new
directors elected by the remaining Board members to fill a vacancy on the Board
shall hold office for a term expiring at the annual meeting of shareholders at
which the term of office of the class of which they have been elected expires
and until such director's successors shall have been duly elected and qualified.
Pursuant to Landstar's Restated Certificate of Incorporation, the Board has
fixed the number of directors at six; two in the class to be elected at the 1997
Annual Meeting of Shareholders (whose members' terms will expire at the 2000
Annual Meeting of Shareholders), two in the class whose members' terms will
expire at the 1998 Annual Meeting of Shareholders, and two in the class whose
members' terms will expire at the 1999 Annual Meeting of Shareholders.
It is intended that the shares represented by the accompanying form of
proxy will be voted at the 1997 Annual Meeting for the election of nominees John
B. Bowron and Ronald W. Drucker as the directors comprising Class I whose
members' terms will expire at the 2000 Annual Meeting of Shareholders, unless
the proxy specifies otherwise. Each nominee has indicated his willingness to
serve as a member of the Board, if elected.
If, for any reason not presently known, Messrs. Bowron and/or Drucker are
not available for election at the time of the 1997 Annual Meeting, the shares
represented by the accompanying form of proxy may be voted for the election in
his/their stead of substitute nominee(s) designated by the Board or a committee
thereof, unless the proxy withholds authority to vote for all nominees.
Assuming the presence of a quorum, to be elected, a nominee must receive
the affirmative vote of the holders of a majority of the Common Stock, present,
in person or by proxy, at the 1997 Annual Meeting. Abstentions from voting and
broker non-votes will have no effect on the outcome of this proposal.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
2
<PAGE> 6
DIRECTORS OF THE COMPANY
The following information describes the principal occupation or employment,
other affiliations and business experience of each nominee named above and to
the other persons whose terms as directors will continue after the 1997 Annual
Meeting.
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
- - ------------------------- ---- -------------------------------------------------------------
<S> <C> <C>
CLASS I -- TERM EXPIRES AT 1997 ANNUAL MEETING
John B. Bowron........... 62 Mr. Bowron has been a director of the Company since April
1991 and Senior Vice President of the Company since January
1993. He also has been a director of Landstar System
Holdings, Inc. (a wholly-owned subsidiary of the Company)
("LSHI") since October 1988 and Chairman of the Board of
Landstar Gemini, Inc. (an indirectly held subsidiary of LSHI)
("Landstar Gemini") since October 1990. He has also served as
a director of Montgomery Tank Lines, Inc. since May 1995. Mr.
Bowron was Chairman of the Board of Landstar Ranger, Inc. (a
wholly-owned subsidiary of LSHI) ("Landstar Ranger") from
April 1990 to November 1994. He also served as Chairman of
the Board of Landstar Poole, Inc. (a wholly-owned subsidiary
of LSHI) ("Landstar Poole") from July 1991 to August 1992.
Ronald W. Drucker........ 55 Mr. Drucker has been a director of the Company and LSHI since
April 1994. From 1987 to 1993, he was the Chairman of the
National Defense Transportation Association ("NDTA") and
currently serves as the Chairman of the NDTA Technology
Committee. He has also served as Chairman of the Board of
Encompass, a global logistics information joint venture of
AMR and CSX Corporations, since 1989. Between 1966 and 1992,
Mr. Drucker served with CSX predecessor companies in various
capacities. He is a member of the American Railway
Engineering Association and the American Society of Civil
Engineers and serves as a member of the Boards of Directors
of SunTrust Bank-North Florida, N.A., Jacksonville
University, and The New World Symphony.
CLASS II -- TERM EXPIRES AT 1998 ANNUAL MEETING
Arthur J. Fritz, Jr...... 56 Mr. Fritz has been a director of the Company since April
1991, Chairman of the Board of Directors of Jabar Enterprises
since 1988, and President of J. Fritz Winery since 1982. Mr.
Fritz has been a director of LSHI since March 1991, Arkansas
Best Corporation since April 1989, and Intercargo Insurance
Company since January 1988.
Merritt J. Mott.......... 51 Mr. Mott has been a director of the Company and LSHI since
August 1994. He has also served as President and Treasurer of
Rockford Sanitary Systems, Inc. since April 1986 and as
President and Co-Founder of T & M Fabricating, Inc. since
1993. From February 1983 to July 1996, he served as Executive
Vice President and a director of Mott Bros. Company. Mr. Mott
is a director of Rockford Health Plans since April 1994 and
has been a trustee of the William Howard Trust since 1984.
</TABLE>
3
<PAGE> 7
DIRECTORS OF THE COMPANY (continued)
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
- - ------------------------- ---- -------------------------------------------------------------
<S> <C> <C>
CLASS III -- TERM EXPIRES AT 1999 ANNUAL MEETING
David G. Bannister....... 41 Mr. Bannister has been a director of the Company since April
1991, and a director of LSHI since October 1988. Mr.
Bannister is a Managing Director at Alex. Brown & Sons
Incorporated and has been employed by that firm in various
capacities since 1983. He has been a director of Allied
Holdings, Inc. since December 1993.
Jeffrey C. Crowe......... 50 Mr. Crowe has been Chairman of the Board, President and Chief
Executive Officer of the Company since April 1991. He has
been President and Chief Executive Officer of LSHI since June
1989 and Chairman of the Board of LSHI since March 1991. Mr.
Crowe serves in a number of capacities at the American
Trucking Association, Inc. ("ATA") including Secretary and a
member of the ATA Executive Committee and has served as a
director of the ATA Foundation since November 1989. He has
also served as Chairman of the NDTA since October 1993. From
May 1990 to September 1993, he served as Chairman of the
Surface Transportation Committee of the NDTA and also served
as Chairman of the Board of Deliver, U.S.A., an affiliate of
ATA, from 1990 to 1996 as well as a Vice President at large
of the ATA from November 1989 to 1996.
</TABLE>
4
<PAGE> 8
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board.
The Board meets on a regularly scheduled basis four times a year to review
significant developments affecting the Company and to act on matters requiring
Board approval. It also holds special meetings and acts by written consent when
important matters require Board action between scheduled meetings.
ATTENDANCE AT BOARD MEETINGS
During the 1996 fiscal year, the Board held 4 regularly scheduled meetings
and acted by unanimous written consent 9 times. During such fiscal year, all
directors attended 75% or more of the combined total meetings of the Board and
its respective committees during the period in which they served as directors or
committee members.
COMMITTEES OF THE BOARD
The Board has established Audit and Compensation Committees to devote
attention to specific subjects and to assist in the discharge of its
responsibilities. The functions of those committees, their current members and
the number of meetings held during 1996 are described below. The Board does not
have an Executive Committee and does not have a committee for the nomination of
directors. The Board nominates persons to be nominees for directorships.
AUDIT COMMITTEE
Members: David G. Bannister, Ronald W. Drucker and Merritt J. Mott
The Audit Committee recommends to the Board the appointment of the
independent auditors for the Company and monitors the performance of such firm;
reviews and approves the scope and results of the annual audit; and evaluates
with the independent auditors the Company's annual audit and annual consolidated
financial statements; reviews with management the status of internal accounting
controls; and evaluates problem areas having a potential financial impact on the
Company which may be brought to its attention by management, the independent
auditors or the Board. In addition, the Audit Committee reviews the independent
auditors' fees for services rendered to the Company. The Audit Committee held 2
meetings during 1996.
COMPENSATION COMMITTEE
Members: David G. Bannister, Ronald W. Drucker, Arthur J. Fritz, Jr. and
Merritt J. Mott
The Compensation Committee functions include (i) reviewing and making
determinations subject to review by the Board with respect to matters having to
do with the compensation of senior executive officers and directors of the
Company and (ii) administering certain plans relating to the compensation of
officers. The Compensation Committee held 4 regularly scheduled meetings, 1
special meeting, and acted by unanimous written consent 4 times during 1996.
5
<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age, principal occupation and
business experience during the last five years of each of the current executive
officers of the Company. The executive officers of the Company serve at the
discretion of the Board and until their successors are duly elected and
qualified. For information regarding ownership of the Common Stock by the
executive officers of the Company, see "Security Ownership by Management and
Others." There are no family relationships among directors and executive
officers of the Company or its subsidiaries.
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
- - ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
John B. Bowron..................... 62 See previous description under "Directors of the
Company."
Eddie R. Brown..................... 46 Mr. Brown has been Executive Vice President of the
Company and LSHI since January 1996 and President of
Landstar Ranger since January 1996. He served as
Executive Vice President and Chief Operating Officer
of the Company and LSHI from November 1994 to
January 1996 and served as President of Landstar
Poole and as a Vice President of LSHI from July 1991
to November 1994.
Jeffrey C. Crowe................... 50 See previous description under "Directors of the
Company."
Henry H. Gerkens................... 46 Mr. Gerkens has been Executive Vice President and
Chief Financial Officer of the Company and LSHI
since November 1994. He served as Vice President and
Chief Financial Officer of the Company from January
1993 to November 1994 and held the same positions at
LSHI from August 1988 to November 1994. He is also
an officer of each of the operating subsidiaries
(the "Operating Subsidiaries") of LSHI: namely,
Landstar Gemini, Landstar Inway, Inc. (a
wholly-owned subsidiary of LSHI) ("Landstar Inway");
Landstar Ligon, Inc. (a wholly-owned subsidiary of
LSHI) ("Landstar Ligon"), Landstar Poole, Landstar
Ranger, Landstar Corporate Services, Inc. (an
indirectly held subsidiary of LSHI) ("LCSI"),
Landstar T.L.C., Inc. (an indirectly held subsidiary
of LSHI) ("Landstar T.L.C."), Landstar Express
America, Inc. (a wholly-owned subsidiary of LSHI)
("Landstar Express America"), and Landstar
Logistics, Inc. (a wholly-owned subsidiary of LSHI)
("Landstar Logistics"). Mr. Gerkens was Treasurer of
the Company from April 1991 to January 1993.
Michael L. Harvey.................. 52 Mr. Harvey has been Vice President and General
Counsel of the Company since January 1993. He has
been Secretary of the Company, and Vice President,
General Counsel and Secretary of LSHI since August
1992. Mr. Harvey is also an officer of each of the
Operating Subsidiaries. From 1985 to August 1992, he
was the Senior Vice President and General Counsel to
Atlas Van Lines, Inc.
</TABLE>
6
<PAGE> 10
EXECUTIVE OFFICERS OF THE COMPANY (continued)
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
- - ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
James R. Hertwig................... 45 Mr. Hertwig has been Executive Vice President of the
Company and LSHI and President of Landstar Logistics
since October 1995. He also has been President of
Landstar Gemini since January 1997. Mr. Hertwig
served as President of Carolina Freight Carriers
from October 1994 to September 1995 and as Vice
President of Carolina Freight Corp. from January
1994 to October 1994. From October 1994 to September
1995, he served as Chairman of the Board of Red
Arrow Freight Lines; and from February 1989 to
October 1993, he was President of Con-Way
Intermodal.
Brian C. Kinsey.................... 45 Mr. Kinsey has been Vice President - Operations and
Safety of the Company since January 1993 and has
held the same position at LSHI since March 1989. Mr.
Kinsey was Chairman of the Independent Contractor
Division of the Interstate Truckload Carriers
Conference ("ITCC") from March 1991 to March 1992.
He has been a director of the ITCC since April 1990
and a director of the Motor Transport Association of
Connecticut since August 1992.
Robert C. LaRose................... 42 Mr. LaRose has been Vice President - Finance and
Treasurer of the Company and LSHI since October
1995. He served as Vice President and Controller of
the Company from January 1993 to October 1995 and
held the same positions at LSHI from March 1989 to
October 1995. He is also an officer of each of the
Operating Subsidiaries. Mr. LaRose was Assistant
Treasurer of the Company from May 1991 to January
1993.
Robert C. Luminati................. 56 Mr. Luminati has been Vice President - Management
Information Services of the Company since January
1993. He has held the same position at LSHI since
August 1989.
James R. Martin.................... 57 Mr. Martin has been Vice President - Corporate
Administrative Services of the Company and LSHI
since October 1995, President of LCSI since January
1994, Assistant Treasurer and Secretary of Landstar
Ranger since August 1995, Vice President and
Treasurer of Landstar Gemini since February 1991. He
served as a Vice President of LSHI from January 1994
to October 1995. Mr. Martin previously served in
various capacities at Landstar Ranger from October
1990 to August 1995. Mr. Martin was a Vice President
of LCSI from December 1993 to January 1994.
James B. Shephard.................. 60 Mr. Shephard has been Senior Vice
President - Corporate Business Development of the
Company since November 1995 and a Vice President of
LSHI since December 1992. From November 1994 to
January 1996, he served as Chairman of Landstar
Ranger and was President of Landstar Ranger from
April 1990 to January 1996.
</TABLE>
7
<PAGE> 11
EXECUTIVE OFFICERS OF THE COMPANY (continued)
PRESIDENTS OF THE COMPANY'S OPERATING SUBSIDIARIES
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
- - ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
Eddie R. Brown..................... 46 See previous description under "Executive Officers
of the Company."
Roger T. Burbage................... 53 Mr. Burbage has been President of Landstar Poole
since November 1994 and a Vice President of LSHI
since November 1994. He served as Executive Vice
President of Landstar Poole from February 1992 to
November 1994.
Joseph P. Fitzgerald............... 49 Mr. Fitzgerald has been President of Landstar Ligon
and a Vice President of LSHI since November 1994. He
served as Executive Vice President of Landstar Ligon
from July 1994 to November 1994 and as a Vice
President of Landstar Ligon from July 1991 to July
1994.
James R. Hertwig................... 45 See previous description under "Executive Officers
of the Company."
James R. Martin.................... 57 See previous description under "Executive Officers
of the Company."
Jeffrey L. Pundt................... 46 Mr. Pundt has been President of Landstar Inway and a
Vice President of LSHI since June 1996. He has also
served as President of Landstar T.L.C. since January
1997. Mr. Pundt served as Executive Vice President
of Landstar Inway from September 1994 to June 1996
and as a Vice President of Landstar Inway from
September 1986 to September 1994.
Ronald G. Stanley.................. 45 Mr. Stanley has been President of Landstar Express
America and a Vice President of LSHI since February
1996. He served as Vice President - Marketing and
Sales at Roadway Global Air from June 1992 to
January 1996 and served as President of Emerald
Coast Products from October 1987 to June 1992.
</TABLE>
8
<PAGE> 12
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS. During 1996, directors who were not employees
of the Company received an annual director's fee of $20,000, plus a fee of
$2,000 for each board meeting attended and a fee of $1,000 for each meeting of a
committee attended if the committee meeting was held on a day other than a day
on which a Board meeting was held. Directors are also reimbursed for expenses
incurred in connection with attending Board meetings. Pursuant to the Company's
1994 Directors Stock Option Plan, each director who was an Eligible Director (as
defined therein) on November 30, 1994 received an option to purchase 12,000
shares of the Company's Common Stock. Also, pursuant to the Company's 1994
Directors Stock Option Plan, commencing in 1996, on the first business day after
each annual meeting of shareholders of the Company, each Eligible Director who
was elected or re-elected as a director at such annual meeting shall receive an
award of options to purchase an additional 12,000 shares of the Company's Common
Stock. All of such options have an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant and are subject to vesting
requirements and other terms of the Company's 1994 Directors Stock Option Plan.
Directors who are also officers of the Company do not receive any additional
compensation for services as a director or for services on committees of the
Board or for meetings or attendance fees.
COMPENSATION OF EXECUTIVE OFFICERS. The following table summarizes the
compensation paid to the Chief Executive Officer and each of the Company's four
most highly compensated executive officers for services rendered to the Company
and its subsidiaries during the 1996 fiscal year (collectively, the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
NO. OF
ANNUAL COMPENSATION SECURITIES
-------------------------------------- UNDERLYING
ANNUAL OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(2) GRANTED COMPENSATION(3)
- - ----------------------------- ---- --------- ----------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey C. Crowe............. 1996 $ 350,000 $ 0 $13,290 0 $11,925
Chairman of the Board, 1995 300,000 0 12,646 40,000 10,425
President & Chief Executive 1994 285,417 1,200,000 6,319 0 29,988
Officer
Henry H. Gerkens............. 1996 175,000 0 9,537 0 6,858
Executive Vice President & 1995 175,000 0 10,077 16,000 6,858
Chief Financial Officer 1994 167,750 500,000 10,586 5,000 6,641
Eddie R. Brown............... 1996 175,000 0 3,935 0 17,313
Executive Vice President & 1995 175,000 0 12,884 10,000 45,000
President of Landstar 1994 163,334 381,000 2,224 7,500 5,596
Ranger
James R. Hertwig............. 1996 170,000 0 10,889 2,500 12,429
Executive Vice President & 1995(4) 31,603 0 0 17,500 0
President of Landstar 1994(4) 0 0 0 0 0
Logistics
James B. Shephard............ 1996 163,500 0 3,255 0 9,755
Senior Vice President - 1995 163,500 0 2,455 0 9,470
Corporate Business 1994 162,000 395,700 722 1,500 9,470
Development
</TABLE>
- - ---------------
(1) Amounts shown include any salary deferred under the Landstar 401(k) Savings
Plan and the Landstar Supplemental Executive Retirement Plan.
(2) Amounts shown include amounts reimbursed during the fiscal year for the
payment of taxes on behalf of the above Named Executives.
(3) Amounts for 1996 include contributions in the amount of $4,500 which were
made by the Company under the Landstar 401(k) Savings Plan on behalf of
Messrs. Crowe, Gerkens, Brown and Shephard and contributions made by the
Company under the Landstar Supplemental Executive Retirement Plan on
9
<PAGE> 13
behalf of Mr. Crowe in the amount of $6,000, Messrs. Gerkens and Brown in
the amounts of $750 and Mr. Shephard in the amount of $405. Amounts for 1996
also include $11,195 paid by the Company on behalf of Mr. Hertwig in
connection with his relocation and the dollar value of term life insurance
premiums paid by the Company on behalf of Messrs. Crowe, Gerkens, Brown,
Hertwig and Shephard in the amounts of $1,425, $1,608, $696, $1,234 and
$4,850, respectively. In addition, the amount indicated for Mr. Brown for
1996 includes $11,367 which represents principal and interest forgiven under
a loan extended to him by the Company in connection with his relocation.
(4) All compensation amounts for 1995 reflect amounts earned by Mr. Hertwig from
October 25, 1995 (Mr. Hertwig's date of employment) through the end of
fiscal year 1995. Amounts for 1994 are not applicable as Mr. Hertwig was not
an employee of the Company during that year.
The following table sets forth the number of and information about stock
options granted in fiscal year 1996 to each of the Named Executives. A total of
23,000 options were granted under the Company's 1993 Stock Option Plan in fiscal
year 1996.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
NO. OF SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERM
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION ----------------------
NAME GRANTED(1) IN FISCAL YEAR PRICE DATE 5% ($) 10% ($)
- - ---------------------- ----------------- --------------- -------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey C. Crowe...... 0 0.0% -- -- -- --
Henry H. Gerkens...... 0 0.0 -- -- -- --
Eddie R. Brown........ 0 0.0 -- -- -- --
James R. Hertwig...... 2,500 10.9 $ 24.625 Aug. 9, 2006 $ 38,712 $ 98,112
James B. Shephard..... 0 0.0 -- -- -- --
</TABLE>
- - ---------------
(1) Granted pursuant to the Company's 1993 Stock Option Plan. Each of the
options will generally become exercisable in installments of 20% on the
first five anniversaries of the date of grant subject to acceleration in
certain circumstances.
The following table sets forth the number and value at December 28, 1996 of
all exercisable and unexercisable options held by each of the Named Executives.
There were no options exercised by the Named Executives during fiscal year 1996.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 28, 1996 AT DECEMBER 28, 1996(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jeffrey C. Crowe........................... 38,000 52,000 $ 157,500 $ 105,000
Henry H. Gerkens........................... 14,200 21,800 47,250 31,500
Eddie R. Brown............................. 12,500 17,500 39,375 26,250
James R. Hertwig........................... 3,500 16,500 0 0
James B. Shephard.......................... 8,100 5,900 39,375 26,250
</TABLE>
- - ---------------
(1) The value of in-the-money options represents the difference between the fair
market value of the underlying securities as of December 27, 1996 and the
exercise price of the options. The fair market value of the underlying
securities was calculated based upon the last reported sale price per share
of Common Stock as quoted through the National Association of Securities
Dealers, Inc. National Market System ("NASDAQ") in the Company's fiscal year
ended December 28, 1996, which was on December 27, 1996.
10
<PAGE> 14
EMPLOYMENT CONTRACTS WITH MANAGEMENT
On November 2, 1995, the Company entered into an employment contract with
Mr. Shephard whereby Mr. Shephard would receive an annual salary of $163,500 for
the balance of the 1995 year and for the full year of 1996. His annual salary
will be reduced to $75,000 for the full 1997 year. His employment with the
Company will terminate on the last day of the 1997 fiscal year.
INDEBTEDNESS OF MANAGEMENT
In connection with the relocation of the Company's corporate headquarters
from Shelton, Connecticut to Jacksonville, Florida, the Company has issued loans
to Messrs. Crowe, Gerkens and LaRose in the amounts of $200,000 on December 4,
1996, $100,000 on December 12, 1996, and $80,000 on December 17, 1996,
respectively, to assist them in their individual relocation to the Jacksonville
area. Each loan bears interest at a rate of 7.5% and is repayable annually over
a five-year period. On each anniversary date of such loan, the principal and
interest amounts then due will be forgiven provided the executive is still
employed by the Company.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Overall Policy
The Company's executive compensation philosophy is designed to attract and
retain the best possible executive talent and to motivate these executives to
develop and implement the Company's business strategy. These objectives are to
be attained by tying a significant portion of each executive's compensation to
the Company's success in meeting specified corporate performance goals and,
through the grant of stock options, to appreciation in the Company's stock
price. Additionally, the Company also recognizes individual contributions as
well as overall business results.
The executive compensation program is reviewed annually by the Compensation
Committee. Periodically, at the Compensation Committee's sole discretion, an
independent review of the executive compensation program may be performed by
outside consultants.
The Compensation Committee is responsible for decisions regarding executive
compensation, including a determination of the compensation awarded to those
individuals whose compensation is detailed in this proxy statement, subject to
review by the Board. The key elements of the Company's executive compensation
consist of base salary, annual bonus and stock options. The Compensation
Committee's policies with respect to each of these elements, including the basis
for the compensation awarded to Mr. Crowe, the Company's chief executive
officer, are discussed below.
Base Salaries
Base salaries for newly hired executive officers are initially determined
by evaluating the responsibilities of the position held and the experience of
the individual. Salary adjustments are determined by evaluating the performance
of the Company and of each executive officer, and also take into account new
responsibilities. In the case of executive officers with responsibility for an
Operating Subsidiary, the financial results of such Operating Subsidiary are
also considered.
On January 1, 1996, Mr. Crowe was granted a 16.7% increase in his base
salary to $350,000 from $300,000. With respect to this increase, the
Compensation Committee took into account its subjective evaluation on Mr.
Crowe's individual performance.
Annual Bonus
The Company's executive officers were eligible to receive an annual cash
bonus under the Company's 1996 Management Incentive Compensation Plan (the "1996
MICP"). The 1996 MICP provided for bonus payments to be made to eligible
Operating Subsidiary employees upon the achievement of a consolidated earnings
per share target and operating income targets of the individual Operating
Subsidiary. Bonus payments with respect to eligible corporate employees under
the 1996 MICP were dependent upon achievement of the consolidated earnings per
share target. These performance criteria were established at the beginning of
1996 by the Compensation Committee.
11
<PAGE> 15
As the Company did not achieve the targets established under the 1996 MICP
in order to generate payment of bonus amounts, no executive officer or any Named
Executive received bonuses pursuant to the 1996 MICP.
Stock Options
Under the Company's 1993 Stock Option Plan, stock options are granted to
the Company's executive officers. The Compensation Committee determines the
number of stock options to be granted pursuant to guidelines it develops based
on an officer's job responsibilities and individual performance evaluation.
Stock options are granted with an exercise price equal to the fair market value
of the Common Stock on the date of grant and generally vest over five years.
This approach is designed to encourage the creation of long-term shareholder
value since no benefit can be realized from such options unless the stock price
exceeds the exercise price.
As of March 7, 1997, Mr. Crowe owned 120,176 shares of the Company's Common
Stock and holds options to purchase an additional 90,000 shares. The
Compensation Committee believes that significant equity interests in the Company
held by the Company's management helps to align the interests of shareholders
and management and maximize shareholder returns over the long term.
Policy as to Section 162(m) of the Code
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
denies a publicly traded company a federal income tax deduction for compensation
in excess of $1 million paid to certain of its executive officers unless the
amount of such excess is payable based solely upon the attainment of objective
performance criteria. The Company has undertaken to qualify substantial
components of the incentive compensation it makes available to its executive
officers for the performance exception to nondeductibility. Stock option grants
under the Company's 1993 Stock Option Plan currently meet these requirements. In
1995, the Company received shareholder approval for the Management Incentive
Compensation Plan so that annual awards payable thereunder would qualify for the
performance exception under Section 162(m). The Compensation Committee believes
that tax deductibility of compensation is an important factor, but not the sole
factor, to be considered in setting executive compensation policy. Accordingly,
the Compensation Committee generally intends to take such reasonable steps as
are required to avoid the loss of a tax deduction due to Section 162(m) but
reserves the right to pay amounts which are not deductible in appropriate
circumstances.
Conclusion
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to significant thresholds of
corporate performance and stock price appreciation. The Company's 1996 results
were lower than the target criteria established in the 1996 MICP. As such, no
bonuses were paid under the 1996 MICP.
Compensation Committee of the Board
David G. Bannister
Ronald W. Drucker
Arthur J. Fritz, Jr.
Merritt J. Mott
12
<PAGE> 16
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 in each of
the Company's Common Stock, the Standard & Poor's 500 Stock Index and the Dow
Jones Transportation Stock Index for the period commencing March 5, 1993 (the
date of the Company's initial public offering) through December 28, 1996.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) LANDSTAR S&P 500 DJ 20 TRANS
<S> <C> <C> <C>
MAR 5 100 100.83 100
MAR 26 100.19 100.37 100.34
APR 30 95.196 98.61 103.53
MAY 28 113.46 100.91 102.64
JUN 25 110.58 100.33 98.12
JUL 30 125.96 100.45 104.98
SEP 24 123.08 102.58 106.37
OCT 29 128.85 104.87 112.26
NOV 26 132.69 103.8 113.09
DEC 31 170.19 104.55 114.55
JAN 28 157.69 107.3 119.25
FEB 25 175 104.47 114.54
MAR 31 242.31 112.74 106.33
APR 29 192.31 101.07 107.91
MAY 27 200.08 102.51 105.48
JUN 24 217.31 99.26 103.35
JUL 29 242.31 102.72 103.17
AUG 26 238.46 106.21 104.94
SEP 30 265.38 103.71 96.95
OCT 28 251.92 106.2 99.89
NOV 25 207.69 101.38 92.9
DEC 30 251.92 102.95 94.58
JAN 27 250.77 105.44 99.03
FEB 24 280.77 109.41 103.68
MAR 31 242.31 112.24 106.33
APR 28 223.08 115.38 109.61
MAY 26 207.69 117.38 105.39
JUN 30 198.08 123.22 113.88
JUL 28 236.54 126.18 120.43
AUG 25 218.27 125.55 123.45
SEP 29 185.58 131 127.03
OCT 27 190.38 129.94 123.78
NOV 24 223.08 134.48 112.21
DEC 28 205.77 138.06 128.77
JAN 26 182.69 139.34 124.08
FEB 23 184.62 147.74 136.76
MAR 29 192.31 144.69 139.89
APR 26 219.23 146.48 142.86
MAY 31 226.92 149.99 144.82
JUN 28 223.08 150.32 141.82
JUL 26 194.23 142.54 128.85
AUG 30 201.92 146.15 132.91
SEP 27 205.77 153.81 134.36
OCT 25 184.62 157.11 138.23
NOV 29 176.92 169.69 148.91
DEC 28 182.69 169.63 148.71
</TABLE>
13
<PAGE> 17
SECURITY OWNERSHIP BY MANAGEMENT AND OTHERS
The following table sets forth certain information concerning the
beneficial ownership of the Company's Common Stock as of March 7, 1997, by (i)
each person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director, nominee for election as
a director and Named Executive of the Company, and (iii) all directors and
current executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND OWNERSHIP
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER POSITION(S) OWNERSHIP CLASS(1)
- - --------------------------------- --------------------------------- ---------- ---------
<S> <C> <C> <C>
(i)
Capital Guardian Trust Company
and The Capital Group
Companies, Inc.(2)(3).......... 852,500 6.8%
FMR Corp.(2)(4).................. 1,413,600 11.2
Franklin Resources, Inc.(2)(5)... 750,700 6.0
T. Rowe Price Associates, Inc.
and T. Rowe Price New Horizons
Fund, Inc.(2)(6)............... 822,900 6.5
(ii)
David G. Bannister(7)............ Director 17,960 *
Ronald W. Drucker(8)............. Director and Nominee for Director 13,000 *
Arthur J. Fritz, Jr.(9).......... Director 23,000 *
Merritt J. Mott(10).............. Director 10,000 *
John B. Bowron................... Director and Nominee for Director
Senior Vice President 70,500 *
Jeffrey C. Crowe(11)............. Director and Chairman, President
and Chief Executive Officer 158,176 1.3
Henry H. Gerkens(12)............. Executive Vice President and
Chief Financial Officer 54,200 *
Eddie R. Brown(13)............... Executive Vice President and
President of Landstar Ranger 42,500 *
James R. Hertwig(14)............. Executive Vice President and
President of Landstar Logistics 3,500 *
James B. Shephard(15)............ Senior Vice President - Corporate
Business Development 13,848 *
(iii)
All directors and current
executive officers as a group
(19 persons)(16)(17)........... 558,808 4.4
</TABLE>
- - ---------------
* Less than 1%
(1) The percentages are based upon 12,615,833 shares, which equal the
outstanding shares of the Company as of March 7, 1997. With respect to the
calculation of the percentages for beneficial owners who hold options
exercisable within 60 days of March 7, 1997, the number of shares of Common
Stock on which the percentage is based also includes the number of shares
underlying such options.
(2) In accordance with the rules of the Securities and Exchange Commission, the
information set forth is based on the most recent Schedule 13G filed by
this entity.
(3) Capital Guardian Trust Company and The Capital Group Companies, Inc. filed
their Schedule 13G on February 12, 1997. The Capital Group Companies, Inc.
is the parent holding company of a group of investment management companies
that hold investment power and, in some cases, voting power over shares of
the Company. The investment management companies, which include a "bank" as
defined in
14
<PAGE> 18
Section 3(a)6 of the Securities Exchange Act of 1934 (the "Act") and
several investment advisers registered under Section 203 of the Investment
Advisers Act of 1940, provide investment advisory and management services
for their respective clients which include registered investment companies
and institutional accounts. The Capital Group Companies, Inc. does not have
investment power or voting power over any of the 852,500 shares of Common
Stock reported herein; however, The Capital Group Companies, Inc. may be
deemed to "beneficially own" such securities by virtue of Rule 13d-3 under
the Act. Capital Guardian Trust Company ("Capital Guardian"), a bank as
defined in Section 3(a)6 of the Act and a wholly-owned subsidiary of The
Capital Group Companies, Inc., is the beneficial owner of 824,100 of such
shares, or 6.5% of the Common Stock outstanding, as a result of its serving
as the investment manager of various institutional accounts. Capital
Guardian has sole dispositive power over such 824,100 shares with sole
voting power over 659,200 of such shares. The remaining 28,400 shares
reported as beneficially owned by The Capital Group Companies, Inc. are
beneficially owned by other subsidiaries of The Capital Group Companies,
Inc., none of which by itself owns 5% or more of the Common Stock
outstanding. The business address of each of the foregoing is 333 South
Hope Street, Los Angeles, California 90071.
(4) According to an amendment, filed February 14, 1997, to its Schedule 13G
(the "FMR Schedule 13G"), FMR Corp. is the beneficial owner of 1,413,600
shares of Common Stock. Fidelity Management and Research Company
("Fidelity"), a wholly-owned subsidiary of FMR Corp. and an investment
adviser registered under the Investment Advisers Act of 1940, is also the
beneficial owner of 1,208,700 of such shares, or 9.6% of the Common Stock
outstanding, as a result of acting as investment adviser to several
Fidelity investment companies (the "Funds") registered under the Investment
Company Act of 1940, and, as a result of acting as sub-adviser to Fidelity
American Special Situations Trust ("FASST"). Such shares are voted by
Fidelity in accordance with written guidelines established by the Funds'
boards of trustees. One of these Funds, Fidelity Magellan, also
beneficially owns 1,101,200 of such shares, or 8.7% of the Common Stock
outstanding. Edward C. Johnson 3d (Chairman of FMR Corp.), FMR Corp. and
the Funds each have sole power to dispose of the 1,199,300 shares owned by
the Funds. Fidelity Management Trust Company ("Fidelity Management"), a
wholly-owned subsidiary of FMR Corp., beneficially owns 204,900 shares, or
1.6% of the Common Stock outstanding, as a result of serving as investment
manager for certain institutional accounts. Edward C. Johnson 3d and FMR
Corp., through its control of Fidelity Management, each has sole
dispositive power over said 204,900 shares, with sole power to direct the
voting of 189,900 of such shares and no power to vote or to direct the
voting of 15,000 of the shares of Common Stock owned by such institutional
accounts. Edward C. Johnson 3d, various members of his family and trusts
for their benefit own FMR Corp. voting stock. These Johnson family members,
through their ownership of voting stock and the execution of a family
shareholders' voting agreement, form a controlling group with respect to
FMR Corp. The business address of each of the foregoing is 82 Devonshire
Street, Boston, Massachusetts 02109.
(5) Franklin Resources, Inc. ("FRI") filed its Schedule 13G on February 12,
1997. The securities reported on such Schedule 13G are beneficially owned
by one or more open or closed-end investment companies or other managed
accounts which are advised by direct and indirect investment advisory
subsidiaries (the "Adviser Subsidiaries") of FRI. Such advisory contracts
grant to the Adviser Subsidiaries all voting and investment power over the
securities owned by such advisory clients. Therefore, the Adviser
Subsidiaries may be deemed to be, for purposes of Rule 13d-3 under the
Securities Exchange Act of 1934, the beneficial owner of such securities.
Charles B. Johnson and Rupert H. Johnson, Jr. (the "Principal
Shareholders") each own in excess of 10% of the outstanding common stock of
FRI and are the principal shareholders of FRI. FRI, the Principal
Shareholders and each of the Adviser Subsidiaries disclaim any economic
interest or beneficial ownership in any of the 750,700 shares reported as
beneficially owned. Of the 750,700 shares, Franklin Mutual Advisers, Inc.,
has sole dispositive power and sole voting power over 441,200, or 3.5% of
the Common Stock outstanding; Franklin Advisers, Inc., has sole dispositive
power and sole voting power over 237,000, or 1.9% of the Common Stock
outstanding; Templeton Global Advisors Limited, has sole dispositive power
and sole voting power over 61,900, or .5% of the Common Stock outstanding;
and Templeton Investment Management (Australia) Limited, has sole
dispositive power and sole voting power over 10,600, or .1% of the Common
Stock
15
<PAGE> 19
outstanding. The business address for each of the foregoing is 777 Mariners
Island Boulevard, San Mateo, California 94404.
(6) T. Rowe Price Associates, Inc. ("Price Associates")'s Schedule 13G filing
dated February 14, 1997 indicates that it has sole dispositive power with
respect to all 822,900 shares, or 6.5% of the Common Stock outstanding, and
sole voting power over 40,000 of such shares. These securities are owned by
various individual and institutional investors including T. Rowe Price New
Horizons Fund, Inc. (the "New Horizons Fund"), which has sole voting power
over 771,000 shares, or 6.1% of the Common Stock outstanding and no
dispositive power over any of such shares. Price Associates serves as an
investment adviser to the New Horizons Fund. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is
deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that is, in fact, the beneficial owner of
such securities. The Schedule 13G also states that Price Associates. is an
investment adviser registered under the Investment Advisers Act of 1940 and
that the New Horizons Fund, Inc. is an investment company registered under
the Investment Company Act of 1940. The business address for each of the
foregoing is 100 E. Pratt Street, Baltimore, Maryland 21202.
(7) Includes 12,000 shares that may be acquired upon the exercise of options.
(8) Includes 5,000 shares held in trust for which Mr. Drucker has shared voting
and investment power with SunTrust Bank -- Trust Department of SunTrust
Bank-North Florida, N.A. and 8,000 shares that may be acquired upon the
exercise of options.
(9) Includes 5,000 shares held jointly with Mr. Fritz's spouse; 10,000 shares
held by Trayjen, L.P., which are beneficially owned by Mr. Fritz by virtue
of his status as general partner thereof; and 8,000 shares that may be
acquired upon the exercise of options.
(10) Includes 100 shares held in trust for Mr. Mott's son; 100 shares held in
trust for Mr. Mott's daughter; and 8,000 shares that may be acquired upon
the exercise of options.
(11) Includes 38,000 shares that may be acquired upon the exercise of options.
(12) Includes 14,200 shares that may be acquired upon the exercise of options.
(13) Includes 12,500 shares that may be acquired upon the exercise of options.
(14) Includes 3,500 shares that may be acquired upon the exercise of options.
(15) Includes 8,100 shares that may be acquired upon the exercise of options.
(16) Represents amount of shares deemed to be beneficially owned either directly
or indirectly by all directors and current executive officers as a group.
(17) Includes 141,900 shares that may be acquired upon the exercise of options.
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 officers and directors, and persons who own more than ten percent
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
("SEC"). Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Form 5 was required, the Company
believes that during the year ended December 28, 1996, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with; except that a Form 4 report for Eddie R.
Brown was inadvertently filed one week late. Such report covered only one
transaction consisting of a sale of 1,000 shares of the Company's Common Stock.
16
<PAGE> 20
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP served as independent auditors for the
Company for the fiscal year ended December 28, 1996. Pursuant to the
recommendation of the Audit Committee, the Board has appointed that firm to
continue in that capacity for fiscal year 1997, and recommends that a resolution
be presented to shareholders at the 1997 Annual Meeting to ratify that
appointment. A representative of KPMG Peat Marwick LLP will be present at the
1997 Annual Meeting and will have an opportunity to make a statement and respond
to appropriate questions from shareholders.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
SHAREHOLDER PROPOSALS
In accordance with regulations issued by the SEC, shareholder proposals
intended for presentation at the 1998 Annual Meeting of Shareholders must be
received by the Secretary of the Company no later than November 19, 1997, if
such proposals are to be considered for inclusion in the Company's Proxy
Statement. In accordance with the Company's Bylaws, shareholder proposals
intended for presentation at the 1998 Annual Meeting of Shareholders that are
not intended to be considered for inclusion in the Company's Proxy Statement
must be received by the Secretary of the Company not later than 35 days prior to
the 1998 Annual Meeting of Shareholders. Proposals should be mailed via
certified mail and addressed to Michael L. Harvey, Secretary, Landstar System,
Inc., 1000 Bridgeport Avenue, Shelton, Connecticut 06484.
17
<PAGE> 21
OTHER MATTERS
Management knows of no matters that are to be presented for action at the
meeting other than those set forth above. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy will vote
the shares represented by proxies in accordance with their best judgment on such
matters.
Proxies will be solicited by mail and may also be solicited in person or by
telephone by some regular employees of the Company. All expenses in connection
with the preparation of proxy material and the solicitation of proxies will be
borne by the Company.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY
By Order of the Board of Directors
LOGO
Michael L. Harvey
Vice President,
General Counsel, and
Secretary
1000 Bridgeport Avenue
Shelton, Connecticut 06484
THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO ANY SHAREHOLDER OF THE COMPANY
WHO SO REQUESTS, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 28, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
ANY SUCH REQUEST SHOULD BE DIRECTED TO LANDSTAR SYSTEM, INC., ATTENTION: HENRY
H. GERKENS, INVESTOR RELATIONS, 1000 BRIDGEPORT AVENUE, P.O. BOX 898, SHELTON,
CONNECTICUT 06484-0898.
18
<PAGE> 22
LANDSTAR SYSTEM, INC.
1000 BRIDGEPORT AVENUE, SHELTON, CONNECTICUT 06484
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Henry H. Gerkens and Michael L. Harvey,
jointly and severally, as Proxies, each with the power to appoint his
substitute, and hereby authorizes each or both of them to represent and to
vote, as designated on the reverse side, all the shares of Common Stock of
Landstar System, Inc. held of record by the undersigned on March 7, 1997, at the
Annual Meeting of Shareholders to be held on April 17, 1997 or any adjournment
thereof. None of the matters to be acted upon, each of which has been proposed
by Landstar System, Inc. (the "Company"), is related to or conditioned on the
approval of other matters.
* * CONTINUED AND TO BE SIGNED ON REVERSE SIDE * *
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 23
<TABLE>
<CAPTION>
- - ------------------------------------------------------
This proxy when properly executed will be voted in the Please mark your
manner directed herein by the undersigned shareholder. vote as [X]
If no direction is made, this proxy will be voted indicated in this
FOR Proposals 1 and 2. example
<S> <C>
1. ELECTIONS OF DIRECTORS (INSTRUCTION: To withhold authority to
vote for any individual nominee, strike a
line through the nominee's name below)
FOR all nominees WITHHOLD John B. Bowron Ronald W. Drucker
listed to the right AUTHORITY
(except as marked to to vote for all
the contrary) nominees listed
to the right
[_] [_]
2. RATIFICATION OF THE APPOINTMENT 3. In their discretion, each of
OF KPMG PEAT MARWICK LLP as the Proxies is authorized to
independent auditors of the Company vote upon such other business
for fiscal year 1997. as may properly come before
the meeting or any adjourn-
ment therof.
FOR AGAINST ABSTAIN Please sign exactly as your name
[_] [_] [_] appears below. When shares are
held by joint tenants, both
should sign. When signed as
attorney, as executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
DATED:
-------------------------
--------------------------------
Signature
--------------------------------
Signature if held jointly
* * PLEASE MARK, SIGN, DATE, AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE * *
</TABLE>
- - ---------------------------------------------------------------------
FOLD AND DETACH HERE
