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 filing 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:
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
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LOGO(R)
LANDSTAR SYSTEM, INC.
4160 WOODCOCK DRIVE
JACKSONVILLE, FLORIDA 32207
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
Notice is hereby given that the 1999 Annual Meeting of Shareholders of
Landstar System, Inc., a Delaware corporation (the "Company"), will be held at
the Ponte Vedra Inn, Ponte Vedra Beach, Florida 32082, on Wednesday, May 19,
1999, at 10:00 a.m., local time, for the following purposes:
(1) To elect two Class III Directors for terms to expire at the 2002 Annual
Meeting of Shareholders;
(2) To ratify the appointment of KPMG LLP as the Company's independent
auditors for fiscal year 1999;
(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 22, 1999 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 Ponte Vedra Inn at the address set forth above and during business hours
from May 9, 1999 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
/s/ Michael L. Harvey
MICHAEL L. HARVEY
Vice President,
General Counsel,
and Secretary
Jacksonville, Florida
March 29, 1999
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED
AND RETURNED PROMPTLY
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LANDSTAR SYSTEM, INC.
PROXY STATEMENT
March 29, 1999
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 Wednesday, May 19, 1999 (the "1999 Annual
Meeting"). The 1998 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 1998, is enclosed herewith. The mailing address of the
principal executive offices of the Company is 4160 Woodcock Drive, Jacksonville,
Florida 32207. This Proxy Statement, accompanying form of proxy, Notice of
Meeting and 1998 Annual Report are being mailed to the shareholders of the
Company on or about March 29, 1999.
RECORD DATE
The Board has fixed the close of business on March 22, 1999 as the record
date for the 1999 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 LLP as independent
auditors for the Company, as set forth in the Notice of 1999 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 1999 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 1999 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 $.01 per share (the "Common Stock") outstanding. On March 22, 1999,
10,276,833 shares of Common Stock were outstanding. At the 1999 Annual
Meeting, each shareholder of record at the close of business on March 22, 1999
will be entitled to one vote for each share of Common Stock owned on that date
as to each matter
1
<PG$PCN>
properly presented to the 1999 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 1999 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 the Bylaws of the Company, the Board acting by resolution at its
meeting on February 11, 1998 increased the number of Directors from six to
seven; two Class III Directors to be elected at the 1999 Annual Meeting of
Shareholders (whose members' terms will expire at the 2002 Annual Meeting of
Shareholders), two in the class whose members' terms will expire at the 2000
Annual Meeting of Shareholders, and three in the class whose members' terms will
expire at the 2001 Annual Meeting of Shareholders.
It is intended that the shares represented by the accompanying form of
proxy will be voted at the 1999 Annual Meeting for the election of nominees
David G. Bannister and Jeffrey C. Crowe as the Directors comprising Class III
whose members' terms will expire at the 2002 Annual Meeting of Shareholders,
unless the proxy specifies otherwise. Each nominee has indicated his or her
willingness to serve as a member of the Board, if elected.
If, for any reason not presently known, David G. Bannister or Jeffrey C.
Crowe are not available for election at the time of the 1999 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 1999 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
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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 1999 Annual
Meeting.
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
---- --- -------------------
<S> <C> <C>
CLASS III -- NOMINEES FOR ELECTION TO SERVE AS DIRECTORS UNTIL 2002 ANNUAL MEETING
David G. Bannister............. 43 Mr. Bannister has been a Director of the Company since April
1991 and a Director of Landstar System Holdings, Inc. (a
wholly-owned subsidiary of the Company) ("LSHI") since
October 1988. Mr. Bannister is a Managing Director of
Grotech Capital Group, a private equity and venture capital
firm. Prior to joining Grotech in May 1998, Mr. Bannister
was a Managing Director at BT Alex. Brown Incorporated. He
has been a Director of Allied Holdings, Inc. since December
1993.
Jeffrey C. Crowe............... 52 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 has been President of Signature Insurance
Company (a wholly-owned subsidiary of LSHI) ("Signature")
since February 1997. Mr. Crowe served in a number of
capacities at the American Trucking Association, Inc.
("ATA") including Secretary and a member of the ATA
Executive Committee and served as a Director of the ATA
Foundation since November 1989 until his resignation from
ATA in 1998. He has also served as Chairman of the National
Defense Transportation Association ("NDTA") commencing
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. He
has served as a Director of Silgan Holdings Inc. since May
1997, a Director of National Chamber Foundation since
November 1997, and a Director of U.S. Chamber of Commerce
since February 1998. He has been a Director of SunTrust
Bank-North Florida, N.A., since January 1999.
CLASS I -- DIRECTORS WHOSE TERMS EXPIRE AT 2000 ANNUAL MEETING
John B. Bowron................. 64 Mr. Bowron has been a Director of the Company since April
1991 and served as Senior Vice President of the Company from
January 1993 until December 1997 at which time he became
Vice President. He also has been a Director of LSHI since
October 1988. He was Chairman of the Board of Landstar
Gemini, Inc. (an indirectly held subsidiary of LSHI)
("Landstar Gemini") from October 1990 to April 1997. 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 served as a Director of
Montgomery Tank Lines, Inc. ("MTL") and also served on the
MTL Compensation Committee from May 1995 through April 1998.
</TABLE>
3
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DIRECTORS OF THE COMPANY (continued)
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
---- --- -------------------
<S> <C> <C>
Ronald W. Drucker.............. 57 Mr. Drucker has been a Director of the Company and LSHI
since April 1994. From 1987 to 1993, he was the Chairman of
the NDTA and currently serves as the Chairman of the NDTA
Business Practices Committee. He has also served as Chairman
of the Board of Encompass, a global logistics information
joint venture of AMR and CSX Corporations from 1989 through
1997. 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., Railworks, Inc., The Cooper Union for the Advancement
of Science and Art, Jacksonville University and The New
World Symphony.
CLASS II -- DIRECTORS WHOSE TERMS EXPIRE AT 2001 ANNUAL MEETING
Merritt J. Mott................ 53 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 has been a Director of Rockford Health
Plans since April 1994 and has been a trustee of the William
Howard Trust since 1984.
William S. Elston.............. 58 Mr. Elston has been a Director of the Company and LSHI since
February 1998. He has served as President and CEO of Clean
Shower, L.P. since November 1998. He served as Managing
Director/Executive Vice President of DHR, International,
Inc., an executive recruiting firm, from February 1995 to
November 1998. He was Executive Vice President, Operations,
of Steelcase, Inc., from April 1994 to January 1995. Mr.
Elston was President and Chief Executive Officer of GATX
Logistics, Inc. from 1990 through March 1994. He has been a
member of the Board of Directors of Southern Petroleum
Systems since January 1998.
Diana M. Murphy................ 42 Ms. Murphy has been a Director of the Company and LSHI since
February 1998. She has been a Partner in the investment firm
of Chartwell Capital Management Company since 1997. Ms.
Murphy was an associate with Chartwell Capital and served as
interim President for one of Chartwell's portfolio
companies, Strategic Media Research, Inc. in 1996. She was
Senior Vice President for Marketing and Advertising for The
Baltimore Sun, a division of Times Mirror Corporation from
1992 to 1995. Ms. Murphy is also a member of the Board of
Strategic Media Research, Inc.
</TABLE>
4
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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 1998 fiscal year, the Board held four regularly scheduled
meetings, one special meeting, and acted by unanimous written consent 19 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 an Audit Committee, a Compensation Committee, a
Nominating Committee, a Safety Committee and a Strategic Planning Committee 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 1998 are described below. The Board does not
have an Executive Committee.
AUDIT COMMITTEE
Members: Ronald W. Drucker, Merritt J. Mott and Diana M. Murphy
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
two meetings during 1998 and did not act by written consent in 1998.
COMPENSATION COMMITTEE
Members: David G. Bannister, William S. Elston 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 four regularly scheduled meetings and
did not act by written consent during 1998.
NOMINATING COMMITTEE
Members: Jeffrey C. Crowe, David G. Bannister and Ronald W. Drucker
The Nominating Committee functions include identifying persons for future
nomination for election to the Board of Directors. No meetings were held in
fiscal 1998 by the Nominating Committee. Stockholders who wish to submit names
to the Nominating Committee for consideration should do so in writing addressed
to the Nominating Committee, c/o Corporate Secretary, Landstar System, Inc.,
4160 Woodcock Drive, Jacksonville, Florida 32207.
5
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SAFETY COMMITTEE
Members: Jeffrey C. Crowe, David G. Bannister and Diana M. Murphy
The Safety Committee functions include the development and implementation
of safety goals and strategies to be implemented by the Company. No meetings
were held in fiscal 1998 by the Safety Committee.
STRATEGIC PLANNING COMMITTEE
Members: John B. Bowron, Ronald W. Drucker, William S. Elston and Diana M.
Murphy
The Strategic Planning Committee functions include the development of
strategic objectives and policies and procedures to achieve the strategic
objectives of the corporation. The Strategic Planning Committee solicits the
views of the Board of Directors and Senior Management and recommends strategic
directions to the Board for implementation. The Strategic Planning Committee
held two scheduled meetings during 1998.
6
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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............................ 64 See previous description under "Directors of the
Company."
Jeffrey C. Crowe.......................... 52 See previous description under "Directors of the
Company."
Henry H. Gerkens.......................... 48 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
subsidiaries (the "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
Contractor Financing, Inc. (a wholly-owned
subsidiary of LSHI) ("LCFI"), Risk Management Claim
Services, Inc., (a wholly-owned subsidiary of LSHI)
("RMCS"), Landstar Ranger, Landstar Corporate
Services, Inc. (an indirectly held subsidiary of
LSHI) ("LCSI"), 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"). He has also been Vice President of
Signature since February 1997. Mr. Gerkens was
Treasurer of the Company from April 1991 to January
1993.
Michael L. Harvey......................... 54 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
Subsidiaries, except Signature.
James R. Hertwig.......................... 47 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.
</TABLE>
7
<PG$PCN>
EXECUTIVE OFFICERS OF THE COMPANY (continued)
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE
---- --- -------------------
<S> <C> <C>
Robert C. LaRose.......................... 44 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
Subsidiaries. Mr. LaRose was Assistant Treasurer of
the Company from May 1991 to January 1993.
Robert C. Luminati........................ 58 Mr. Luminati has been Vice President and Chief
Information Officer of the Company since January
1997. He served as Vice President Management
Information Systems from January 1993 to 1997. He
held the same position at LSHI from August 1989 to
January 1993.
Joseph P. Fitzgerald...................... 51 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.
Gary W. Hartter........................... 57 Mr. Hartter has been President of Landstar Ranger
since January 1998. He has also been a Vice
President of LSHI since January 1998. Mr. Hartter
was Vice President of the Company effective
September 1997 but resigned in January 1998 to
become President of Landstar Ranger. From
September 1991 to November 1996 Mr. Hartter was
President of Trism Specialized, Inc.
James R. Martin........................... 59 Mr. Martin has been Vice President Corporate
Development of the Company since November 1998. Mr.
Martin was President of Landstar Poole, Inc. (a
wholly-owned subsidiary of LSHI) from March 1997
until August 1998. He has been a Vice President of
LSHI since October 1995, and was President of LCSI
from January 1994 until March 1997, and Assistant
Treasurer and Secretary of Landstar Ranger from
August 1995 through March 1997. He was Vice
President and Treasurer of Landstar Gemini from
February 1991 through March 1997. 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.
Jeffrey L. Pundt.......................... 48 Mr. Pundt has been President of Landstar Inway and
a Vice President of LSHI since June 1996. 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......................... 47 Mr. Stanley has been President of Landstar Express
America and a Vice President of LSHI since February
1996. He was Vice President-Marketing and Sales at
Roadway Global Air from June 1992 to January 1996.
</TABLE>
8
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS. During 1998, 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 received an award
of options (a "Term Award") to purchase an additional 12,000 shares of the
Company's Common Stock.
At a regularly scheduled meeting of the Board of Directors on December 9,
1998, the Board acted to approve a recommendation of the Compensation Committee
to reduce the number of shares available for a Term Award on an annual basis
from 12,000 options to 9,000 options to purchase shares of the Company's Common
Stock. The 1994 Directors Stock Option Plan has been amended to reflect this
reduction. Accordingly, Mr. Bannister, Nominee and eligible for election at the
annual meeting of shareholders, May 19, 1999 will receive 9,000 shares pursuant
to the 1994 Directors Stock Option Plan as amended. 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 other executive officers for services rendered to the
Company and its subsidiaries during the 1998, 1997 and 1996 fiscal years
(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............... 1998 $350,000 $980,000 $ 47,972 31,600 $ 63,925
Chairman of the Board, 1997 350,000 176,400 320,105 0 441,925
President & Chief 1996 350,000 0 13,920 0 11,925
Executive Officer
Henry H. Gerkens............... 1998 220,000 515,000 28,500 20,900 34,208
Executive Vice President & 1997 220,000 92,400 133,282 0 175,830
Chief Financial Officer 1996 175,000 0 9,537 0 6,858
Robert C. LaRose............... 1998 170,000 280,000 24,920 13,700 28,891
Vice President Finance & 1997 162,629 43,218 104,119 0 135,798
Treasurer 1996 147,000 0 7,740 0 4,838
Robert C. Luminati............. 1998 170,000 280,000 17,924 8,800 29,454
Vice President & Chief 1997 156,458 42,630 22,850 0 19,474
Information Officer 1996 119,000 0 5,740 0 6,125
James R. Hertwig............... 1998 180,000 200,000 4,722 13,400 3,934
Executive Vice President & 1997 170,000 57,800 3,241 0 1,234
President of Landstar 1996 170,000 0 10,889 2,500 12,429
Logistics & Landstar Gemini
</TABLE>
- - ---------------
(1) Amounts shown include any salary deferred at the election of the Named
Executive Officer under the Landstar 401(k) Savings Plan and/or the Landstar
Supplemental Executive Retirement Plan.
9
<PG$PCN>
(2) Amounts shown represent amounts reimbursed during the fiscal year for the
payment of taxes on behalf of the above Named Executives.
(3) Amounts for 1998 include contributions in the amount of $4,800 which were
made by the Company under the Landstar 401(k) Savings Plan on behalf of
Messrs. Crowe, Gerkens, LaRose and Luminati, and in the amount of $2,700 for
Mr. Hertwig and contributions made by the Company under the Landstar
Supplemental Retirement Plan on behalf of Mr. Crowe in the amount of $5,700,
Mr. Gerkens in the amount of $1,800, Mr. LaRose in the amount $300, and Mr.
Luminati in the amount of $100. Amounts for 1998 include the dollar value of
term life insurance premiums paid by the Company on behalf of Messrs. Crowe,
Gerkens, LaRose, Luminati and Hertwig in the amounts of $1,425, $1,608,
$428, $2,555 and $1,234, respectively. Amounts for 1998 also include
$52,000, $26,000, $20,800, and $22,000 which represents principal and
interest forgiven under loans extended to each of Messrs. Crowe, Gerkens,
LaRose, and Luminati, respectively, in connection with their relocation in
1997.
There were 183,300 options granted under the Company's 1993 Employee Stock
Option Plan in fiscal year 1998. The following table sets forth the number and
information about stock options granted in fiscal 1998 to each of the Named
Executives of the Company.
NUMBER OF SECURITIES UNDERLYING OPTIONS GRANTED
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
NO. OF SECURITIES % OF OF STOCK PRICE APPRECIATION
UNDERLYING TOTAL FOR OPTION TERM
OPTIONS OPTIONS EXERCISE ----------------------------
GRANTED(1) GRANTED PRICE EXPIRATION DATE 5% 10%
----------------- ------- -------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey C. Crowe........ 9,700 5.3% $28.110 Feb. 10, 2008 $171,479 $ 434,561
21,900 12.0% $38.953 Dec. 08, 2008 536,492 1,359,575
Henry H. Gerkens........ 6,600 3.6% $28.110 Feb. 10, 2008 116,676 295,681
14,300 7.8% $38.953 Dec. 08, 2008 350,312 887,759
Robert C. LaRose........ 4,400 2.4% $28.110 Feb. 10, 2008 77,784 197,120
9,300 5.1% $38.953 Dec. 08, 2008 227,825 577,354
Robert C. Luminati...... 2,700 1.5% $28.110 Feb. 10, 2008 47,731 120,960
6,100 3.3% $38.953 Dec. 08, 2008 149,434 378,694
James R. Hertwig........ 4,100 2.2% $28.110 Feb. 10, 2008 72,481 183,680
9,300 5.1% $38.953 Dec. 08, 2008 227,825 577,354
</TABLE>
(1) All the options granted shall become exercisable in five equal
installments on each of the first five anniversaries of the date of the
respective dates of grant, provided the executive is employed by the
Company on each such anniversary date.
The following table sets forth the number and value of all options
exercised by the Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
SHARES ACQUIRED VALUE
ON EXERCISE REALIZED(1)
--------------- -----------
<S> <C> <C>
Jeffrey C. Crowe................................. 50,000 $1,006,000
Henry H. Gerkens................................. 15,000 $ 301,800
Robert C. LaRose................................. 5,000 $ 100,600
James R. Hertwig................................. 6,500 $ 38,625
</TABLE>
- - ---------------
(1) The value realized for Messrs. Crowe, Gerkens, and LaRose represents the
difference between the fair market value of the shares acquired on exercise
as of December 16, 1998 and the exercise price of the option. The fair
market value was based upon the last reported sales price per
share of Common Stock as quoted on the National Association of Securities
Dealers, Inc. National Market System ("NASDAQ") on December 16, 1998. The
value realized for Mr. Hertwig represents the difference between the fair
market value of the shares acquired on the exercise of his options and
the exercise price of such options.
10
<PG$PCN>
The following table sets forth the number and value at December 26, 1998 of
all exercisable and unexercisable options held by each of the Named Executives.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 26, 1998 AT DECEMBER 26, 1998(1)
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jeffrey C. Crowe........................... 24,000 47,600 $423,000 $519,012
Henry H. Gerkens........................... 13,600 28,300 239,700 262,784
Robert C. LaRose........................... 7,200 17,500 126,900 158,641
Robert C. Luminati......................... 6,900(2) 10,900 139,113 96,402
James R. Hertwig........................... 5,000 21,900 87,250 257,111
</TABLE>
- - ---------------
(1) The value of in-the-money options represents the difference between the fair
market value of the shares acquired on exercise as of December 24, 1998 and
the exercise price of the option. The fair market value was calculated based
upon the last reported sales price per share of Common Stock as quoted on
the National Association of Securities Dealers, Inc. National Market System
("NASDAQ") in the Company's fiscal year ended December 26, 1998, which was
December 24, 1998.
(2) Mr. Luminati exercised 2,500 of these options on January 7, 1999.
Indebtedness of Management
In connection with the relocation of the Company's corporate headquarters
from Shelton, Connecticut to Jacksonville, Florida, the Company made loans to
Messrs. Crowe, Gerkens, and LaRose, in 1997, and to Mr. Luminati in 1998, in the
amounts of $200,000, $100,000, $80,000, and $80,000, 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. In
1998, the Company made loans to Messrs. Crowe, Gerkens and LaRose in the amounts
of $925,000, $277,500, and $92,500, in connection with the exercise of options
to purchase 50,000, 15,000 and 5,000 shares of the Company's Common Stock at
$18.50 per share, respectively. The Company also made loans to Messrs. Luminati
and Martin in the amounts of $46,250 and $92,500 for the exercise of options to
purchase 2,500 and 5,000 shares each of the Company's Common Stock in 1999. Each
loan bears interest at an annual rate of 7%. Interest on the loans will be
forgiven annually provided the executive is still employed by the Company.
Principal is repayable in a single lump sum on the fifth anniversary of the
loan.
Key Executive Employment Protection Agreements
On January 23, 1998, the Board approved the execution of the Key Executive
Employment Protection Agreements for Messrs. Crowe, Gerkens, LaRose, Luminati
and Hertwig and six other executives of the Company. Each agreement provides
certain severance benefits to Messrs. Crowe, Gerkens, LaRose, Luminati, Hertwig,
and such six other executives in the event of a change of control of the Company
(as defined in the agreements). Each agreement provides, generally, that if a
covered executive's employment is terminated by the Company without "cause" (as
defined in the agreements) or by the executive for good reason (as so defined),
in either such case, in connection with or within the two year period following
the change in control or if a covered executive terminates his employment for
any reason six months following the change in control, such executive will be
entitled to severance benefits consisting of a cash amount equal to three times
for Mr. Crowe, two times for Mr. Gerkens and one time for Messrs. LaRose,
Luminati, and Hertwig and the six other executives of the sum of (A) the
executive's annual base salary; and (B) the amount that would have been payable
to the executive as a target bonus for the year in which the change of control
occurs. Each agreement also provides for continuation of medical benefits and
for certain tax gross-ups to be made to a
11
<PG$PCN>
covered executive in the event payments to the executive are subject to the
excise tax on "parachute payments" imposed under Section 4999 of the Internal
Revenue Code of 1986.
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.
Mr. Crowe's last salary increase was January 1, 1996. In determining Mr.
Crowe's salary, the Compensation Committee took into account the Company's
overall performance.
Annual Bonus
The Company's executive officers were eligible to receive an annual cash
bonus under the Company's 1998 Incentive Compensation Plan (the "1998 ICP"). The
1998 ICP 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 1998 ICP were dependent
upon achievement of the consolidated earnings per share target. These
performance criteria were established at the beginning of 1998 by the
Compensation Committee.
In 1998, all executive officers, including the Named Executives, received
bonuses pursuant to the 1998 ICP. The Compensation Committee, in awarding these
bonus amounts, considered the overall Company's performance and the criteria
established at the beginning of the year.
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.
12
<PG$PCN>
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 5, 1999, Mr. Crowe owned 170,176 shares of the Company's Common
Stock and holds options to purchase an additional 82,400 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 $1 million paid to certain of its executive officers unless the
amount of such excess is payable based solely upon the attainment of objective
performance criteria. The Company has undertaken to qualify substantial
components of the incentive compensation it makes available to its executive
officers for the performance exception to nondeductibility. Stock option grants
under the Company's 1993 Employee Stock Option Plan currently meet these
requirements. In 1995, the Company received shareholder approval for the
Management Incentive Compensation Plan so that annual awards payable thereunder
would qualify for the performance exception under Section 162(m). The
Compensation Committee believes that tax deductibility of compensation is an
important factor, but not the sole factor, to be considered in setting executive
compensation policy. Accordingly, the Compensation Committee generally intends
to take such reasonable steps as are required to avoid the loss of a tax
deduction due to Section 162(m) but reserves the right to pay amounts which are
not deductible in appropriate circumstances.
Conclusion
Through the programs described, a very significant portion of the Company's
executive compensation is linked directly to significant thresholds of corporate
performance and stock price appreciation. The Company's 1998 results achieved
far exceeded the target criteria established in the 1998 ICP. As such, bonuses
were paid under the 1998 ICP. The Committee will continue to review all
executive compensation and benefit matters presented to it and will act based
upon the best information available to it and in the best interests of the
Company, its shareholders and employees.
Compensation Committee of the Board
David G. Bannister
William S. Elston
Merritt J. Mott
13
<PG$PCN>
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 in each of
the Company's Common Stock, the Standard & Poor's 500 Stock Index and the Dow
Jones Transportation Stock Index for the period commencing March 5, 1993 (the
date of the Company's initial public offering) through December 26, 1998.
<TABLE>
<CAPTION>
LANDSTAR S&P 500 DJ 20 TRANSPORTS
-------- ------- ----------------
<S> <C> <C> <C>
12/23/93 100.00 100.00 100.00
3/31/94 115.38 95.38 92.83
6/30/94 151.28 95.06 90.59
9/30/94 176.92 99.00 84.68
12/31/94 167.95 98.26 82.60
3/31/95 161.54 107.13 92.86
6/30/95 132.05 116.55 99.28
9/30/95 123.72 125.04 110.94
12/31/95 137.18 131.78 112.46
3/31/96 128.21 138.11 122.18
6/30/96 148.72 143.49 123.86
9/30/96 137.18 147.06 118.03
12/31/96 119.23 158.49 128.06
3/31/97 121.79 161.99 133.88
6/30/97 144.23 189.38 154.05
9/30/97 137.18 202.68 180.52
12/31/97 135.26 207.63 184.88
3/31/98 165.38 235.73 203.08
6/30/98 179.17 242.59 197.30
9/30/98 144.55 217.60 150.15
12/26/98 221.15 262.37 172.82
</TABLE>
14
<PG$PCN>
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 5, 1999, 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
NATURE OF OWNERSHIP
BENEFICIAL PERCENT 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).......... 1,284,600 12.5%
FMR Corp.(2)(4).................. 1,187,400 11.6%
(ii)
David G. Bannister(5)............ Director and Nominee for Director 29,960 *
Ronald W. Drucker(6)............. Director 25,000 *
Merritt J. Mott(7)............... Director 14,000 *
John B. Bowron................... Director 10,500 *
William S. Elston................ Director 300 *
Diana M. Murphy.................. Director 300 *
Jeffrey C. Crowe(8).............. Director and Nominee For
Director, Chairman, President and
Chief Executive Officer 196,116 1.9%
Henry H. Gerkens(9).............. Executive Vice President and
Chief Financial Officer 69,920 *
James R. Hertwig(10)............. Executive Vice President and
President of Landstar Logistics 5,820 *
Robert C. LaRose(11)............. Vice President, Finance and
Treasurer 54,080 *
Robert C. Luminati(12)........... Vice President and Chief
Information Officer 24,012 *
(iii)
All Directors and current
executive officers as a group
(17 persons) (13)(14).......... 488,848 4.7%
</TABLE>
- - ---------------
* Less than 1%
(1) The percentages are based upon 10,276,833 shares, which equal the
outstanding shares of the Company as of March 5, 1999. With respect to the
calculation of the percentages for beneficial owners who hold options
exercisable within 60 days of March 5, 1999, 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, and amended their Schedule 13G on
November 7, 1997, on February 10, 1998 and again on February 8, 1999. 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 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
15
<PG$PCN>
companies and institutional accounts. The Capital Group Companies, Inc.,
disclaims any investment power or voting power over any of the 1,284,600 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 1,200,800 of such
shares, or 11.7% 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 1,200,800 shares with
sole voting power over 1,085,800 of such shares. The remaining 83,800
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 11100
Santa Monica Boulevard, Los Angeles, California 90025-3302.
(4) According to an amendment, filed January 1, 1999 to its Schedule 13G (the
"FMR Schedule 13G"), FMR Corp. is the beneficial owner of 1,187,400 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
1,068,200 of such shares, or 10.4% 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. 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 901,200 of such shares, or
8.8% 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
1,068,200 shares owned by the Funds. Fidelity Management Trust Company
("Fidelity Management"), a wholly-owned subsidiary of FMR Corp.,
beneficially owns 119,200 shares, or 1.2% 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 voting and dispositive power over said
shares. 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) Includes 24,000 shares that may be acquired upon the exercise of options.
(6) 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 20,000 shares that may be acquired upon the
exercise of options.
(7) Includes 100 shares held in trust for Mr. Mott's son; 100 shares held in
trust for Mr. Mott's daughter; and 12,000 shares that may be acquired upon
the exercise of options.
(8) Includes 25,940 shares that may be acquired upon the exercise of options.
(9) Includes 14,920 shares that may be acquired upon the exercise of options.
(10) Represents shares that may be acquired upon the exercise of options.
(11) Includes 8,080 shares that may be acquired upon the exercise of options.
(12) Includes 4,940 shares that may be acquired upon the exercise of options.
(13) Represents amount of shares deemed to be beneficially owned either directly
or indirectly by all Directors and current executive officers as a group.
(14) Includes 149,820 shares that may be acquired upon the exercise of options.
16
<PG$PCN>
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 26, 1998, all Section 16(a) filing
requirements which are applicable to its officers, Directors and greater than
ten-percent beneficial owners were accomplished except the following.
During late 1997 and throughout 1998, Ronald G. Stanley, President of
Landstar Express America purchased approximately $8,000 worth of the Company's
Common Stock through the Company's 401(k) Plan and Mr. Stanley's Forms 5 with
respect to 1997 and 1998 reporting such purchases were inadvertently filed late.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of KPMG LLP served as independent auditors for the Company for the
fiscal year ended December 26, 1998. Pursuant to the recommendation of the Audit
Committee, the Board has appointed that firm to continue in that capacity for
fiscal year 1999, and recommends that a resolution be presented to shareholders
at the 1999 Annual Meeting to ratify that appointment. A representative of KPMG
LLP will be present at the 1999 Annual Meeting and will have an opportunity to
make a statement and respond to appropriate questions from shareholders.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
SHAREHOLDER PROPOSALS
In accordance with regulations issued by the SEC, shareholder proposals
intended for presentation at the 2000 Annual Meeting of Shareholders must be
received by the Secretary of the Company no later than November 19, 1999, if
such proposals are to be considered for inclusion in the Company's Proxy
Statement. In accordance with the Company's Bylaws, shareholder proposals
intended for presentation at the 2000 Annual Meeting of Shareholders that are
not intended to be considered for inclusion in the Company's Proxy Statement
must be received by the Secretary of the Company not later than 35 days prior to
the 2000 Annual Meeting of Shareholders. Proposals should be mailed via
certified mail and addressed to Michael L. Harvey, Secretary, Landstar System,
Inc., 4160 Woodcock Drive, Jacksonville, Florida 32207.
17
<PG$PCN>
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
/s/ Michael L. Harvey
Michael L. Harvey
Vice President,
General Counsel,
and Secretary
4160 Woodcock Drive
Jacksonville, FL 32207
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 26, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
ANY SUCH REQUEST SHOULD BE DIRECTED TO LANDSTAR SYSTEM, INC., ATTENTION: HENRY
H. GERKENS, INVESTOR RELATIONS, 4160 WOODCOCK DRIVE, JACKSONVILLE, FLORIDA
32207.
18
March 29, 1999
To the Shareholders of Landstar System, Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Landstar System, Inc. on Wednesday, May 19, 1999, at 10:00 a.m., local time, at
the Ponte Vedra Inn, Ponte Vedra Beach, Florida, 32082. A notice of the meeting,
a proxy card, the 1998 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
LANDSTAR SYSTEM, INC.
4160 WOODCOCK DRIVE, JACKSONVILLE, FL 32207
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 22, 1999, at
the Annual Meeting of Shareholders to be held on May 19, 1999 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>
This proxy when properly executed will be voted in accordance with the
specifications made herein by the undersigned shareholder. If no
direction is made, this proxy will be voted FOR Proposals 1 and 2.
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name below)
FOR all nominees listed to the right JEFFREY C. CROWE
(except as marked to the contrary) / / DAVID G. BANNISTER
WITHHOLD AUTHORITY to vote for all
nominees listed to the right / /
2. RATIFICATION OF THE APPOINTMENT OF KPMG LLP as independent
auditors of the Company for fiscal year 1999.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, each of the Proxies is authorized to vote upon such
other business as may properly come before the meeting or any adjournment
thereof.
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**
- - - --------------------------------------------------------------
FOLD AND DETACH HERE
