UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
J.B. Hunt Transport Services, Inc.
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(Name of Registrant as Specified In Its Charter)
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[J.B. HUNT LOGO]
J. B. HUNT TRANSPORT SERVICES, INC.
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 2002 AT 10:00 A.M.
The Annual Meeting of Stockholders of J.B. Hunt Transport Services,
Inc. (the "Company") will be held April 25, 2002 at 10:00 a.m. (CDT) at the
Company's headquarters, located at 615 J. B. Hunt Corporate Drive, Lowell,
Arkansas for the following purposes:
(1) To elect (4) four Class I Directors for a term of (3) three years
each.
(2) To ratify the appointment of KPMG LLP as the Company's principal
independent public accountants for the next fiscal year.
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record on February 28, 2002 will be entitled to
vote at the meeting or any adjournments thereof. The stock transfer books will
not be closed.
A copy of the 2001 Annual Report to Stockholders is enclosed.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to be present, the Board of Directors requests that you
promptly complete, sign, date and mail the enclosed proxy. If you attend the
meeting, you may vote either in person or by your proxy.
By Order of the Board of Directors
JOHNELLE D. HUNT
Secretary
Lowell, Arkansas
March 15, 2002
YOUR VOTE IS IMPORTANT. PLEASE DATE, SIGN AND RETURN
YOUR PROXY WITHOUT DELAY.
[J.B. HUNT LOGO]
J. B. HUNT TRANSPORT SERVICES, INC.
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PROXY STATEMENT
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SUMMARY TERM SHEET
This summary highlights selected information from this Proxy Statement and
may not contain all of the information that is important to you. To better
understand the nominees being solicited for directors and the appointment of
KPMG LLP as our independent auditors, you should carefully read this entire
document, its attachments and other documents to which we refer.
WHEN AND WHERE IS THE ANNUAL MEETING?
Date: Thursday, April 25, 2002
Time: 10:00 a.m., Central Daylight Time
Location: J.B. Hunt Transport Services, Inc.
Corporate Offices, Auditorium
615 J.B. Hunt Corporate Drive
Lowell, Arkansas
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's Annual Meeting, stockholders will act upon matters
outlined in the accompanying Notice of Meeting, including the election of
directors and ratification of the Company's independent auditors. In addition,
the Company's management will report on the performance of the Company during
fiscal year 2001.
WHO IS ENTITLED TO VOTE?
Only stockholders of record at the close of business on the record date,
February 28, 2002, are entitled to receive Notice of the Annual Meeting and to
vote the shares of common stock that they held on that date at the meeting or at
any postponement or adjournment of the meeting. Each outstanding share entitles
its holder to cast one vote on each matter to be voted on.
WHO CAN ATTEND THE MEETING?
All stockholders as of the record date, or their duly appointed proxies,
may attend the meeting and each may be accompanied by one guest. Seating,
however, is limited. Admission to the meeting will be on a first-come,
first-served basis. Registration will begin at 9:30 a.m. and seating will be
available at approximately 9:30 a.m. Cameras and recording devices will not be
permitted at the meeting.
Please note that if you hold your shares in "street name" (that is, through
a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date and check in at
the registration desk at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the Company to conduct its business. As of the
record date, 36,336,471 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the number of shares considered to be present at the
meeting.
HOW DO I VOTE?
The enclosed proxy card indicates the number of shares that you own. If you
complete and properly sign the accompanying proxy card and return it to the
Company, it will be voted as you direct. If you attend the meeting, you may
deliver your completed proxy card in person.
Proxies duly executed and returned by a stockholder, and not revoked prior
to or at the meeting, will be voted in accordance with the instructions thereon.
CAN I VOTE BY TELEPHONE?
If you are a registered stockholder (that is, if you hold stock in your own
name), you may vote by telephone by following the instructions included with
your proxy card.
If your shares are held in "street name," you will need to contact your
broker or other nominee to determine whether you will be able to vote by
telephone.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendations
of the Board of Directors. The Board's recommendation is set forth together with
the description of each item in this Proxy Statement. In summary, the Board
recommends a vote:
o FOR election of the nominated slate of directors (see pages 4 - 5).
o FOR ratification of the appointment of KPMG LLP as the Company's
independent auditors (see page 20).
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
2
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
o ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of
one or more directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of
determining whether there is a quorum.
o OTHER ITEMS. For each other item, the affirmative vote of the holders of a
majority of the shares represented in person or by proxy and entitled to
vote on the item will be required for approval. A properly executed proxy
marked "ABSTAIN" with respect to any such matter will not be voted,
although it will be counted for purposes of determining whether there is a
quorum. Accordingly, an abstention will have the effect of a negative vote.
If you hold shares in "street name" through a broker or other nominee, your
broker or nominee may not be permitted to exercise voting discretion with
respect to some of the matters to be acted upon. Thus, if you do not give your
broker or nominee specific instructions, your shares may not be voted on those
matters and will not be counted in determining the number of shares necessary
for approval. Shares represented by such "broker non-votes" will, however, be
counted in determining whether there is a quorum.
CAN I CHANGE MY VOTE AFTER I RETURN THE PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
YOU SHOULD CAREFULLY READ THIS PROXY STATEMENT
(INCLUDING THE ATTACHMENTS) IN ITS ENTIRETY
FORWARD-LOOKING STATEMENTS
This Proxy Statement may contain forward-looking statements. Additional
written or oral forward-looking statements may be made by us from time to time
in filings with the Securities and Exchange Commission (the "SEC") or otherwise.
The words, "believe", "expect", "anticipate", "estimate", "project", and similar
expressions identify forward-looking statements, which speak only as of the date
the statement was made. Forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified. Future
events and actual results could differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements. Statements in
this Proxy Statement describe factors that could contribute to or cause such
differences.
3
REPORT OF ACTION TAKEN AT PRIOR ANNUAL MEETING
OF STOCKHOLDERS ON APRIL 26, 2001
The 2001 Annual Meeting was held on April 26, 2001. At that meeting 91.45
percent of the eligible shares were voted. Results of the Proposals brought
before the stockholders follow:
o PROPOSAL ONE - Class III nominees for the Board of Directors were elected
by a vote of 98.59 percent of the total shares voted.
o PROPOSAL TWO - Ratification of the appointment of KPMG LLP as the Company's
independent auditors for the next fiscal year was approved by a vote of
98.05 percent of the total shares voted.
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PROPOSAL ONE
ELECTION OF DIRECTORS
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The Board of Directors is currently divided into three classes, each having
three-year terms that expire in successive years. The term of office of
directors in Class I expires at the 2002 Annual Meeting. The Board of Directors
proposes that the nominees described below be re-elected to Class I for a new
term of three years and until their successors are duly elected and qualified.
All are currently serving as Class I directors.
Each of the nominees has consented to serve a three-year term. If any of
them should become unavailable to serve as a director, the Board may designate a
substitute nominee. In that case, the persons named as proxies will vote for the
substitute nominee designated by the Board.
It is intended that the shares represented by the accompanying proxy will
be voted at the 2002 Annual Meeting for the election of all nominees. Each
nominee has indicated his/her willingness to serve as a member of the Board, if
elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR
EACH OF THE NOMINEES LISTED HEREIN
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PROFILES OF DIRECTORS AND NOMINEES
NOMINEES FOR DIRECTOR:
CLASS I - TERM EXPIRES APRIL 2002
JOHNELLE D. HUNT DIRECTOR SINCE 1993
Mrs. Hunt, age 70, is Secretary of the Company. Serving as Credit Manager
from 1962 to 1987, she was elected Secretary-Treasurer in 1972 and served
in that capacity until October 1988 at which time she was elected
Secretary.
KIRK THOMPSON DIRECTOR SINCE 1985
Mr. Thompson, age 48, is President and Chief Executive Officer of the
Company. Mr. Thompson, a certified public accountant, joined the Company in
1973. In 1979, he served as Vice President of Finance until 1984, Executive
Vice President and Chief Financial Officer until 1985, President and Chief
Operating Officer from 1986 until 1987 when he was elected President and
Chief Executive Officer.
LELAND E. TOLLETT DIRECTOR SINCE 2001
Mr. Tollett, age 65, is a private investor. With the resignation of Lloyd
Peterson on February 15, 2001, the Company's board of directors nominated
Mr. Tollett to serve as interim director and will seek formal election to
the board by the stockholders of the Company at the 2002 Annual Meeting. He
served as Chairman of the Board and Chief Executive Officer of Tyson Foods,
Inc, from 1995 to 1998 when he retired and became a consultant to that
company. A Tyson Foods employee since 1959, he also served as President and
Chief Executive Officer from 1991 to 1995. He first became a board member
of Tyson Foods, Inc. in 1984 and continues to serve in that capacity.
JOHN A. WHITE DIRECTOR SINCE 2000
Dr. White, age 62, is Chancellor of the University of Arkansas, a position
he assumed on July 1, 1997. Prior to joining the University, he served as
Dean of Engineering at the Georgia Institute of Technology in Atlanta for
six years. A graduate of the University of Arkansas (BSIE), Virginia Tech
(MSIE) and The Ohio State University (PhD), he also holds honorary
doctorates from the Katholieke Universitiet of Leuven in Belgium and from
George Washington University. Dr. White is a member of the National Academy
of Engineering, past president of the National Consortium for Graduate
Degrees for Minorities in Engineering and Science, Inc., past chairman of
the American Association of Engineering Societies and past president of the
Institute of Industrial Engineers. He also serves on the Board of Directors
for Eastman Chemical Company, Motorola, Inc., Russell Corporation,
Logility, Inc. and the National Science Foundation.
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DIRECTORS WHOSE TERM OF OFFICE CONTINUE
CLASS II - TERM EXPIRES APRIL 2003
GENE GEORGE DIRECTOR SINCE 1961
Mr. George, age 79 is Chairman of the Board of George's Inc. (an integrated
poultry company). He also serves on the Board of Directors for the First
National Bank of Springdale.
THOMAS L. HARDEMAN DIRECTOR SINCE 1994
Mr. Hardeman, age 64, is President of BTTB Investments, a private
investment company. Retiring from United Parcel Service after 35 years, he
served as Corporate Vice President from 1984 until his retirement in April
1994. He is the former Chairman of the Advisory Board for the Commercial
Vehicle Safety Alliance, former board member of the Professional Truck
Driver Institute of America, and served on the American Legislative
Exchange Council and the State Government Affairs Council.
J. B. HUNT DIRECTOR SINCE 1961
Mr. Hunt, age 75, is Senior Chairman of the Board of Directors of the
Company. Founder of the J.B. Hunt Company in 1961, he served as Chairman of
the Board from 1982 until May 16, 1995. Mr. Hunt also serves on the Board
of Directors of the University of Denver Intermodal Transportation
Institute.
CLASS III - TERM EXPIRES APRIL 2004
JOHN A. COOPER, JR. DIRECTOR SINCE 1990
Mr. Cooper, age 63, is Chairman of the Board, Chief Executive Officer and
President of Cooper Communities, Inc. (a private community development
company).
BRYAN HUNT DIRECTOR SINCE 1991
Mr. Hunt, age 43, serves as Vice Chairman of the Company and is the
President of Best Motor Company. He was appointed Vice Chairman of the
Board in May 1991. He served as Assistant Secretary of the Company from
October 1988 until May 2000. From 1995 until his retirement from the
Company in 1997, he served separate terms as the Company's Chief Operating
Officer of the Van Division and Treasurer.
WAYNE GARRISON DIRECTOR SINCE 1981
Mr. Garrison, age 49, assumed the responsibilities of Chairman of the Board
May 16, 1995. In 1976 he joined the Company as Plant Manager. He has also
served the Company as Vice President of Finance in 1978, Executive Vice
President in 1979, President in 1982, Chief Executive Officer in 1987 and
Vice Chairman of the Board from January 1986 to May 1991.
Under the terms of the Company's articles and Arkansas law, the Board of
Directors can fix or change the number of directors by up to 30% of the number
of directors last approved by the stockholders.
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Each of the foregoing nominees is currently serving as a director of the
Company. Johnelle Hunt is the wife of J. B. Hunt and Bryan Hunt is the son of J.
B. and Johnelle Hunt. There are no other family relationships among the
foregoing directors.
WHAT ARE THE DUTIES OF THE BOARD?
The Board of Directors has the responsibility to serve as the trustee for
the stockholders. It also has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. The Board,
however, is not involved in day-to-day operating details. Members of the Board
are kept informed of the Company's business through discussion with the Chief
Executive Officer and other officers, by reviewing analyses and reports sent to
them each month and by participating in Board and Committee meetings.
HOW ARE DIRECTORS COMPENSATED?
During the Company's fiscal year ended December 31, 2001, each director who
was not a salaried officer or employee of the Company was paid $4,250 for each
board meeting attended, $1,000 for each committee meeting attended and $2,000
for each committee meeting chaired and received an annual retainer of $20,000
paid in Company stock.
HOW OFTEN DID THE BOARD MEET DURING FISCAL YEAR 2001?
The Board of Directors met six times during the 2001 fiscal year. During
this period all members of the Board participated in at least 75% of all
meetings including the Annual Meeting. The business of the Company is managed
under the direction of the Board of Directors, which meets on a regularly
scheduled basis during its fiscal year to review significant developments
affecting the Company and to act on matters, which require Board approval.
Special meetings are also held when Board action is required on matters arising
between regularly scheduled meetings.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
For the fiscal year ending December 31, 2001, the Board of Directors had
the following committees:
o AUDIT, comprised of John White, Chairman, Gene George and Leland E. Tollett
o COMPENSATION, comprised of John A. Cooper, Jr., Chairman, Gene George and
Tom Hardeman
o NOMINATING, comprised of Tom Hardeman, Chairman, John A. Cooper, Jr., and
Leland E. Tollett
o EXECUTIVE, comprised of J.B. Hunt, Chairman, Bryan Hunt, Wayne Garrison,
Gene George, and Kirk Thompson
Members of the committees are appointed annually by the Board and serve
until their successors are appointed or their earlier resignation or removal.
7
The AUDIT COMMITTEE functions are focused primarily on three areas: (1) the
scope and adequacy of the Company's internal controls and financial reporting
processes and the reliability of the Company's financial statements, (2) the
independence and performance of the Company's independent auditors and (3) the
Company's compliance with legal and regulatory requirements related to the
filing and disclosure of quarterly and annual financial statements of the
Company. All members of the Audit Committee satisfy the requirements of
independence as set forth in the Audit Committee Policy of the SEC. The Audit
Committee met five times in fiscal year 2001. For additional information
concerning the Audit Committee, see "Report of the Audit Committee."
The COMPENSATION COMMITTEE determines the compensation of senior management
of the Company. Additionally, the Compensation Committee administers the
compensation, stock incentive and benefit plans of the Company. None of the
individuals serving on the Compensation Committee have ever been an officer or
employee of the Company. The Compensation Committee met once in fiscal year
2001. All of the members attended at least 75% of the meetings of this
committee. For additional information concerning the Compensation Committee, see
"Report of the Compensation Committee."
The NOMINATING COMMITTEE reviews the qualifications of potential Board
candidates, from whatever source received, and propose nominations for Board
membership. Nomination of potential Board candidates may be directed to the
Nominating Committee, in care of the Corporate Secretary of the Company at the
address stated herein. The Nominating Committee met once in fiscal year 2001.
The EXECUTIVE COMMITTEE has broad power to act for and on behalf of the
Board of Directors between the regularly scheduled meetings of the Board of
Directors. The Executive Committee held no meetings in fiscal year 2001.
SECTION 16(b) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires each director, officer and
individual beneficially owning more than 10% of a registered security of the
Company, to file with the SEC reports of security ownership and reports on
subsequent changes in its ownership of the Company's securities. Reporting
persons are required to furnish the Company with copies of all Section 16(b)
forms filed with the SEC.
Based upon the Company's review of the reports furnished to the Company
pursuant to Section 16 of the Exchange Act, to the best of the Company's
knowledge, late filings for Messrs. Bergant, Harper, Matthews, Thompson and
Walton occurred during fiscal year 2001.
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PRINCIPAL STOCKHOLDERS OF THE COMPANY
HOW MUCH STOCK DOES THE COMPANY'S DIRECTORS AND OFFICERS OWN?
The authorized Common Stock of the Company consists of 100,000,000 shares,
$.01 par value. As of the close of business on February 28, 2002 there were
36,336,471 shares outstanding held by 1,440 stockholders of record.
The following table lists as of February 28, 2002, all persons known to be
the beneficial owner of more than five percent of the Company's Common Stock, by
each director of the Company, and by each named executive officer (Tables I, II
and III), and by all officers and directors as a group.
BENEFICIAL OWNERSHIP
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DIRECTORS AND OFFICERS SHARES PERCENT(9)
---------------------- --------- ---------
J.B. Hunt (1) 8,563,583 23.6%
Wayne Garrison (2) 1,982,595 5.4
John A. Cooper, Jr. 12,734 *
Gene George (3) 627,291 1.7
Thomas L. Hardeman 6,234 *
Bryan Hunt (4) 18,318 *
Johnelle Hunt (5) 3,374,933 9.3
Paul Bergant (6) 213,037 *
Kirk Thompson 139,811 *
Leland E. Tollett 1,142 *
Jerry W. Walton (7) 116,965 *
John A. White 5,376 *
All executive officers and directors 15,254,938 42.0%
as a group (21 persons) (8)
*Represents less than 1 percent of the Company's outstanding common stock
OTHER PRINCIPAL STOCKHOLDERS
Dimensional Fund Advisors (10) 2,338,100 6.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
9
(1) Mr. Hunt's address is 615 J.B. Hunt Corporate Drive, Lowell, Arkansas
72745. Includes 8,423,384 shares owned by Mr. and Mrs. Hunt in a family
limited liability company in which they are co-managers.
(2) Includes shares owned by immediate family.
(3) Includes an indirect 25% beneficial ownership interest through a family
limited partnership that owns 730,989 shares which equals 182,747 shares
and the ownership of 444,544 shares in another family limited partnership.
Mr. George disclaims the beneficial ownership of the 182,747 shares
described above and listing such shares shall not be construed as an
admission that Mr. George is the owner of such shares for purposes of
Sections 13(d) or 13(g) of the Securities Exchange Act of 1934.
(4) Includes options to purchase 4,800 shares exercisable as of February 28,
2002.
(5) Includes 3,371,822 shares owned by Mr. and Mrs. Hunt in a family limited
liability company in which they are co-managers.
(6) Includes options to purchase 56,860 shares exercisable as of February 28,
2002.
(7) Includes 33,099 shares held in trusts in which Mr. Walton is designated as
the trustee but claims no beneficial interest, and options to purchase
17,200 shares exercisable as of February 28, 2002.
(8) Includes options to purchase 153,526 shares exercisable as of February 28,
2002.
(9) The percentages are based on 36,336,471 shares, which equal the outstanding
shares of the Company as of February 28, 2002.
(10) Based on a Schedule 13G filed by the indicated party. In said filing,
beneficial ownership was disclaimed by Dimensional Fund Advisors. The
amounts and percentages of shares were reported to the Company on February
2, 2001.
10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Report of the Compensation Committee and the performance
graphs included elsewhere in this Proxy Statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report or the performance graphs by reference therein.
REPORT OF THE COMPENSATION COMMITTEE
THE COMPENSATION COMMITTEE
Compensation of officers and senior executives of the Company is determined
by the Compensation Committee of the Board of Directors (the "Committee"). The
Committee, comprised entirely of outside directors, meets (1) to fix annual
salaries in advance and bonuses for the current year of senior executives, (2)
to review annual goals and reward outstanding annual performance of executives,
(3) to grant stock options pursuant to the Company's stock option plans, (4) to
establish and certify the achievement of performance goals under the Company's
Management Incentive Plan, and (5) review the Company's benefit plans. In
October 2001, the Committee retained William M. Mercer, Inc. to review certain
of its executive compensation policies and practices. The Committee met to
discuss the salaries, bonuses and other compensation of the officers and senior
executives of the Company, including the Chairman and Chief Executive Officer.
GENERAL COMPENSATION POLICY
The executive compensation package has three main components: (1) base
salary, which is reviewed annually, (2) performance-based bonuses that are
directly tied to the Company's earnings per share and are earned annually
depending on the achievement of pre-established performance-based goals, and (3)
incentive awards. This mix of compensation elements places more of total
compensation at risk and emphasizes performance.
The Committee believes that competitive levels of cash compensation,
together with equity and other incentive programs, are necessary for the
attraction, motivation and retention of the highest caliber employees.
BASE SALARY
Executives' base salaries are based on the Company's performance for the
prior fiscal year and upon a subjective evaluation of each executive's
contribution to that performance. In evaluating overall Company performance, the
primary focus is on the Company's earnings per share.
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PERFORMANCE-BASED BONUS
Performance cash bonuses are awarded quarterly to executives based on the
Company's earnings per share. The amount of the bonus paid is a percentage of
the executive's salary. The bonus increases as a percentage of base salary as
the Company's earnings per share improves.
INCENTIVE AWARDS
Incentive payments are made under the Company's Management Incentive Plan.
As a person's level of responsibility increases, a greater portion of potential
total compensation opportunity is shifted from salary to performance-based
incentives and to greater reliance on growing total return to stockholders
through stock-based awards. This directly aligns the interest of management with
stockholders.
To motivate the Company's employees to emulate its stockholders, the
Company has implemented the following guidelines of stock ownership over a
five-year period:
Position Ownership Multiple of Base Salary
-------- ---------------------------------
Chief Executive Officer 5 times
Executive Vice Presidents 3 times
Group Presidents, Senior Vice Presidents
and Vice Presidents of Operations 2.5 times
Vice Presidents, Terminal Managers,
Regional Operations Managers 2 times
SENIOR CHAIRMAN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee has tried to set base salary and overall compensation for
Messrs. Hunt, Garrison and Thompson competitively with companies of similar size
and aligned with companies which lead their respective industries. The goal is
to reward these executives for corporate performance in line with the interests
of the stockholders.
Messrs. Hunt and Garrison did not participate in the bonus plan for fiscal
year 2001 and, therefore, received no bonus. Mr. Garrison will participate in
the Company's bonus plan for fiscal year 2002. The cash bonus paid to Mr.
Thompson in fiscal year 2001 was determined by the previously mentioned formula
relating bonuses to earnings per share.
In accordance with the Committee's policy of aligning executive interest
with the interest of stockholders, Mr. Thompson was granted a stock option of
75,000 shares in fiscal year 2001 which will vest over a ten-year period. No
stock options were granted to Messrs. Hunt and Garrison in fiscal year 2001.
Messrs. Hunt, Garrison and Thompson's cash compensation is comparable to
the NASDAQ peer group and other transportation company peer groups.
Additionally, they each participate in the Company's profit sharing plan.
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2002 PERFORMANCE-BASED COMPENSATION
For fiscal year 2002, the Company has established a cash bonus program for
the above named executives that is in direct correlation to earnings per share.
TAX DEDUCTIBILITY
The Company's incentive bonus and stock incentive plans are designed to be
performance-based plans as defined in the Internal Revenue Code of 1986, as
amended. Therefore, under Internal Revenue Code Section 162(m), compensation
paid in 2001 under these plans is intended to be fully deductible and it is our
intention to continue to maximize deductibility to the extent practicable.
OUR CONCLUSION
We firmly believe that the quality and motivation of all of the Company's
employees, including its managers, make a significant difference in the
Company's long-term performance. We also believe that stockholders directly
benefit from compensation programs that:
o Reward superior performance;
o contain an appropriate downside risk element when performance falls short
of clearly-defined standards;
o give appropriate administrative flexibility to achieve their objectives.
We believe that the Company's management compensation program meets these
requirements and will continue to be an important factor in driving the
Company's success.
J.B. HUNT TRANSPORT SERVICES, INC., COMPENSATION COMMITTEE
2001 Members
John A. Cooper. Jr., Chairman
Gene George and Tom Hardeman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Cooper, George and Hardeman are outside directors of the Company.
None of the members of the Compensation Committee were an officer or an employee
of the Company during fiscal year 2001 and no member of the Committee is a
former officer of the Company or had any related party transactions with the
Company in fiscal year 2001.
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REPORT OF THE AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act or the Exchange Act that might incorporate
future filings, including this Proxy Statement, in whole or in part, the
following Report of the Audit Committee shall not be incorporated by reference
into any such filings, and shall not be deemed soliciting material as filed
under the Securities Act or the Exchange Act.
On October 14, 1992, the Board adopted the Audit Committee Charter setting
out the audit related functions that the Audit Committee is to perform. The
functions of the Audit Committee (the "Committee") are focused on three areas:
o Adequacy of the Company's internal controls and financial reporting process
and the reliability of the Company's financial statements;
o the independence and performance of the Company's independent auditors; and
o the Company's compliance with legal and regulatory requirements dealing
with the Company's financial statements.
The directors who serve on the Committee are all independent for purposes
of the Securities and Exchange Commission ("SEC") standards. That is, the Board
has determined that no member on the Committee has a relationship to the Company
that may interfere with the Committee's independence from the Company and its
management.
Management is responsible for the Company's financial statements, internal
controls and financial reporting process. The independent auditors perform an
independent audit of the Company's consolidated financial statements, express an
opinion as to whether those financial statements fairly represent the financial
position, results of operations and cash flows of the Company in accordance with
generally accepted auditing standards and issue a report thereon.
The Audit Committee is responsible for monitoring and overseeing these
processes. The Committee meets with management periodically to consider the
adequacy of the Company's internal controls and the objectivity of its financial
reporting and discusses these matters with the Company's independent auditors.
The Committee regularly meets privately with the independent auditors, who have
unrestricted access to the Committee. The Committee also recommends to the Board
the appointment of the independent auditors and reviews periodically their
performance and independence from management. In addition, the Committee reviews
the Company's financial plans and reports recommendations to the full Board for
approval and to authorize action.
In this context, the Committee reviewed the audited consolidated financial
statements and met and held discussions with management and KPMG LLP, the
Company's independent auditors, to discuss those financial statements.
Management has represented to the Committee that the Company's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles.
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The independent auditors also provided the Committee with written
disclosures and the letter required by Independence Standards Board Standard No.
1, which relates to the auditor's independence from the Company, and the
Committee discussed with the independent auditors their independence. The
Committee also discussed with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61, which includes, among other
items, matters relating to the conduct of the audit of the Company's financial
statements.
Based on the Committee's discussions with management and the independent
auditors, as well as its review of the representations of management and the
report of the independent auditors, the Committee recommended to the Board that
the Company's audited consolidated financial statements be included in the
Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed
with the SEC.
The Committee recommended to the Board and the Board has selected KPMG LLP
to be employed as the Company's independent certified public accountants to make
the annual audit and to report on, as may be required, the consolidated
financial statements which may be filed by the Company with the SEC during the
ensuing year.
J.B. HUNT TRANSPORT SERVICES, INC., AUDIT COMMITTEE
2001 Members
John White, Chairman
Gene George, Leland E. Tollett
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The following table sets forth information concerning total compensation
earned or paid by the Company or any of its subsidiaries, as well as certain
other compensation paid or accrued, during the fiscal years indicated, to the
Senior Chairman, Chairman (as two of the five highest paid executives other than
the Chief Executive Officer), the Chief Executive Officer, and the two highest
paid executive officers of the Company for such period in all capacities in
which they served.
TABLE I
EXECUTIVE COMPENSATION SUMMARY TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ----------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND COMPEN- STOCK OPTIONS/ COMPEN-
PRINCIPAL BONUS SATION AWARD(s) SARS SATION
POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5)
-------- ---- --------- ------ ------ ---------- ----------- ---------
J.B. Hunt 2001 375,000 0 82,717 N/A N/A 19,530
Senior Chairman 2000 375,000 0 73,345 N/A N/A 15,790
1999 375,000 0 46,611 N/A N/A 14,991
Wayne Garrison 2001 375,000 0 40,944 N/A 0
Chairman 2000 375,000 0 N/A N/A 130,000 0
1999 375,000 0 54,104 N/A 0 0
Kirk Thompson 2001 450,000 2,813 N/A N/A 75,000 4,461
President and 2000 450,000 45,000 N/A N/A 32,500 2,385
CEO 1999 450,000 0 N/A N/A 53,000 3,603
Jerry Walton 2001 325,000 2,031 N/A N/A 30,000 3,383
Executive VP 2000 321,154 32,500 N/A N/A 105,000 4,632
Finance/Admin- 1999 275,000 0 N/A N/A 10,000 1,872
istration/CFO
Paul Bergant 2001 280,000 1,750 N/A N/A 25,000 3,804
EVP, Marketing/ 2000 276,038 28,000 N/A N/A 55,000 1,968
Chief Marketing 1999 260,000 0 N/A N/A 10,000 1,874
Officer
1. All bonuses are reported in the year in which they are earned. No bonus was
earned for fiscal year 1999.
2. In accordance with SEC rules, reporting is not required unless the
aggregate of such compensation exceeds $50,000 or 10% of the total annual
salary and bonus.
The amount reported for Mr. Hunt in fiscal year 2001 represents $62,945 for
professional fees and $19,772 for personal use of the Company plane. For
fiscal year 2000, the amount reported for Mr. Hunt represents $56,160 in
professional fees and $17,185 for personal use of the Company plane. For
fiscal year 1999, the amount reported for Mr. Hunt represents $41,915 for
professional fees and $4,696 for personal use of the Company plane.
In fiscal year 2001, the amount reported for Mr. Garrison represents $5,625
for professional fees, $34,039 for personal use of the Company plane and
$1,280 for use of a Company car. For 1999, the amount reported for Mr.
Garrison represents $26,376 for professional fees, $26,885 for personal use
of the Company plane and $843 for use of a Company car.
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3. There were no restricted stock awards granted in fiscal years 2001, 2000 or
1999.
4. There were no stock appreciation rights ("SARs") granted to the above named
executives by the Company.
5. Includes contributions to Company retirement plans on behalf of each of the
executives. Also included in other compensation: The Company advances
premiums on life insurance policies on the lives of Mr. and Mrs. J.B. Hunt.
The premium advances, plus accrued interest, was $9,048,696 as of December
31, 2001, and is a receivable to the Company from a trust, which is the
owner and beneficiary of the policy. The Company has a guarantee from Mr.
and Mrs. Hunt for the amount of premiums paid by the Company together with
accrued interest at the rate of 5% per annum for the period January 3, 1990
through July 20, 2000 and at the Company's annually adjusted average cost
of borrowing thereafter. During 2001 the Company paid premiums of $600,000
with respect to the life insurance policies of which Mr. Hunt's share, as
reported by the insurance carriers, consisted of $14,281.
TABLE II
AGGREGATED OPTION EXERCISES DURING FISCAL YEAR 2001
AND
OPTION VALUES ON DECEMBER 31, 2001
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
(1)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UN-EXERCISABLE UN-EXERCISABLE
---- --------------- ------------------ -------------- --------------
J. B. Hunt 0 0 0 0
Wayne Garrison 1,500,000 10,702,500 1,026,000 E 5,776,760 E
104,000 U 807,040 U
Kirk Thompson 101,430 717,632 0 E 0 E
232,270 U 1,546,355 U
Jerry Walton 33,000 332,767 62,200 E 577,887 E
182,400 U 1,421,561 U
Paul Bergant 0 0 71,860 E 584,395 E
149,140 U 1,060,806 U
The above Exhibit reflects options only. The Company has no SARs at the present
time.
(1) In accordance with SEC rules, values are calculated by subtracting the
exercise price from the fair market value of the underlying common stock.
For purposes of this table, fair market value is deemed to be $23.20, which
is the closing market price reported on NASDAQ on December 31, 2001.
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TABLE III
OPTION GRANTS DURING FISCAL YEAR 2001
NUMBER OF
PERCENT SECURITIES
OF TOTAL UNDERLYING OPTION POTENTIAL
OPTIONS OPTIONS PRICE EXPIRATION REALIZABLE VALUE ($)(1)
NAME GRANTED (%) GRANTED(#) ($/SH) DATE 5% 10%
---- ----------- ---------- ------ ---------- ---------- ------------
J.B. Hunt 0 0 0 0 0 0
Wayne Garrison 0 0 0 0 0 0
Kirk Thompson 8.51 75,000 13.91 11/2/2012 741,062 1,933,264
Jerry Walton 3.41 30,000 13.91 11/2/2007 141,922 321,972
Paul Bergant 2.84 25,000 13.91 11/2/2007 118,268 268,310
The above Exhibit reflects options only. The Company has no SARs at the present
time. There were no stock options awarded to Mr. Garrison during fiscal year
2001. Mr. Hunt does not receive stock options.
(1) Caution is recommended in interpreting the financial significance of these
figures. Potential values are based on the assumption that the Company's common
stock will appreciate 5% or 10% each year, compounded annually, from the grant
date of the option to the end of the option term, and therefore, the figures are
not intended to forecast possible future appreciation, if any, of the price of
common stock or establish a present value of the options.
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PERFORMANCE GRAPH
The following graph presents a five-year comparison of cumulative total
returns for the Company, the S&P 500 composite index and NASDAQ Trucking Stocks
(CRSP Transportation Index). The CRSP Transportation Index was prepared by the
Center for Research in Security Prices and includes all NASDAQ motor freight and
warehousing companies classified under SIC codes 4200-4299. A listing of the
companies included in the CRSP Transportation Index is available upon request
from the Company. The values on the graph show the relative performance of an
investment of $100 made on December 31, 1996 in Company common stock and in each
of the indices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
J. B. HUNT TRANSPORT SERVICES, INC., S&P 500, NASDAQ
[GRAPH]
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
---------------- -------------- --------------- -------------- -------------- ---------------
J. B. HUNT 100.0 135.8 167.9 102.3 124.7 172.0
S&P 500 100.0 133.5 172.2 208.5 190.0 167.6
NASDAQ 100.0 129.2 129.5 121.8 134.2 185.4
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, on the unanimous recommendation of the Audit
Committee, has selected KPMG LLP to audit the books, records and accounts of the
Company for the 2002 fiscal year. KPMG LLP has served as the Company's
independent auditors since its appointment in 1982. Representatives of KPMG LLP
are expected to be present at the Annual Meeting to respond to appropriate
questions.
The Audit Committee approved all audit services provided by KPMG LLP for
the year ended December 31, 2001. These services included the examination of the
Company's consolidated financial statements and other services related to
filings with the Securities and Exchange Commission. See "Report of the Audit
Committee" for a discussion of auditor independence.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
THE RATIFICATION OF THE APPOINTMENT OF KPMG
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 2002 FISCAL YEAR.
AUDIT FEES
The aggregate fees billed for professional services rendered in connection
with the audit of the Company's annual financial statements, the reviews of the
financial statements included in the Company's 10-Q's and the annual audit of
the financial statements of the Company's employee benefit plan for the 2001
fiscal year were $276,712.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
For the 2001 fiscal year, KPMG LLP billed no fees in connection with the
Company's information system.
ALL OTHER FEES
The aggregate total of all other fees billed by KPMG LLP for the 2001
fiscal year were $139,631, including tax compliance fees of $119,481 and audit
related fees of $20,150.
The Audit Committee has considered whether KPMG LLP's independence is
compatible with rendering all other non-audit services during fiscal year 2001.
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OTHER MATTERS
OTHER BUSINESS PRESENTED AT ANNUAL MEETING
As of the date of this Proxy Statement, the Board knows of no other
business that may properly be, and is likely to be, brought before the Annual
Meeting. If any other matters should arise at the Annual Meeting, shares
represented by proxies will be voted at the discretion of the proxy holders.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
In order for a proposal by a stockholder to be presented at an Annual
Meeting of the Company's stockholders, the proposal must be included in the
related Proxy Statement and proxy form. In order for a stockholder's proposal to
be included in the Proxy Statement and proxy form for the Annual Stockholders'
Meeting in 2003, the proposal (1) must be received by the Company at its home
office, 615 J.B. Hunt Corporate Drive, Lowell, Arkansas 72745, Attention:
Johnelle D. Hunt, Corporate Secretary, on or before November 1, 2002 and (2)
must concern a matter that may be properly considered and acted upon at the
Annual Meeting in accordance with applicable laws, including the Company's
Bylaws and Rule 14a-8 of the Securities Act.
EXPENSES
The proxies being solicited hereby are being solicited by the Company. The
expense of soliciting proxies, including the cost of preparing, assembling and
mailing the material submitted herewith, will be paid by the Company. The
Company will also reimburse brokerage firms, banks, trustees, nominees and other
persons for the expense of forwarding proxy material to beneficial owners of
shares held by them of record. Solicitations of proxies may be made personally
or by telephone or telegraphic communications, by directors, officers and
regular employees, who will not receive any additional compensation in respect
of such solicitations.
WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, proxy statements, and other information with the
SEC. You can read and copy these reports, proxy statements, and other
information concerning the Company at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. The SEC
maintains an Internet site at http://www.sec.gov/ that contains reports, proxy
and information statements and other information regarding issuers that file
electronically with the SEC, including the Company.
In addition, the Company's Annual Report and Form 10-K is available via the
Internet at the Company's website http://www.jbhunt.com as are press releases
and other pertinent information about the Company.
STOCKHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY
ENCLOSED IN THE ENVELOPE PROVIDED. PROMPT RESPONSE WILL GREATLY FACILITATE
ARRANGEMENTS FOR THE MEETING, AND YOUR COOPERATION WILL BE APPRECIATED.
By Order of the Board of Directors
JOHNELLE D. HUNT
Secretary
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[J.B. HUNT LOGO]
615 J.B. CORPORATE DRIVE
LOWELL, ARKANSAS 72745
479-820-0000
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PROXY
J.B. HUNT TRANSPORT SERVICES, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS, APRIL 25, 2002
The undersigned hereby constitute(s) and appoint(s) WAYNE GARRISON AND KIRK
THOMPSON as Proxies, each with the power to appoint his substitute, and hereby
authorizes the Proxies, or either of them, to represent and vote as designated
on this proxy card all of the shares of common stock of J.B. HUNT TRANSPORT
SERVICES, INC. held of record by the undersigned on February 28, 2002 at the
Annual Meeting of Stockholders to be held on April 25, 2002, and any adjournment
thereof.
Election of Directors, Nominees:
(01) Johnelle D. Hunt
(02) Kirk Thompson
(03) Leland E. Tollett
(04) John A. White
COMMENT/CHANGE OF ADDRESS:
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If you have written in the above space, please mark the
corresponding box on the reverse side of this card
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
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o FOLD AND DETACH HERE o
2600
[X] PLEASE MARK YOUR
VOTES AS IN THIS
SAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. To ratify the [ ] [ ] [ ] 3. To consider and [ ] [ ] [ ]
Directors appointment of act upon such other
(See Reverse) KPMG LLP as the business as may
principal independent properly come before
For, except vote withheld from public accountants for the meeting or any
the following nominee(s): fiscal year 2002. adjournments
thereof.
---------------------------------
Change of Address/Comments
on Reverse Side [ ]
SIGNATURE(S) DATE
-------------------------------------- ------------------------
NOTE: Please mark, sign, date and promptly return this proxy card in the
enclosed envelope. Please sign exactly as your name(s) appear(s) above. When
shares are held by joint tenants, both should sign. When signing as attorney,
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 persons.
The signer hereby revokes all proxies hereto-fore given by the signer to vote at
said meeting or any adjournments thereof.
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o FOLD AND DETACH HERE o
J.B. HUNT TRANSPORT SERVICES, INC.
Dear Stockholder:
J.B. Hunt Transport Services, Inc. encourages U.S. and Canadian residents to
take advantage of a convenient way by which you can vote your shares by
telephone. If you vote by telephone, you do not need to return this proxy card.
To vote your shares by telephone you must use the voter control number in the
box above, just below the perforation. On a touch-tone telephone, call toll-free
1-877-PRX-VOTE (1-877-779-8683) 24 hours a day, 7 days a week. The telephone
response system will lead you through a simple process of voting your proxy.
Your voter control number above must be used to access the system. Your
telephone vote provides the same authorization to vote your shares as if you
marked, signed, dated and returned your proxy card.
Your vote is important. Thank you for voting.