<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
U.S. XPRESS ENTERPRISES, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[US Xpress Logo]
2931 South Market Street
Chattanooga, Tennessee 37410
June 25, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of U.S.
Xpress Enterprises, Inc. to be held at 10:00 a.m. Eastern Daylight Time,
Wednesday, July 30, 1997, at the Chattanooga Marriott at the Convention Center,
2 Carter Plaza, Chattanooga, Tennessee 37402. The matters to be acted upon at
the meeting are described in detail in the attached Notice of Annual Meeting and
Proxy Statement.
Your vote is very important, regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, we urge you to sign,
date and mail the enclosed proxy card promptly in the accompanying postage
prepaid envelope. If you attend the meeting, you may vote your shares in
person, even though you have previously signed and returned your proxy.
Sincerely,
/s/ Patrick E. Quinn
Patrick E. Quinn
Co-Chairman of the Board of Directors
/s/ Max L. Fuller
Max L. Fuller
Co-Chairman of the Board of Directors
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
2931 South Market Street
Chattanooga, Tennessee 37410
-----------------------
Notice Of Annual Meeting Of Stockholders
To Be Held July 30, 1997
-----------------------
June 25, 1997
To The Stockholders of U.S. Xpress Enterprises, Inc.:
The Annual Meeting of Stockholders of U.S. Xpress Enterprises, Inc. (the
"Company") will be held at 10:00 a.m. Eastern Daylight Time, Wednesday, July 30,
1997 at the Chattanooga Marriott at the Convention Center, 2 Carter Plaza,
Chattanooga, Tennessee 37402, for the following purposes:
1. Elect seven Directors for the coming year.
2. Approve the Company's Employee Stock Purchase Plan.
3. Ratify the appointment of Arthur Andersen LLP as independent public
accountants for the 1998 fiscal year; and
4. Transact such other business that may properly come before the meeting or
any adjournment thereof.
The close of business on June 6, 1997 has been fixed as the record date for the
determination of stockholders entitled to notice of and to vote at the meeting
and any adjournment thereof.
A copy of the U.S. Xpress Enterprises, Inc. Annual Report for the 1997 fiscal
year is being mailed to stockholders with this Notice and Proxy Statement.
Whether or not you plan to attend the meeting, please mark, date and sign the
accompanying proxy and promptly return it in the enclosed envelope. If you
attend the meeting, you may vote your shares in person, even though you have
previously signed and returned your proxy.
By Order of the Board of Directors,
/s/ Max L. Fuller
Max L. Fuller
Secretary
-2-
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
2931 South Market Street
Chattanooga, Tennessee 37410
-----------------------
Proxy Statement
-----------------------
This proxy statement is being mailed to stockholders of U.S. Xpress Enterprises,
Inc., a Nevada corporation (the "Company"), on or about June 27, 1997 in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "Annual Meeting") of
the Company to be held at 10:00 a.m. EDT, Wednesday, July 30, 1997, at the
Chattanooga Marriott at the Convention Center, 2 Carter Plaza, Chattanooga,
Tennessee 37402.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies and will reimburse
brokers, custodians, nominees and fiduciaries for their reasonable expenses in
sending solicitation material to the beneficial owners of the Company's shares.
In addition to soliciting proxies through the mail, proxies may also be
solicited by officers and employees of the Company by telephone or otherwise.
Granting a proxy does not preclude the right of the person giving the proxy to
vote in person, and a person may revoke his or her proxy at any time before it
has been exercised, by giving written notice to the Secretary of the Company, by
delivering a later dated proxy or by voting in person at the Annual Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Company's Class A Common Stock, $.01 par value (the
"Class A Common Stock") and Class B Common Stock, $.01 par value (the "Class B
Common Stock"), is necessary to constitute a quorum at the Annual Meeting. If a
quorum is not present or represented at the Annual Meeting, the stockholders
entitled to vote, whether present in person or represented by proxy, have the
power to adjourn the Annual Meeting from time to time, without notice other than
announcement at the Annual Meeting, until a quorum is present or represented.
At any such adjourned Annual Meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the Annual Meeting as originally noticed.
On all matters submitted to a vote of the stockholders at the Annual Meeting or
any adjournment(s) thereof, each stockholder of Class A Common Stock will be
entitled to one vote for each share of Class A Common Stock owned and each
stockholder of Class B Common Stock will be entitled to two votes for each share
of Class B Common Stock owned of record at the close of business on June 6,
1997. The Class A Common Stock and Class B Common Stock vote together as a
single class.
Proxies in the accompanying form that are properly executed and returned will be
voted at the Annual Meeting and any adjournment(s) thereof in accordance with
the directions on such proxies. If no directions are specified, such proxies
will be voted according to the recommendations of the Board of Directors as
stated on the proxy.
Management knows of no other matters or business to be presented for
consideration at the Annual Meeting. If, however, any other matters properly
come before the Annual Meeting or any adjournment(s) thereof, it is the
intention of the persons named in the enclosed proxy to vote such proxy in
accordance with their best judgment on any such matters. The persons named in
the enclosed proxy may also, if they deem it advisable, vote such proxy to
adjourn the Annual Meeting from time to time.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On June 6, 1997, the record date for determining stockholders entitled to notice
of and to vote at the Annual Meeting, the Company had issued and outstanding and
entitled to vote 9,073,674 shares of Class A Common Stock and 3,040,262 shares
of Class B Common Stock. The following table sets forth information regarding
beneficial ownership of the Company's Class A and Class B Common Stock as of
June 6, 1997, except as otherwise noted, with respect to (i) each person known
by the Company to own beneficially more than five percent of the outstanding
shares of either class of common stock, (ii) each director and nominee, (iii)
the Co-Chairmen of the Board and the four other most highly compensated
executive officers who earned in excess of $100,000 during the 1997 fiscal year
and (iv) all directors and executive officers as a group:
-3-
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Amount and Nature of
Beneficial Ownership
-----------------------
Name of Beneficial Owner Class A Class B Percent/(1)(2)(3)/
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Max L. Fuller/(4)(6)/ 2,800,018 1,520,131 35.7
Patrick E. Quinn/(5)(6)/ 2,674,539 1,520,131 34.6
J.&W. Seligman and Co., Incorporated/(7)/ 1,449,889 - 12.0
William K. Farris/(1)/ 52,021 - *
E. William Lusk, Jr. /(1)/ 47,021 - *
James B. Baker/(1)(8)/ 5,508 - *
A. Alexander Taylor, II/(1)/ 4,008 - *
Thor N. Edman, Jr./(1)/ 3,333 - *
L. D. Miller, III/(1)(9)/ 3,333 - *
Ray M. Harlin - - -
All Executive Officers and Directors as a Group (Twelve Persons) 5,613,737 3,040,262 71.4
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1% of the Class A and Class B Common Stock.
(1) Share amounts include shares issuable pursuant to stock options that are
exercisable within 60 days of June 6, 1997 held by the following
individuals: Mr. Farris - 15,341 shares, Mr. Lusk - 10,341 shares, Mr.
Miller - 3,333 shares, Mr. Edman - 3,333 shares, Mr. Baker - 800 shares and
Mr. Taylor - 800 shares.
(2) Percentage reflects shares of both Class A and Class B Common Stock.
(3) For the purpose of computing the percentage of outstanding shares owned by
each beneficial owner, the shares issuable pursuant to presently
exercisable stock options held by such beneficial owner are deemed to be
outstanding. Such options are not deemed to be outstanding for the purpose
of computing the percentage owned by any other person.
(4) Does not include 444,916 shares of Class A Common Stock held by the Fuller
Family Partnership, as to which shares Mr. Fuller disclaims beneficial
ownership.
(5) Does not include 444,916 shares of Class A Common Stock held by the Quinn
Family Partnership, as to which shares Mr. Quinn disclaims beneficial
ownership.
(6) The principal business address for Messrs. Quinn and Fuller is 2931 South
Market Street, Chattanooga, Tennessee 37410.
(7) The principal business address of J. & W. Seligman and Co., Incorporated is
100 Park Avenue, New York, New York 10017. The reported information is
based upon the Schedule 13G filed by J. & W. Seligman and Co., Incorporated
with the Securities and Exchange Commission on February 13, 1997.
(8) Does not include 500 shares of Class A Common Stock held by Mr. Baker's
son, as to which shares Mr. Baker disclaims beneficial ownership.
(9) Does not include a total of 6,000 shares of Class A Common Stock held by
Mr. Miller's wife and two children, as to which shares Mr. Miller disclaims
beneficial ownership.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors currently consists of six members, but will expand to
seven members upon election of the nominees. All directors are elected for
one-year terms by the Company's stockholders and hold office until their
successors are elected and duly qualified. Executive officers of the Company
are appointed annually by the Board of Directors and serve at the Board's
discretion.
If any nominee for election as a director is unable to serve, which the Board of
Directors does not anticipate, the persons named in the proxy may vote for
another person in accordance with their judgment. All of the nominees, except
for Mr. Harlin, have previously served as directors of the Company. The names
and ages of the nominees, their principal occupations or employment during the
past five years and other data regarding them, based upon information received
from them, are as follows:
-4-
<PAGE>
NOMINEES FOR DIRECTORSHIPS
[PHOTO OF PATRICK E. QUINN APPEARS HERE]
PATRICK E. QUINN, 51, has served as Co-Chairman of the Board of the Company
since 1994 and President and Treasurer of the Company since 1985. Mr. Quinn also
serves as a director of Transcom Technologies, Inc. (telecommunications
company). Director of the Company since 1985.
[PHOTO OF MAX L. FULLER APPEARS HERE]
MAX. L. FULLER, 44, has served as Co-Chairman of the Board of the Company since
1994 and Vice President and Secretary of the Company since 1985. Mr. Fuller also
serves as a director of Transcom Technologies, Inc. (telecommunications
company). Director of the Company since 1985.
[PHOTO OF WILLIAM K. FARRIS APPEARS HERE]
WILLIAM K. FARRIS, 44, has served as Executive Vice President of Operations of
the Company and President of U.S. Xpress, Inc. since 1996. Previously, Mr.
Farris was Vice President of Operations from 1993-1996 and Vice President of
Operations for Southwest Motor Freight, Inc., a former Company subsidiary, from
1991 to 1993. Director of the Company since 1994.
[PHOTO OF E. WILLIAM LUSK, JR. APPEARS HERE]
E. WILLIAM LUSK, JR., 41, has served as Executive Vice President of Marketing
since 1996. Previously, Mr. Lusk was Vice President of Marketing of the Company
from 1991-1996 and Executive Vice President of U.S. Xpress, Inc., the Company's
largest operating subsidiary, from 1987 to 1994. Director of the Company since
1994.
[PHOTO OF RAY M. HARLIN APPEARS HERE]
RAY M. HARLIN, 47, joined the Company as Chief Financial Officer on June 15,
1997. Prior to joining the Company, Mr. Harlin served for 25 years in auditing
and managerial positions, and as a partner, with Arthur Andersen LLP.
[PHOTO OF A. ALEXANDER TAYLOR, II APPEARS HERE]
A. ALEXANDER TAYLOR, II, 44, has been a partner with the law firm of Miller &
Martin since 1983. Mr. Taylor also is a director of Chattem, Inc. (consumer
products company). Director of the Company since 1994.
[PHOTO OF JAMES B. BAKER APPEARS HERE]
JAMES B. BAKER, 51, has been a partner in River Associates, LLC since 1993.
Previously, Mr. Baker was employed by CONSTAR Inter-national, Inc. as a Senior
Vice President from 1988 to 1991 and as the President and Chief Operating
Officer from 1991 to 1992. Mr. Baker also is a director of Wellman, Inc.
(chemical company). Director of the Company since 1994.
DIRECTORS' MEETINGS
The Board of Directors held three meetings during the fiscal year ended March
31, 1997. Each director attended in person or by telephone all of the meetings
of the Board.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee and a Compensation
Committee. The functions of the Audit Committee are to meet with the
independent public accountants of the Company, to review the audit plan for the
Company, to review the annual audit of the Company with the accountants,
together with any other reports or
-5-
<PAGE>
recommendations made by the accountants, to recommend whether the auditors
should be continued as auditors of the Company and, if other auditors are to be
selected, to recommend the auditors to be selected. The Audit Committee is also
to review with the auditors for the Company the adequacy of the Company's
internal controls and to perform such other duties as shall be delegated to the
Committee by the Board of Directors. Messrs. Baker, Quinn and Taylor serve as
the members of the Audit Committee, with Mr. Taylor serving as Chairman.
The functions of the Compensation Committee are to recommend to the Board of
Directors policies and plans concerning the salaries, bonuses and other
compensation of the senior executives of the Company, including reviewing the
salaries of the senior executives; recommending bonuses, stock options and other
forms of additional compensation for them; establishing and reviewing policies
regarding management perquisites and performing such other duties as shall be
delegated to the Committee by the Board. Messrs. Baker, Fuller and Taylor serve
as the members of the Compensation Committee, with Mr. Baker serving as
Chairman.
The Audit Committee met two times and the Compensation Committee met one time
during the fiscal year ended March 31, 1997.
DIRECTOR COMPENSATION
Directors who receive no other compensation from the Company receive a $5,000
annual retainer, $1,000 for each Board meeting attended, and $1,000 for each
committee meeting that is not held in conjunction with a Board of Directors
meeting. In accordance with the terms of the 1995 Non-Employee Directors Stock
Award and Option Plan, each of the current non-employee directors has currently
elected to receive shares of the Company's Class A Common Stock in lieu of cash
compensation for their service on the Board. In addition, each non-employee
director is granted options to purchase 1,200 shares of Class A Common Stock on
the date he or she is elected. Options are assigned an exercise price equal to
the fair market value of the Company's Class A Common Stock as of the grant
date, and vest over a three-year period.
CERTAIN TRANSACTIONS
The information set forth herein briefly describes certain transactions between
the Company and certain affiliated parties. The Company believes that the terms
of these transactions, which were entered into prior to the establishment of the
Audit Committee of the Company's Board of Directors, are comparable to the terms
that could be obtained from unaffiliated parties. Future transactions, if any,
with affiliated parties will be approved by the Audit Committee and will be on
terms no less favorable to the Company than those that could be obtained from
unaffiliated parties.
Messrs. Quinn and Fuller together own 100% of Paragon Leasing, LLC ("Paragon").
Paragon purchases, sells and leases used tractors and trailers. In fiscal 1997,
the Company paid Paragon $679,048 in rent for leased trailers.
Messrs. Quinn and Fuller, together with the Quinn Family Partnership and the
Fuller Family Partnership, own approximately 41% of Transcommunications,
Incorporated ("Transcom"). Transcom operates a debit card system that is
marketed to, among others, truck drivers through which long distance phone calls
and Internet e-mail access can be debited to the customer's account. The
Company purchases $10 per month of telephone time per tractor for its drivers
through Transcom, in lieu of reimbursing drivers for telephone expenses. Total
payments by the Company to Transcom in fiscal 1997 were $142,919.
Six terminals used by the Company during fiscal 1997 are owned by Q&F Realty,
LLC and California Q&F Realty, LLC, of which Messrs. Quinn and Fuller own 100%
of the membership interests, and leased to the Company at, in management's
opinion, fair market rent. In the aggregate, rental payments to the LLCs from
the Company and its subsidiaries in fiscal 1997 were $1,639,000.
Substantially all of Messrs. Quinn and Fuller's business time is spent on the
Company's business and affairs. In the case of each of the other companies in
which Messrs. Quinn and Fuller own an interest, that company has other active,
full-time management personnel who operate that company's business.
During the 1997 fiscal year, the Company incurred fees for legal services to the
law firm of Miller & Martin, of which A. Alexander Taylor, II, a director of the
Company, is a partner.
COMPLIANCE WITH REPORTING REQUIREMENTS
Under the federal securities laws, the Company's directors, officers and persons
holding more than 10% of the Company's common stock are required to report,
within specified monthly and annual due dates, their initial ownership
-6-
<PAGE>
of common stock and all subsequent acquisitions, dispositions or other transfers
of beneficial interest therein, if and to the extent reportable events occur
which require reporting by such due dates. The Company is required to describe
in this proxy statement whether, to its knowledge, any person required to file
such a report may have failed to do so in a timely manner. In this regard, the
Company is aware that Max L. Fuller, Co-Chairman, inadvertently did not timely
file a Form 4 to disclose his acquisition of 10,000 shares of Class A Common
Stock of the Company during the month of May, 1996. A Form 4 dated August 8,
1996 was filed to report these transactions.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information concerning compensation paid or
accrued to the Co-Chairmen of the Board and the four other most highly
compensated executive officers of the Company for the past three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------- ----------------------------------
AWARDS PAYOUTS
--------------------- -------
RESTRICTED
STOCK LTIP ALL OTHER
NAME AND FISCAL SALARY BONUS AWARDS OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)/(1)/ ($)/(2)/ SARS($) ($) ($)/(3)/
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn 1997 500,000 2,500 -- -- -- 2,463
Co-Chairman, President 1996 500,000 2,500 -- -- -- 1,124
and Treasurer 1995 534,952 208,077 -- -- -- 473,163
Max L. Fuller 1997 500,000 2,500 -- -- -- 2,058
Co-Chairman, Vice President 1996 500,000 2,500 -- -- -- 1,811
and Secretary 1995 534,952 208,077 -- -- -- 449,480
L.D. Miller, III 1997 244,629 44,750 -- 10,000 -- 47,025
Chairman, CSI/Crown, Inc. 1996 211,578 29,500 -- -- -- 41,400
1995 228,089 3,324 -- -- -- 47,822
William K. Farris 1997 135,962 -- -- 10,000 -- 8,400
Executive Vice President - 1996 123,077 -- -- -- -- 5,600
Operations and President, 1995 107,981 30,523 -- -- -- --
U.S. Xpress, Inc.
E. William Lusk, Jr. 1997 135,962 3,090 -- 10,000 41,712 8,400
Executive Vice President - 1996 123,077 3,090 -- -- -- 6,114
Marketing 1995 107,981 33,612 -- -- -- 1,454
Thor N. Edman, Jr. 1997 124,900 3,210 -- 10,000 -- 8,400
President, CSI/Crown, Inc. 1996 72,116 2,049 -- -- -- 4,200
1995 -- -- ---- -- -- --
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts in 1997 represent a bonus to Mr. Miller of $40,000 and the
Company's contribution pursuant to the Company's 401(k) Plan of $2,500,
$2,500, $4,750, $3,090, and $3,210, for each of Messrs. Quinn, Fuller,
Miller, Lusk and Edman, respectively. Amounts in 1996 represent a bonus to
Mr. Miller of $25,000 and the Company's contribution pursuant to the
Company's 401(k) Plan of $2,500, $2,500, $4,500, $3,090 and 2,049 for each
of Messrs. Quinn, Fuller, Miller, Lusk and Edman, respectively. Amounts in
1995 represent the Company's contribution to a profit-sharing plan of
$205,403, $205,403, $30,705, and $30,523 for each of Messrs. Quinn, Fuller,
Farris and Lusk, respectively, and the Company's contribution pursuant to
the Company's 401(k) Plan of $2,675, $2,675, $3,324, and $2,907 for each of
Messrs. Quinn, Fuller, Miller and Lusk, respectively.
(2) Messrs. Lusk and Farris were each issued 55,021 shares of restricted stock
on November 30, 1993 at a price of $4.72 per share. The restrictions on
such shares lapse on one-third of the shares at each of the third, fourth
and fifth anniversary dates of issuance, except that the Board of Directors
approved the removal of restrictions on the first group of restricted
shares scheduled to vest in 1996 in order that such shares could be sold in
the Company's initial public offering. The restricted shares are entitled
to voting rights and to receive dividends, if any, as and when declared.
(3) Amounts in 1997 represent compensation for auto expenses of $1,458, $1,594,
$8,400, $8,400, $8,400 and $8,400 for each of Messrs. Quinn, Fuller,
Miller, Farris, Lusk and Edman, respectively, and life insurance premiums
of $1,005, $464 and $38,625 paid by the Company for Messrs. Quinn, Fuller
and Miller, respectively. Amounts in 1996 represent compensation for auto
expenses of $260, $1,463, $8,400, $5,600, $6,114, and $4,200 for each of
Messrs. Quinn, Fuller, Miller, Farris, Lusk and Edman, respectively, and
life insurance premiums of $864, $348 and $33,000 paid by the Company for
Messrs. Quinn, Fuller and Miller, respectively. Amounts in 1995 include an
annual payment of $406,875 for each of Messrs. Quinn and Fuller pursuant to
-7-
<PAGE>
a compensation arrangement in which the Company paid Messrs. Quinn and
Fuller .5% of the total amount of the Company's indebtedness and certain
future operating lease payments that were secured by their personal
guarantees. Upon completion of the Company's initial public offering in
October 1994, the annual salaries of Messrs. Quinn and Fuller were adjusted
to $500,000 each. Also as a result of the offering, the Company was able to
obtain the release of the personal guarantees of Messrs. Quinn and Fuller
on the Company's indebtedness and future operating lease commitments.
Accordingly, compensation related to such personal guarantees was
eliminated in January 1995. Messrs. Quinn and Fuller continue to
participate in the Company's profit-sharing plan. Amounts in 1995 also
include compensation for auto expenses of $6,065, $6,366, $8,400, and
$1,454 for each of Messrs. Quinn, Fuller, Miller and Lusk, respectively,
and life insurance premiums of $60,223, $36,239 and $39,422 paid by the
Company for each of Messrs. Quinn, Fuller and Miller, respectively.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named executives
concerning the exercise of options during the last fiscal year and unexercised
options held as of March 31, 1997:
<TABLE>
<CAPTION>
AGGREGATED EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
- -----------------------------------------------------------------------------------------------------------------------------
VALUE OF UNEXERCISED OPTIONS
SHARES VALUE NUMBER OF UNEXERCISED OPTIONS AT 3/31/97
ACQUIRED REALIZED AT 3/31/97 EXERCISABLE / UNEXERCISABLE
ON EXERCISE ($) EXERCISABLE / UNEXERCISABLE ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn -- -- -- --
Max L. Fuller -- -- -- --
L. D. Miller, III -- -- 3,333 / 6,667 23,747 / 47,502
William K. Farris -- -- 25,341 / 39,680 227,982 / 353,863
E. William Lusk, Jr. 5,000 40,150 20,341 / 39,680 181,582 / 353,863
Thor N. Edman, Jr. -- -- 3,333 / 6,667 23,747 / 47,502
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table shows information concerning the individual grants of stock
options made during fiscal 1997 to each of the named executive officers of the
Company and the potential realizable values of the grants assuming annually
compounded stock price appreciation rates of 5% and 10% per annum over the
option term. The 5% and 10% rates of appreciation are set by the rules of the
Securities and Exchange Commission and are not intended to forecast possible
future appreciation, if any.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ---------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
------------------------------------------------------------- ----------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn -- -- -- -- -- --
Max L. Fuller -- -- -- -- -- --
L.D. Miller, III 10,000 9.57 6.875 8/27/2006 111,987 $178,320
William K. Farris 10,000 9.57 6.875 8/27/2006 111,987 $178,320
E. Willliam Lusk, Jr. 10,000 9.57 6.875 8/27/2006 111,987 $178,320
Thor N. Edman, Jr. 10,000 9.57 6.875 8/27/2006 111,987 $178,320
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SALARY CONTINUATION AGREEMENT
Messrs. Quinn and Fuller have each entered into an agreement with the Company
pursuant to which the Company is obligated, in the event of either of their
deaths, to continue paying 50% of their current salary for a period of six
-8-
<PAGE>
months and, in the event of either of their disabilities, to continue paying
their current salary in full for a period of 12 months and 50% of their current
salary for an additional 12 months thereafter. The agreements also provide
that Messrs. Quinn and Fuller will receive payments on account of personal
guarantees of Company indebtedness at the current rate if either of them or
their estates personally guarantee any Company indebtedness.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is responsible for
establishing and recommending to the Board of Directors the Company's general
compensation policies. The Compensation Committee also administers the
Company's incentive stock plan and Xpre$$avings 401-k Plan. The Compensation
Committee is composed of three members, two of whom are independent, non-
employee directors.
The Compensation Committee seeks to provide fixed and incentive compensation of
the Company's executive officers that reflects each individual's performance
and the Company's overall performance. Fixed compensation is designed to: (a)
attract, motivate and retain executives committed to maximizing return to
stockholders; and (b) be competitive with the compensation levels of executives
holding comparable positions and having similar qualifications in comparable
transportation companies and in companies of similar size. Incentive
compensation is designed to: (a) provide rewards that are closely linked to the
Company and individual performance; and (b) align the interests of the
Company's employees with those of its stockholders. Incentive compensation is
provided through the Company's employee profit-sharing plan, incentive stock
plan and through existing stock options held by certain executive officers.
During fiscal 1997, the fixed compensation levels of the Co-Chairmen were
reviewed by the Committee and no increase was recommended. The Committee seeks
to maintain strong incentives for the Co-Chairmen to maximize financial
performance. As holders of nearly 70% of the Company's common stock, Messrs.
Quinn and Fuller have substantial incentives to maximize value to stockholders.
As an added incentive to maximize stockholder value during fiscal 1997, the
Committee awarded stock options under the Company's long-term incentive stock
plan to 16 other officers and managers of the Company.
Submitted by the Compensation Committee of the Company's Board of Directors,
James B. Baker, Chairman
Max L. Fuller, Member
A. Alexander Taylor, II, Member
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns to
stockholders of the Company, assuming reinvestment of dividends, for the period
commencing on October 5, 1994, the date of the Company's initial public
offering, including the last trading day of each succeeding quarter, and ending
on the last trading day of the 1997 fiscal year, with the return from: (i) the
NASDAQ U.S. Index and (ii) an Index for NASDAQ stocks in the Trucking and
Transportation Standard Industrial Classification.
Graph Artwork Goes Here]
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PROPOSAL 2: APPROVAL OF THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors adopted the Company's Employee Stock Purchase Plan (the
"Stock Purchase Plan") on April 1, 1997, subject to the approval of the
Company's stockholders. The Board of Directors believes that broad-based
ownership of equity interests in the Company by its employees provides a
substantial motivation for superior performance by more closely aligning the
economic interests of those employees with the overall performance of the
Company.
A majority of the votes of all shares present, represented and entitled to vote
is necessary for approval of this proposal. The Board of Directors recommends
that stockholders vote FOR approval of the Stock Purchase Plan. Unless
otherwise directed therein, the proxies solicited hereby will be voted for
approval of the Stock Purchase Plan.
The Stock Purchase Plan permits eligible employees of the Company and its
subsidiaries to purchase shares of the Common Stock from the Company by
electing to have the Company deduct a specific dollar amount per month from
their compensation. The minimum employee payroll deduction is $20.00 per month
and the maximum is 10% of the employee's compensation. Employees may also
participate by making lump sum payments to the Company to purchase shares of
Common Stock. Elections to participate in the Stock Purchase Plan are made for
specified periods referred to as "Option Periods." The first Option Period
will commence on July 1, 1997 and will end on December 31, 1997 if the Stock
Purchase Plan is approved by the Company's stockholders; if the Stock Purchase
Plan does not receive stockholder approval, all payroll deductions and lump sum
contributions made under the Stock Purchase Plan will be returned to the
employees. Each Option Period following stockholder approval will extend for a
period of six months, commencing either July 1 or January 1 of each year. At
the end of each Option Period, the Company will apply the amount deducted from
each employee's compensation plus any additional lump sum contributions made by
the employee to the purchase of shares of the Common Stock to be issued to the
employee. The purchase price for such shares will be the lower of: (i) 85% of
the closing market price on the first trading day of the Option Period or (ii)
85% of the closing market price on the last trading day of the Option Period.
No employee may purchase more than 1,250 shares per Option Period or shares of
Common Stock having a market value of more than $25,000 per calendar year
(measured as of the first trading day of the Option Period in which the shares
are purchased).
An employee may elect to participate twice each year in the Stock Purchase Plan
and must so elect prior to the beginning of an Option Period. An employee may
also at any time elect to withdraw from the Stock Purchase Plan and have the
employee's contribution returned to him or her, or to terminate his or her
participation for the remainder of an Option Period. Executive officers who
withdraw from the Plan or terminate their participation for any Option Period
are not eligible to participate until the next Option Period commencing at
least six months after such withdrawal or termination. If a participant's
employment with the Company or any of its subsidiaries is terminated for any
reason other than death, disability or retirement, the amount of the
participant's contributions to the Plan for the then-current Option Period will
be returned to the participant and the participant will no longer be entitled
to participate in the Plan. If the participant dies, becomes disabled or
retires, the participant or his or her legal representative may elect either to
withdraw all contributions of such participant to the Plan for the then current
Option period, or to have such contributions applied to the purchase of stock
at the end of such Option Period.
All employees of the Company and its subsidiaries (including executive officers
of the Company) who have been employed by the Company or its subsidiaries for
at least 20 hours per week for at least one year prior to the commencement of
an Option Period are eligible to participate in the Stock Purchase Plan for
such period. Directors of the Company who are not also employees of the
Company and holders of five percent or more of the Common Stock of the Company
are not permitted to participate in the Stock Purchase Plan. The Company and
its subsidiaries have approximately 2,475 employees who are currently eligible
to participate in the Stock Purchase Plan. All of the officers in the Summary
Compensation Table, other than Messrs. Fuller and Quinn, are eligible to
participate in the Stock Purchase Plan.
Rights under the Stock Purchase Plan are not transferable by the participant
except by will or the laws of descent and distribution and are exercisable
during the participant's lifetime only by the participant. Shares of Common
Stock acquired under the Stock Purchase Plan may not be sold for a period of
one year following the date of purchase.
The Stock Purchase Plan is intended to qualify for favorable tax treatment
under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). Pursuant to the Code, participants generally would not recognize
income for federal tax purposes in the amount of the initial discount when
shares are purchased. If the recipient of shares under the Stock Purchase Plan
disposes of the shares before the end of certain holding periods (essentially
the later of one year after the last day of the Option Period or two years
after the first day of the Option Period), he or she will generally recognize
ordinary income in the year of disposition in an amount equal to the difference
between his or her
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purchase price and the market value of the Common Stock on the last day of the
Option Period. If a disposition does not occur until after the expiration of
the holding periods, the recipient will generally recognize ordinary income in
the year of disposition equal to the lesser of (a) 15% of the market value of
the Common Stock on the first day of the Option Period or (b) the excess of the
fair market value of such shares on the date of disposition over the price paid
by the recipient on the last day of the Option Period. The Company generally
will not be entitled to a tax deduction for compensation expense on account of
the original sales to participants, but may be entitled to a deduction if a
participant disposes of stock received under the Stock Purchase Plan prior to
the expiration of the holding periods.
The Board of Directors may amend or terminate the Stock Purchase Plan except as
provided below. Without the approval of the stockholders of the Company, the
Stock Purchase Plan may not be amended to: (i) increase the number of shares
reserved under the Stock Purchase Plan (except pursuant to certain changes in
the capital structure of the Company), (ii) extend the duration of the Plan,
(iii) materially increase the benefits accruing to executive officers, (iv)
reduce the purchase price of the shares or (v) change the requirements for
eligibility for participation in the Plan. No amendment of the Plan by the
Board of Directors may adversely affect any rights previously granted under the
Plan without the consent of the holder thereof. The Plan will terminate on the
earlier of: (i) the date on which no shares of Common Stock remain reserved
for issuance under the Plan, (ii) the termination of the Plan by the Board of
Directors or (iii) July 1, 2002.
The Company has reserved 300,000 shares of Common Stock for issuance under the
Plan. The number of shares authorized for issuance under the Plan will be
appropriately adjusted in the event of certain changes in the capital structure
of the Company. The closing sales price per share of Common Stock on The
NASDAQ National Market on June 6, 1997 was $19.25.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
appointed Arthur Andersen LLP, independent public accountants, to serve as the
Company's auditors for the fiscal year ending March 31, 1998. Although
stockholder ratification is not required by the Company's articles of
incorporation or by-laws, or under applicable law, the Board of Directors
requests stockholder ratification.
A representative of Arthur Andersen LLP will be present at the Annual Meeting
and will be given an opportunity to make a statement, if he desires, and to
respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual Meeting
must be received by the Company not later than February 28, 1998, for inclusion
in its Proxy Statement and form of proxy relating to that meeting. Any such
proposals, as well as any questions relating thereto, should be directed to Max
L. Fuller, Secretary, U.S. Xpress Enterprises, Inc., 2931 South Market Street,
Chattanooga, Tennessee 37410.
June 25, 1997
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[U.S. Xpress Logo]
2931 South Market Street
Chattanooga, Tennessee 37410
