UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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P.A.M. TRANSPORTATION SERVICES, INC.
| P.A.M. TRANSPORTATION SERVICES, INC. | |
| (Name of Registrant as Specified In Its Charter) | |
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P.A.M. Transportation Services, Inc.TRANSPORTATION SERVICES, INC.
297 West Henri DeTontiDe Tonti Boulevard
Tontitown, Arkansas 72770
(479) 361-9111
www.pamtransport.com
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Notice of Annual Meeting of StockholdersNOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 28, 200924, 2012
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To our Stockholders:
The 20092012 annual meeting of stockholders of P.A.M. Transportation Services, Inc. (“PTSI” or the “Company”), a Delaware corporation, will be held at the Holiday Inn Springdaleprincipal executive offices located at 297 West Henri De Tonti Boulevard, Tontitown, Arkansas 1500 South 48th Street, Springdale, Arkansas 72762,72770, on Thursday, May 28, 2009,24, 2012, at 9:00 a.m., local time. The meeting is being held for the purpose of considering and voting on the following matters:proposals:
1. Electing nine directors to serve until the next annual meeting of stockholders and until their successors have been elected and qualified.
2. | 1. | To elect eight directors to serve until the next annual meeting of stockholders and until their successors have been elected and qualified (the Board of Directors recommends a vote “FOR” the nominees named in the attached proxy statement proposal); |
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| 2. | To ratify the appointment of Grant Thornton LLP as PTSI’s independent registered public accounting firm for the next fiscal year (the Board of Directors recommends a vote “FOR” this proposal); and |
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| 3. | Such other business as may properly come before the meeting or any adjournment or postponement of the meeting. |
All stockholders of record as of the close of business on April 7, 20094, 2012, will be entitled to notice of and to vote at the meeting or any adjournment or postponement of the meeting.
By Order of the Board of Directors
Robert W. Weaver Daniel H. Cushman
President and Chief Executive Officer
April 20, 2009
19, 2012
Your Vote Is Important Whether or not you plan to attend the meeting in person, you are urged to promptly submit your proxy so that your shares may be voted in accordance with your wishes and the presence of a quorum may be assured. Your prompt action will help us reduce the expense of proxy solicitation. |
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Proxy Statement
For the Annual Meeting of Stockholders
To Be Held on May 28, 200924, 2012
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Table of Contents
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Stockholder Proposals30 | 21 |
Other Matters | 21 |
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Annual Meeting of Stockholders
May 28, 200924, 2012
Proxy StatementPROXY STATEMENT
This proxy statement and form of proxy are furnished in connection with the solicitation of proxies on behalf of ourthe Board of Directors of P.A.M. Transportation Services, Inc. (“PTSI” or the “Company”) for use at our annual meeting of stockholders (the “Annual Meeting”) to be held at the Holiday Inn Springdaleprincipal executive offices located at 297 West Henri De Tonti Boulevard, Tontitown, Arkansas 1500 South 48th Street, Springdale, Arkansas 72762,72770, on Thursday, May 28, 2009,24, 2012, at 9:00 a.m., local time, and at any or all adjournments or postponements of the meeting. The address oftelephone number for our principal executive offices is 297 West Henri DeTonti Boulevard, Tontitown, Arkansas 72770 and our telephone numberoffice is (479) 361-9111. This proxy statement and form of proxy are being mailed to stockholders on or about April 20, 2009.19, 2012.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS’ MEETING TO BE HELD ON MAY 28, 200924, 2012
Our combined Proxy Statement and 20082011 Annual Report to Stockholders, which includes our Annual Report on Form 10-K, are available at www.edocumentview.com/www.envisionreports.com/PTSI.
What is the purpose of the annual meeting?Annual Meeting?
At our annual meeting,the Annual Meeting, stockholders will act upon the matters outlined in the accompanying notice of the meeting,Annual Meeting, including the election of directors and ratification of appointment of our independent public accounting firm, and consideration of such other business as may properly come before the meeting.Annual Meeting.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date, April 7, 2009,4, 2012 (the “Record Date”), are entitled to receive notice of the annual meetingAnnual Meeting and to vote their shares at the meeting. Holders of our common stock are entitled to one vote per share.
What is the difference between a “stockholder of record” and a “street name” holder?
These terms describe how your shares are held. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are a “stockholder of record.” If your shares are held in the name of a broker, bank, trust or other nominee as a custodian, you are a “street name” holder.
Who can attend the meeting?Annual Meeting?
All stockholders as of the record date, or their duly appointed proxies, may attend the meeting.Annual Meeting. Stockholders who are “street name” holders will need to bring a copy of a brokerage statement reflecting their ownership as of the record date in order to attend the meeting.
What is a proxy?
A proxy is your legal designation of another person, the “proxy,” to vote on your behalf. By completing and returning the enclosed proxy card, you are giving the persons appointed as proxies by our Board of Directors (the “Board”) the authority to vote your shares as indicated on the proxy card.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of our common stock outstanding and entitled to vote on the record date will constitute a quorum, permitting business to be conducted at the meeting. As of the record date, 9,409,607Record Date, 8,701,607 shares of our common stock were outstanding and entitled to vote. Proxies that are received and marked as withholding authority, abstentions, and broker non-votes (where a bank, broker or nominee does not exercise discretionary authority to vote on a matter) will be included in the calculation of the number of shares considered to be represented at the meeting.
How do I vote?
You may vote by mail or follow the alternative voting procedures described on the accompanying proxy card. If you complete, sign and return the proxy card, it will be voted as you direct. If no choice is specified on a signed proxy card, the persons named as proxies will vote (1) in favoraccordance with the recommendations of the Board, as set out below.
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. Under a recent amendment to the New York Stock Exchange (NYSE) rules, brokers no longer have the discretion to vote on the election of alldirectors because director elections, even if uncontested, are no longer considered a routine matter. Even though the Company’s stock is listed on the NASDAQ Stock Market, it is expected that brokers who are members of the nomineesNYSE will follow the NYSE rules governing proxy voting with respect to all proxies for directorall publicly traded companies. In addition, the Dodd-Frank Wall Street Reform and (2)Consumer Protection Act enacted on July 21, 2010, directs national securities exchanges to prohibit broker discretionary voting of uninstructed shares for certain matters, including shareholder votes on executive compensation. The NYSE and NASDAQ have amended or are in the discretionprocess of the persons named as proxies as to all other matters that may be properly presented at the annual meeting.
If the shares you own are held in street name, your broker, bank or other nominee, as the record holder of your shares, is required to vote your shares according to your instructions. Your broker, bank or other nominee is required to send you directions on how to vote those shares. Ifamending their rules accordingly. Thus, if you do not give instructions to your broker bank or other nominee it will still be able to vote your sharesspecific instructions, including with respect to certain “discretionary” items, butthe election of directors, your shares may not be voted on those matters and will not be allowed to vote yourcounted in determining the number of shares with respect to certain “non-discretionary” items. In the case of non-discretionary items, the shares that do not receive voting instructionsnecessary for approval. Shares represented by such “broker non-votes” will, however, be treated as “broker non-votes.”counted in determining whether there is a quorum.
If, as of the record date, you are a stockholder of record and you attend the meeting, you may vote in person at the meeting. The authorized capital stock of PTSI consists of 40,000,000 shares of common stock, par value $0.01 per share and 10,000,000 shares of preferred stock, par value $0.01 per share. As of the close of business on April 4, 2012, there were 8,701,607 shares eligible to vote.
What are the Board’s recommendations?
Can I revoke or change myUnless you give other instructions on your proxy after I return mycard, the persons named as proxy card?holders on the proxy card will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth together with each proposal in this proxy statement. In summary, the Board recommends a vote:
Yes. Any proxy may be revoked by a stockholder at any time before it is exercised at the annual meeting by delivering to our Secretary a written notice of revocation or a duly executed proxy bearing a later date, or by voting in person at the meeting.| · | “FOR” the election of the nominated slate of directors. |
| · | “FOR” the ratification of the appointment of Grant Thornton LLP as PTSI’s independent registered public accounting firm. |
What vote is the vote required to elect directors?approve each proposal?
The affirmative vote of the holders of shares of our common stock representing a plurality of the shares of our common stock voting on the matter is required for the election of directors. Votes withheld and broker non-votes are not counted toward a nominee's| · | Election of Directors. The affirmative vote of the holders of shares of our common stock representing a plurality of the shares of our common stock voting on the matter is required for the election of directors. Votes withheld and broker non-votes are not counted toward a nominee’s total number of votes. |
| · | Other Proposals. For each other proposal, the affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting, assuming a quorum is present, 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 no effect on the outcome of the vote. |
Are there other matters to be voted on at the meeting?Annual Meeting?
As of the date of this proxy statement, our Board of Directors does not know of any other matters whichthat may come before the meeting, other than the election of directorsProposals described in this proxy statement.Proxy. Should any other matter requiring a vote of the shareholdersstockholders arise and be properly presented at the annual meeting,Annual Meeting, the proxy included with this proxy statement confers upon the persons named in the proxy and designated to vote the shares, discretionary authority to vote or otherwise act with respect to any such matter in accordance with their best judgment.
Can I revoke or change my proxy after I return my proxy card?
Yes. Any proxy may be revoked by a stockholder at any time before it is exercised at the Annual Meeting by delivering to our Secretary a written notice of revocation or a duly executed proxy bearing a later date, or by voting in person at the meeting.
Who pays for this proxy solicitation?
All costs of soliciting proxies will be paid by us.the Company. Our directors, officers, and other employees may, without compensation other than their regular compensation, solicit proxies by further mailings or personal conversation, or by telephone, facsimile or electronic means. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses for forwarding soliciting material to the beneficial owners of our common stock.
How many Directors are there?
Our Amended and Restated By-Laws (the “Bylaws”) provide that the number of directors shall not be less than three (3) nor more than fifteen (15) members, with the precise number to be fixed by resolution of the stockholders or the Board of Directors. Currently, we have eight (8) directors.
How long do Directors serve?
Our Bylaws provide that each Director shall hold office until the Annual Meeting of stockholders held next after his election and until his successor has been duly elected and has qualified, or until his resignation, removal from office, or death. The stockholders of the Company elect successors for Directors whose terms have expired at the Annual Meeting. The Board elects members to fill new membership positions and vacancies in unexpired terms on the Board.
Do the stockholders elect the executive officers?
No. Executive Officers are elected by the Board and hold office until their successors are elected and qualified or until the earlier of their death, retirement, resignation or removal.
Our Board of Directors encourages stockholders to attend the annual meeting.Annual Meeting. Whether or not you plan to attend, you are urged to promptly submit your proxy.
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Election of DirectorsELECTION OF DIRECTORS
Our Board of Directors currently consists of nineeight directors. Members of our Board are elected annually to serve until the next annual meeting of stockholders or until their successors are elected and qualified. Our Board of Directors has nominated for re-election eachall of the nine current members of our Board. Information about these individuals,Board who have been nominatedwish to stand for re-election tore-election. The biography of each of the nominees below contains information regarding the person’s service as director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Board is set forth below.to determine that the person should serve as a director.
| Frederick P. Calderone | Director Since 1998 |
Frederick P. Calderone, age 58,61, has served as a Vice President of CenTra, Inc. for the past 1921 years. CenTra is a transportation holding company headquartered in Warren, Michigan. Prior to joining CenTra, Mr. Calderone was a partner with Deloitte, Haskins, & Sells, Certified Public Accountants (now Deloitte & Touche LLP). Mr. Calderone is a certified public accountant and an attorney. Mr. CalderoneHe has served as a director of PTSI since May 1998. He has extensive experience in finance and accounting. Because he has served as director of PTSI for over ten years, he has an enhanced knowledge of PTSI’s corporate governance, personnel matters and growth strategy. These experiences qualify him for service on the Board.
| Frank L. Conner | Director Since 2002 |
Frank L. Conner, age 59, has62, retired in June 2010 from FedEx Freight East (formerly American Freightways, Inc.) where he had served as Executive Vice President of Finance and Accounting and Chief Financial Officer of FedEx Freight East (formerly American Freightways, Inc.) since February 2001. Mr. Conner previously served as a Director of American Freightways from 1989 to February 2001 and held various positions with American Freightways, including serving as Executive Vice President-Finance and Accounting and Chief Financial Officer from November 1995 to February 2001. Mr. ConnerHe previously served 13 years with McKesson Service Merchandise in various positions including General Manager and Chief Financial Officer. Mr. ConnerHe served seven years in public accounting with Peat, Marwick & Mitchell prior to joining McKesson. Mr. ConnerHe has served as a director of PTSI since July 2002. Mr. Conner has also served as a member of the Board of Directors of First Federal Bancshares of Arkansas, Inc. since September 2003. He has extensive experience in finance and accounting. He has served in senior financial management positions for both privately and publicly held companies for over 25 years. Prior to that his experiences included performing financial audits of banking and non-banking publicly held companies. He has extensive experience dealing with investors, financial institutions, suppliers, government agencies, employees and the general public. He has served on the Board of Directors of three publicly held companies and as a member of several committees of those Boards, including the Audit and Compensation committees. He currently serves on our Audit Committee and Compensation and Stock Option Committee. His experience and education including his degree in accounting and certification as a professional accountant qualifies him to serve on the Board and as a member of the Audit Committee of PTSI.
| Daniel H. Cushman | Director Since 2009 |
Daniel H. Cushman, age 57, has served as President and Chief Executive Officer since July 2009. Prior to his employment with the Company, Mr. Cushman served as Vice President of Sales and Marketing for CRST International, Inc. in Cedar Rapids, Iowa (“CRST”), from July 2008 to July 2009, and as Vice President and General Manager of Dedicated Services for CRST from March 2008 to July 2008. From January 2007 to March 2008, Mr. Cushman was Senior Executive Vice President and Chief Marketing Officer for Werner Enterprises in Omaha, Nebraska. From January 2002 to December 2006, he served as Executive Vice President Chief Marketing and Operations Officer for Werner Enterprise. These experiences qualify him to serve on the Board and as a member of the Executive Committee of PTSI.
| W. Scott Davis | Director Since 2007 |
W. Scott Davis, age 46, is a private investor and49, has been a business consultantPartner and Senior Managing Director of Rock Financial Partners, LLC since 2006. He isApril 2009. From August 2006 to April 2009, he served as the President and sole owner of WS Davis, Inc., the company through which he performs his consulting work. Mr. Davis has many years of experience in investment banking. From 1987 to 2006, Mr. Davis worked for Stephens Inc., an investment banking firm, including serving as an Executive Vice President of Stephens Inc. from 2002 to 2006. Mr. Davis has served as a director of PTSI since August 2007. He has extensive experience in the investment banking industry. He currently serves on our Audit Committee and Compensation and Stock Option Committee. His extensive experience in financial statement analysis and review qualifies him to serve on the Board and as a member of the Audit Committee of PTSI.
Christopher L. Ellis, | Manuel J. Moroun | Director Since 2002 |
Manuel J. Moroun, age 64, retired in 2004 after serving as Senior Vice President84, is a principal shareholder and Chief Financial Officer of USF Corporation for 14 years. USF Corporation provides supply chain management services, including less than truckload trucking, logistics, freight forwarding, and truckload trucking. Prior to that he served for six years as Vice President and Chief Financial Officer of TNT North America, which included the business of USF Corporation before it was spun off from TNT North America. Mr. Ellis holds an MBA from The Wharton School of Business at the University of Pennsylvania. Mr. Ellis has served as a director of PTSI since May 2006.
Manuel J. Moroun, age 81, is the President and Chief Executive Officer of CenTra, Inc., a transportation holding company headquarteredbased in Warren, Michigan.Michigan, since 1970. Mr. Moroun has been a principal stockholdershareholder and officer of CenTra, Inc. and its predecessor companies since 1954,1954. Mr. Moroun is a principal shareholder in other family owned businesses engaged in providing logistics and its Chief Executive Officer since 1970. CenTra is one of the largest privately held transportation holding companies in the United States.services. Mr. Moroun has served as a director of PTSIUniversal Truckload Services, Inc. (NASDAQ: UACL) since May 2002. Mr. Moroun2004. He is the father of Matthew T. Moroun, a director of PTSI who has been nominated for re-election at the annual meeting.Annual Meeting. He has more than fifty years experience in the transportation industry. With over fifty years experience in transportation focused business strategy, Mr. Moroun offers an important perspective and valuable insight to our corporate business strategy. This extensive experience qualifies him for service on the Board.
| Matthew T. Moroun | Director Since 1992 |
Matthew T. Moroun, age 39, has also served as the Chairman of our Board of Directors since 2007 and is a member of the Board of Directors of Universal Truckload Services, Inc. since November 2004.
Matthew T.our Executive Committee. Mr. Moroun age 36,is a principal shareholder and has served as Vice Chairman and as a director of CenTra, Inc., a transportation holding company based in Warren, Michigan, since 1993. Since 1996, Mr. Moroun is the principal shareholder and has served as Chairman of insurance holding company, Oakland Financial Corporation, an insurance and its subsidiaries, which arereal estate holding company based in Sterling Heights, Michigan. Since 1995,Michigan, and its subsidiaries, since 1996. Mr. Moroun is a principal shareholder in other family owned businesses engaged in providing logistics and transportation services. Mr. Moroun has served as Chairman ofon the Board of Durarock Reinsurance, Ltd., a reinsurance company. Mr. Moroun has served as a director of PTSIUniversal Truckload Services, Inc. (NASDAQ: UACL) since May 1992. Mr. Moroun2004. He is the son of Manuel J. Moroun, a director of PTSI who has been nominated for re-election at the annual meeting.Annual Meeting. He has extensive experience in the fields of transportation and insurance. Mr. Moroun has also servedMoroun’s vast leadership experience at both public and private companies provide him with a unique background to understanding our industry and to provide us strategic oversight while serving as a member and as the Chairman of theour Board of Directors
| Daniel C. Sullivan | Director Since 1986 |
Daniel C. Sullivan, age 68,71, has been a practicing attorney, specializing in transportation law for more than 40 years. Mr. Sullivan has been a principal with the firm of Sullivan, Hincks & Conway, or its predecessor, presently located in Oak Brook, Illinois, since 1972. Mr. Sullivan has served as a director of PTSI since June 1986. Mr. Sullivan has also served as a member of the Board of Directors of Universal Truckload Services, Inc. since November 2004.
Robert W. Weaver, age 59, is one of our co-founders. He has over 25 yearsextensive knowledge in the field of experience with ourtransportation law. His long history on the Board makes him qualified to understand PTSI’s customer base, industry structure, growth strategy and corporate governance. He serves on the Compensation and Stock Option Committee, and that service has enhanced his knowledge of public company executive compensation matters. These experiences qualify him for service on the Board and has served as our President and Chief Executive Officer since 1990. Mr. Weaver has served as a directormember of PTSI since 1990.the Compensation and Stock Option Committee of PTSI.
| Charles F. Wilkins | Director Since 1995 |
Charles F. Wilkins, age 70,73, retired in January 1995 after 34 years of employment with Ford Motor Company, and from January 1995 to January 2005 was self-employed as a logistics consultant. He served in various positions with Ford Motor Company in transportation management, including three years of service as Traffic Manager in Europe. Mr. Wilkins retired from the position of Director, Transportation and Traffic Office, in which he had served since 1990. Mr. Wilkins has been a member of the National Motor Carrier Advisory Committee of the Federal Highway Administration and was previously active in the National Industrial Transportation League as Chairman of the Audit Committee and Third Vice Chairman. Mr. Wilkins has served as a director of PTSI since June 1995. He currently serves on the Audit Committee. He has extensive experience in and knowledge of the transportation industry. His experience qualifies him to serve on the Board and as a member of the Audit Committee of PTSI.
Unless otherwise instructed, the persons named as proxies intend to vote all proxies received for the re-electionelection of the nineeight director nominees. All of the nominees have indicated their willingness to continue to serve on the Board of Directors. If any nominee should become unwilling or unavailable to serve, our Board of Directors may select a substitute nominee, and in that event the proxies intend to vote all proxies for the person selected. If a substitute nominee is not selected, the proxies intend to vote for the election of the remaining nominees. Our Board of Directors has no reason to believe that any of the nominees will become unavailable.unavailable to serve.
Your Board of Directors recommendsRecommends that you vote “FOR” the electionStockholders Vote
FOR
Each of the nomineesNominees Named Above
Corporate Governance
Director Independence
Applicable NASDAQ listing standards require that a majority of our Board of Directors be independent. In March of 2009,Recently, our Board of Directors reviewed the independence of our directors and determined that fivefour of our directors, Messrs. Conner, Davis, Ellis, Sullivan and Wilkins are independent as definedmeet the standards for independence required by applicable NASDAQ rules.listing standards. In making this determination, our Board of Directors has concluded that none of the independent directors has a relationship that, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Because more than fifty percent (50%) of the voting power of our company is controlled by Matthew Moroun and a trust of which Mr. Matthew Moroun and Mr. Hal Briand are co-trustees, we have elected to be treated as a “controlled company” in accordance with Rule 5615(c) of the NASDAQ Listing Rules. Accordingly, we are not subject to the Nasdaq Global Select Market rules that would otherwise require us to have (i) a majority of independent directors on the board; (ii) a compensation committee composed solely of independent directors; and (iii) a nominating committee composed solely of independent directors.
Board Structure and Role in Risk Oversight
Our Board of Directors has chosen to separate the positions of Chairman and Chief Executive Officer (“CEO”). Mr. Matthew T. Moroun is the Chairman of the Board and Mr. Daniel H. Cushman is the CEO and President. This separation of Chairman and CEO allows for greater oversight of PTSI by the Board. The Board is actively involved in oversight of risks that could affect PTSI. This oversight is conducted primarily through committees of the Board, as disclosed in the description of each of the committees below and in the charters of each of the committees, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within PTSI.
Board Meetings
During 2008,2011, our Board of Directors held fourthree meetings. During 2008, each directorMr. Manuel Moroun attended at leastfewer than 75% of the total number of meetings of our Board. All other directors attended more than 75% of the meetings of our Board and itsincluding committees on which hethey then served.
Board Committees
Our Board of Directors has, and appoints members to, three standing committees: the Audit Committee, the Compensation and Stock Option Committee (the “Compensation Committee”), and the Executive Committee. The membership of these committees, as of April 15, 2009,16, 2012, was as follows:
Audit Committee | Compensation and Stock Option Committee
| Executive Committee |
| Frank L. Conner* | Frank L. Conner | Daniel H. Cushman |
| W. Scott Davis | W. Scott Davis* | Matthew T. Moroun |
Christopher L. Ellis*Charles F. Wilkins | Daniel C. Sullivan | Robert W. Weaver |
Charles F. Wilkins | Charles F. Wilkins | |
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Each of the members of the Audit Committee and the Compensation and Stock Option Committee is an independent director as defined by applicable NASDAQ listing standards. Each of these two committees has a charter that has been approved by our Board of Directors and is available on our website, www.pamt.com.at www.pamtransport.com under the caption of “Investors”.
Audit Committee. We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee has three members and met five
four times in 2008.2011. The Audit Committee assists our Board of Directors in overseeing our accounting and financial reporting process, internal controls and audit functions, and is directly responsible for the appointment, retention and compensation of our registered public accounting firm. Our Board of Directors has determined that Mr. Conner and Mr. Ellis,Davis, who are members of the Audit Committee, are each qualified as an audit committee financial expert, as that term is defined in the rules of the Securities and Exchange Commission (“SEC”). Mr. Conner and Mr. EllisDavis are independent, as independence for audit committee members is defined in the NASDAQ listing standards and the rules of the SEC. More information about the Audit Committee is included below under the heading “Audit Committee Report.”
Compensation and Stock Option Committee. The Compensation and Stock Option Committee has three members and met one time in 2008.2011. The Compensation and Stock Option Committee assists our Board of Directors in carrying out its responsibilities relating to compensation and benefits for our executive officers. The Compensation and Stock Option Committee's responsibilities and authority include:
reviewing trends in management compensation and the competitiveness of our executive compensation programs;
overseeing development of new compensation plans, and approving or recommending for determination by our Board of Directors revisions of existing plans;
evaluating the performance of our Chief Executive Officer;CEO;
determining, or recommending for determination by our Board of Directors, the salaries, bonus and other compensation for our Chief Executive OfficerCEO and each of our other executive officers;
reviewing and making recommendations concerning long-term incentive compensation plans, including stock option and other equity-based plans;
to the extent eligible to do so, acting as the committee of our Board of Directors that administers equity-based plans, incentive compensation plans and employee benefit plans; and
reviewing and approving, or recommending to our Board of Directors for approval, compensation packages for new officers and severance arrangements for officers.
If a member of a committee of our Board of Directors is absent from a meeting, our bylaws give Board committees authority to unanimously appoint another member of our Board of Directors to act at the meeting in place of the absent committee member. While the Compensation and Stock Option Committee could use this authority, it has no plans to do so. The Compensation and Stock Option Committee has the authority to retain compensation consultants but does not currently use compensation consultants. Compensation for directors is determined by our Board of Directors.Board.
Executive Committee. The Executive Committee exercises the authority of our Board of Directors in accordance with our bylaws between regular meetings of our Board. The Executive Committee did not meet during 2008.2011.
Director Nominating Process. Our Board of Directors does not have a nominating committee that nominates candidates for election to our Board of Directors.Board. That function is performed by our Board of Directors. Each member of our Board participates in the consideration of director nominees. Our Board of Directors believes that it can adequately fulfill the functions of a nominating committee without having to appoint an additional committee to perform that function. Our Board of Directors believes that not having a separate nominating committee saves the administrative expense that would be incurred in maintaining such a committee, and saves time for directors who would serve on a nominating committee if it were established. As there is no nominating committee, we do not have a nominating committee charter.
At least a majority of our independent directors participate in the initial consideration of director nominees. These directors are independent, as independence for nominating committee members is defined in the NASDAQ listing standards. After these independent directors discuss and evaluate potential nominees, they recommend director nominees to the full Board of Directors for selection. Notwithstanding the foregoing, so long as the Company continues to be a controlled company (within the meaning of NASDAQ Rule 5615(c)), the Board of Directors may be guided by the recommendations of the Company’s majority stockholder in its nominating process.
Our Board of Directors will consider as potential nominees persons recommended by stockholders. Recommendations should be submitted to our Board of Directors in care of our Secretary, Larry J. Goddard,Lance K. Stewart, at our principal executive office, P.O.Post Office Box 188, Tontitown, Arkansas 72770. Each recommendation should include a personal biography of the suggested nominee, a description of the background or experience that qualifies the person for consideration, and a statement that the person has agreed to serve if nominated and elected.
Our Board of Directors has used an informal process to identify potential candidates for nomination as directors. Candidates for nomination have been recommended by an executive officer or director, and considered by our Board of Directors. Generally, candidates have been known to one or more of our Board members. Our Board of Directors has not adopted specific minimum qualifications that it believes must be met by a person it recommends for nomination as a director. The Board has determined that the Board as a whole must have the right diversity, mix of characteristics and skills for the optimal functioning of the Board in its oversight of the Company. In evaluating candidates for nomination, our Board of Directors will consider the factors it believes to be appropriate, which would generally include the candidate's independence, personal and professional integrity, business judgment, relevant experience and skills, including those related to transportation services, and potential to be an effective director in conjunction with the rest of our Board of Directors in collectively serving the long-term interests of our stockholders. Although our Board of Directors has the authority to retain a search firm to assist it in identifying director candidates, there has to date been no need to employ a search firm. Our Board of Directors does not evaluate potential nominees for director differently based on whether they are recommended to our Board of Directors by a stockholder.
Communications with Directors and Attendance at the Annual Meetings
Stockholders may communicate directly with our Board of Directors as a group by writing to our Board of Directors, care of the Secretary of PTSI, P.O.Post Office Box 188, Tontitown, Arkansas 72770. Our Secretary will review all of the correspondence and regularly forward to our Board of Directors a summary of the correspondence, and copies of all of the correspondence that, in his opinion, deals with the functions of our Board of Directors or any of its committees or that our Secretary otherwise determines requires the attention of our Board of Directors. Directors may at any time review a log of all of the correspondence that is addressed to our Board, of Directors, and request copies of any and all of the correspondence.
Our Board of Directors has a policy of encouraging our directors to attend the annual meetings of the stockholders. AllIn 2011, seven of our directors attended last year'sthe annual meeting.
Code of Ethics
We have adopted a written code of ethics that applies to all our directors, officers and employees, including our chief executive officerCEO and our chief financial and accounting officer. We have posted a copy of the codeour Code of Ethics on our website www.pamt.com.at www.pamtransport.com under the caption “Investors”. In addition, we intend to post on our website all disclosures that are required by law or NASDAQ listing standards concerning any amendments to, or waivers from, any provision of the code.
Compensation Committee Interlocks and Insider Participation
During 2008,2011, Messrs. Conner, Davis Sullivan and WilkinsSullivan served as members of the Compensation and Stock Option Committee for all of the year. No member of the Compensation and Stock Option Committee is, or was during or prior to 2008,2011, an officer or employee of PTSI or any of its subsidiaries. None of our executive officers serves or served as a director or member of the Compensation Committeecompensation committee of another entity in a case where an executive officer of such other entity serves or served as a director or member of our Compensation and Stock Option Committee.
Each member of the Audit Committee is independent, as independence for audit committee members is defined in the NASDAQ listing standards and the rules of the SEC. The Audit Committee's primary purpose is to assist the Board of Directors in overseeing:
the accounting and financial reporting process;
audits of financial statements and internal control over financial reporting; and
internal control and audit functions.
In carrying out its responsibilities, the Audit Committee supervises the relationship between us and our independent auditor, including having direct responsibility for the auditor's appointment, compensation and retention, reviewing the scope of its audit services, and approving audit and permissible non-audit services. The Audit Committee reviews and discusses the annual and quarterly financial statements, and reviews the activities of our internal audit function.
Management is responsible for the preparation, presentation and integrity of our financial statements and for the appropriateness of the accounting principles and reporting policies that are used. Management is also responsible for testing the system of internal controls and reporting to the Audit Committee on any significant deficiencies or material weaknesses that are found.
The Audit Committee discussed with PTSI's independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”), who is responsible for expressing an opinion on the conformity of our audited financial statements with generally accepted accounting principles, its judgments as to the quality and the acceptability of our financial reporting and such other matters as are required to be discussed with the Audit Committee under standards of the Public Company Accounting Oversight Board (United States), including the matters required to be discussed pursuant to Statement on Auditing Standards No. 61, as amended (Communications with Audit Committees). The Audit Committee and Grant Thornton also reviewed with Grant Thornton management's assessment, which was included in management's report on internal control over financial reporting and Grant Thornton's opinion on the effectiveness of the company's internal control over financial reporting.reporting as of December 31, 2011.
The Audit Committee has discussed with Grant Thornton that firm's independence from management and us, and has received from Grant Thornton the written disclosures and letter required by the Independence Standards Board Standard No. 1, as amended (Independence Discussions with Audit Committees). The Audit Committee has considered the compatibility of the provision of non-audit services with maintaining Grant Thornton's independence.
In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 20082011, with both management and our independent registered public accounting firm. The Audit Committee's review included a discussion of the quality and integrity of the accounting principles, the reasonableness of significant estimates and judgments, and the clarity of disclosures in the financial statements.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 20082011, for filing with the SEC.
Audit Committee Members
Frank L. Conner, Chairman
Christopher L. EllisW. Scott Davis
Charles F. Wilkins
Compensation Committee Report
The Compensation and Stock Option Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on the review and discussion, the committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.
Compensation and Stock Option Committee Members
W. Scott Davis, Chairman
Frank L. Conner
Daniel C. Sullivan
Charles F. Wilkins
Compensation Discussion and Analysis
Overview
Our primary goal for the compensation of our three executive officers Messrs. Weaver, Lawson and Goddard, is to create long-term value for our stockholders. Our compensation program is intended to attract, motivate, reward and retain the management talent required to achieve our corporate objectives and create long-term value for our stockholders, while at the same time making efficient use of our resources. The compensation of our executive officers is designed to reward financial and operating performance, to align their interests with those of our stockholders, and to encourage them to remain with us.
Executive Officers of PTSI
Our executive officers are Daniel H. Cushman, Larry J. Goddard and Lance K. Stewart.
| Name | Age | Position | Years of Service |
| Daniel H. Cushman | 57 | President and Chief Executive Officer | 3 |
| Larry J. Goddard | 53 | Executive Vice President | 24 |
| Lance K. Stewart | 43 | Vice President of Finance, Chief Financial Officer, Secretary and Treasurer | 23 |
___________________________
Daniel H. Cushman. Mr. Cushman, age 57, has served as President and CEO since July 2009. Prior to his employment with the Company, Mr. Cushman served as Vice President of Sales and Marketing for CRST International, Inc. in Cedar Rapids, Iowa (“CRST”), from July 2008 to July 2009, and as Vice President and General Manager of Dedicated Services for CRST from March 2008 to July 2008. From January 2007 to March 2008, Mr. Cushman was Senior Executive Vice President and Chief Marketing Officer for Werner Enterprises in Omaha, Nebraska. From January 2002 to December 2006, he served as Executive Vice President Chief Marketing and Operations Officer for Werner Enterprises.
Larry J. Goddard. Mr. Goddard, age 53, has served as Executive Vice President since July, 2010. From 1991 until July, 2010, Mr. Goddard served as Vice President of Finance, Chief Financial Officer, Secretary and Treasurer. Before 1991, Mr. Goddard served in various capacities with the Company and has been with the Company for the past 24 years. In 2011, Mr. Goddard filed for protection under Chapter 7 of the Bankruptcy Code. In relation to this filing, 10,000 shares of the Company’s stock owned by Mr. Goddard were sold by the bankruptcy trustee in March 2012.
Lance K. Stewart. Mr. Stewart, age 43, has served as Vice President of Finance, Chief Financial Officer, Secretary and Treasurer since July, 2010. From 2002 until July, 2010, Mr. Stewart served as Vice President of Accounting and Controller of the Company. Before 2002, he served in various capacities with the Company and has been with the Company for the past 23 years.
Elements of Compensation
We have three key elements of compensation: annual base salary, cash incentive compensation, and stock options. Annual base salary is intended to attract and retain talented executives, and reward them for annual achievement. Cash incentive compensation is intended to motivate our executive officers to achieve specified financial results or superior performance. Stock options are intended to align the interests of our executive officers with those of our stockholders by linking compensation to stock price appreciation. In addition, when the criteria for vesting of options includes achieving specified financial results, stock options also serve the purpose of motivating our executive officers to achieve those results.
Determining Compensation
Compensation for our executive officers is primarily based upon the judgment of the Compensation and Stock Option Committee of our Board of Directors. The committee considers competitive market compensation paid by other companies, including truckload dry van carriers and other trucking companies, but it does not attempt to maintain a specified target percentile within a peer group or otherwise rely on compensation paid by other companies to determine our executive compensation.
In determining compensation for our executive officers, the committee reviews and evaluates many factors, including:
PTSI's performance and growth;
financial measurements such as revenue, revenue growth, net operating income and operating ratio, and trends in those measurements;
ability to achieve strategic objectives;
scope and performance of business responsibilities;
management experience and effectiveness;
individual performance and performance as a management team;
current compensation arrangements; and
long-term potential to maintain and enhance value for our stockholders.
The committee generally does not adhere to rigid formulas or react to short-term changes in business performance in determining the amount and mix of compensation elements. The committee strives to achieve an appropriate mix between annual base salary, cash incentive compensation and stock options to meet our objectives.
The committee receives regular updates on our business results from management and reviews the quarterly financial statements and projections to assess whether executive compensation continues to be properly balanced with and supportive of our business objectives. The committee also regularly reviews information, including reported revenue, profit levels, market capitalization and disclosed governance practices, regarding comparably–sized companies in our industry to assess our comparative performance and organizational structure. The committee uses management updates and peer information as tools to evaluate the connection between executive compensation and our performance as a business. This information is reviewed in a subjective manner. There is no implied direct or formulaic linkage between peer information and our compensation decisions. The committee takes the view that a close connection between compensation and performance objectives encourages our executive officers to make decisions that will result in significant positive short-term and long-term returns for our business and our stockholders without providing an incentive either to take unnecessary risks or to avoid opportunities to achieve long-term benefits even though they may reduce short-term benefits for the executive officers, the business or our stockholders.
Based on these reports, the committee regularly evaluates both the short-term and long-term performance compensation for the executive officers to ensure alignment with our business objectives. The committee also works closely with management regarding long-term equity incentives, which emphasize stockholder returns while providing enhanced retention value for key executives.
Employment Agreements Include Annual Base Compensation
We have aperiodically enter into multi-year employment agreementagreements with eachcertain of our executive officers. The current agreements wereOn June 29, 2009, we entered into an employment agreement with our executive officers on July 26, 2006.CEO and President, Mr. Cushman. We generally believe that it is usefulbeneficial to haveenter into employment agreements because they set forth the terms under which the executive officers are employed, include annual base salary and severance arrangements, and generally provide us with one yeara certain level of protection from competition by our executive officers following termination of their employment with us. The employment agreements also typically require our executive officers to provide us with three months advance notice if they wish to resign. The annual base compensation for our executive officersCEO set forth in the employment agreementsagreement was determined by the Compensation and Stock Option Committee and recommended to, and approved by, our Board of Directors.
Cash Incentive Compensation
The committee did not establish a cash incentive compensation plan for our executive officers for 2008. The Compensation and Stock Option Committee determined to evaluate whether to pay our executive officers a bonus for 2008,During March 2011, after reviewing the Company’s and the amount of any bonus, after reviewing our business and financialindividual’s performance for 2008. After reviewing our business and financial performance for 2008,2010, the committee determined not to payCompensation Committee paid a discretionary bonus to anyeach of our executive officers in the following amounts: (1) Daniel H. Cushman received $60,000, (2) Larry J. Goddard received $15,000, and (3) Lance K. Stewart received $25,000.
During April 2012, after reviewing the Company’s and the individual’s performance for 2008. As of April 15, 2009,2011, the Compensation Committee awarded a discretionary bonus to Daniel H. Cushman in the amount of $150,000 and Stock Option Committee had not established a cash incentive compensation plan for our executive officers for 2009 and intends to giveLance K. Stewart in the matter further considerationamount $50,000. One-half of the bonus amount awarded will be paid immediately while the remaining one-half will be paid at a later date.the rate of 25% of the bonus amount awarded during each of the next two succeeding years.
Stock Options
In March of 2006, the Board of Directors adopted a new stock option plan, the 2006 Stock Option Plan. The plan provides for the issuance of stock options for up to 750,000 shares of our common stock, subject to adjustments. Our officers, directors, key employees and consultants are eligible to receive options under the plan. The plan was approved by our stockholders at their May 24, 2006 annual meeting. We did not issue any options to our executive officers or other employees under the plan during 2006, 20072009 or 2008.2011.
Our most recent grant ofOn November 30, 2010, we granted stock options to our executive officers was on August 28, 2002. Those options were granted under our 1995pursuant to the Company’s 2006 Stock Option Plan that expired in 2005.Plan. The option exercise price of $11.22 for each share was established based on the average of the high and low sales prices of the Company’s stock on the date of the grant. The options covered 120,000 shares of our common stock for Mr. Weaver, and 90,000 shares of our common stock for each of Mr. Lawson and Mr. Goddard. The options wereare scheduled to vest in installments. Mr. Cushman received a stock option grant of 20,000 options and a performance-based stock option grant of 25,600 options. Based on 2011 performance criteria, Mr. Cushman earned 2,000 performance-based options and the remaining 23,600 performance-based options expired unearned. Mr. Goddard received a stock option grant of 10,000 shares and a performance-based stock option grant of 8,000 shares. Based on 2011 performance criteria, Mr. Goddard earned 521 performance-based options and the remaining 7,479 performance-based options expired unearned. Mr. Stewart received a stock option grant of 7,500 shares and a performance-based stock option grant of 6,400 shares. Based on 2011 performance criteria, Mr. Stewart earned 417 performance-based options and the remaining 5,983 performance-based options expired unearned. The stock option grants vest on a schedule of 20% per year beginning on the first installment vested immediately on grant for 20%anniversary of the shares covered by each option.grant date. The remaining shares covered by the optionsperformance-based stock option grants were scheduledearned according to vest in equal installments, on March 15 of each year, from March 15, 2003 through March 15, 2008, depending for each annual installment on whether thecertain performance criteria for that installment was met. The primary performance criteria for each installment tobased upon the Company’s 2011 quarterly and annual operating ratios. Performance-based options vest has been whether our consolidated net income foron a schedule of 20% per year beginning on the most recent year exceeded the consolidated net income for the immediately prior year by at least 5%. The exercise price for allfirst anniversary of the shares was established atearnings press release reporting the market price of our stock on the date the options were granted, $23.22. The performance criteriarespective period’s result for the 2006 installment of the options was met, and the options for those shares vested on March 15, 2007. The performance criteria for the 2007 installment was not met, so the final installment of the options, which could have vested for the executive officers on March 15, 2008, did not vest.2011.
Other Compensation
We sponsor a retirement savings plan for all of our eligible employees, including our executive officers. The plan qualifies under section 401(k) of the Internal Revenue Code, as amended. This plan allows eligible employees to make tax deductible contributions to the plan. We make employer matching contributions to the plan for each eligible employee. The matching contributions are 50% of each participating employee's voluntary contribution up to 3% of the participant's compensation. These matching contributions vest at the rate of 20% each year until fully vested after five years.
We offer health, vision and dental insurance to Messrs. Lawson and Goddard,our executive officers and pay the insurance premiums for them.Mr. Goddard. While we make similar insurance available to Mr. Weaver and our other employees, we do not pay their insurance premiums.
We allow each of our executive officers to use a company owned automobile. With the exception of this perquisite, our policy is to provide minimal, if any, perquisites to our executive officers. This helps set an example for all employees that personal expenses are not payable from company funds and helps to control expenses.
Post-Employment Compensation
We do not provide a defined benefit pension plan or post retirement health insurance coverage for our executive officers or any of our other employees. We do not offer deferred compensation plans, and do not have agreements that provide compensation to our executive officers based upon the occurrence of a change in control of PTSI.
Tax Deductibility of Compensation
Section 162(m) of the Internal Revenue Code, as amended, imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company's chief executive officer or certain of the company's other most highly compensated executive officers. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (compensation paid only if the individual's or the company's performance meets pre-established objective goals based on performance criteria approved by the stockholders). We periodically review the potential consequences of Section 162(m) and may structure some or all of the compensation for our executive officers so that it will not be subject to the deduction limitations of Section 162(m). None of the compensation paid to our executive officers for 20082011 was structured to be “qualifying performance-based” compensation. For 2008,2011, we were not precluded by Section 162(m) from deducting any compensation that we paid to any of our executive officers.
Share Ownership Guidelines
We do not have stock ownership requirements for our executive officers. However, each of our executive officers owns options to acquire shares of our common stock, and options to acquire additional shares.stock.
Overview of the Compensation Process
The elements of executive compensation are discussed at meetings of the Compensation and Stock Option Committee, with significant input from our Chairman of the Board and other directors. Annual base salary is generally determined for a multi-year period at the time that employment agreements are negotiated with our executive officers.officers, if applicable. Cash incentive compensation and other bonuses and forms of stock-based compensation are discussed from time to time, but there is no set schedule for making determinations regarding these types of compensation, and the committee retains considerable flexibility in deciding when to address these matters. In making its compensation decisions, the committee will usually seek input from our PresidentCEO and Chief Executive OfficerPresident regarding elements of his compensation, and that of the other executive officers. However, the committee makes the final decision on executive officer compensation, or recommends compensation of our executive officer compensationofficers to our Board of Directors for approval. The committee is authorized to utilize compensation consultants, but does not presently confer with compensation consultants regarding executive compensation.
Stockholder Approval for the Company’s Compensation Programs
Last year, at our 2011 Annual Meeting of Stockholders, we held our first advisory vote on executive compensation, commonly referred to as “say on pay.” While the vote is an advisory and non-binding vote, the Compensation Committee and the Board will review the voting results to determine the cause or causes of any significant negative voting results. At our 2011 Annual Meeting of Stockholders, our stockholders overwhelmingly approved the “say on pay” resolution presented with more than 99% of the votes cast (excludes abstentions and broker non-votes) voting to approve our executive compensation. The Compensation Committee reviewed these voting results and given the strong level of support, did not make any changes to our executive compensation program or principles in response to the vote. In addition, over 70% of the shares voted (excludes abstentions and broker non-votes) were in favor of our recommendation to hold the “say on pay” vote every three years. As such, the next stockholder vote on “say on pay” is scheduled for 2014.
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Summary Compensation Table
The following table provides information regarding the compensation earned by the named executive officers for the three years ended December 31, 2008.2011.
Name and Principal Position | Year | | Salary ($) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | All Other Compensation ($)(3) | | | Total ($) | |
Robert W. Weaver President and Chief Executive Officer | 2008 | | | 529,423 | | | | — | | | | — | | | | — | | | | 529,423 | |
| 2007 | | | 501,923 | | | | — | | | | — | | | | — | | | | 501,923 | |
| 2006 | | | 475,000 | | | | 151,256 | | | | 272,105 | | | | 2,500 | | | | 900,861 | |
| | | | | | | | | | | | | | | | | | | | | |
W. Clif Lawson Executive Vice President and Chief Operating Officer | 2008 | | | 327,096 | | | | — | | | | — | | | | 5,000 | | | | 332,096 | |
| 2007 | | | 307,346 | | | | — | | | | — | | | | 5,000 | | | | 312,346 | |
| 2006 | | | 278,462 | | | | 113,442 | | | | 163,263 | | | | 5,000 | | | | 560,167 | |
| | | | | | | | | | | | | | | | | | | | | |
Larry J. Goddard Vice President of Finance, Chief Financial Officer, Secretary and Treasurer | 2008 | | | 245,635 | | | | — | | | | — | | | | 5,390 | | | | 251,025 | |
| 2007 | | | 232,058 | | | | — | | | | — | | | | 5,390 | | | | 237,448 | |
| 2006 | | | 217,302 | | | | 113,442 | | | | 122,447 | | | | 5,530 | | | | 458,721 | |
| | | | | | | | | | | | | | | | | | | | | |
____________
(1) | The amounts shown represent the compensation expense we recognized for financial statement reporting purposes for option awards granted to the named executive officers, as determined in accordance with SFAS 123(R). Information regarding assumptions made for purposes of determining these amounts can be found in Note 12 "Share-Based Compensation” to our consolidated financial statements in Item 8 "Financial Statements and Supplementary Data" of our Annual Report to the SEC on Form 10-K for the year ended December 31, 2008. |
(2) | Non-equity incentive plan compensation consists of amounts earned and payable for 2006 under our 2006 Executive Incentive Plan, which was a cash incentive plan. In accordance with the plan, this compensation was payable in two equal installments. The first installment was paid in March of 2007, and the second installment was paid in January of 2008. There was no cash incentive plan established for the years of 2007 or 2008. |
(3) | Other compensation represents amounts paid as employer matching contributions under our section 401(k) qualified retirement savings plan and health, vision and dental insurance premiums paid by the Company on behalf of Messrs. Lawson and Goddard. |
| SUMMARY COMPENSATION TABLE |
| Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (3) | Total ($) |
| | | | | | | | |
Daniel H. Cushman President and Chief Executive Officer | 2011 | 425,000 | 60,000 | - | - | 2,184 | 487,184 |
| 2010 | 412,500 | 50,000 | 152,160 | - | 28,152 | 642,812 |
| 2009 | 190,769 | 55,000 | - | - | 13,965 | 259,734 |
| | | | | | | | |
Larry J. Goddard Executive Vice President | 2011 | 280,000 | 15,000 | - | - | 5,390 | 300,390 |
| 2010 | 265,894 | 30,000 | 70,006 | - | 5,390 | 371,290 |
| 2009 | 245,210 | - | - | - | 5,390 | 250,600 |
| | | | | | | | |
Lance K. Stewart Vice President of Finance, Chief Financial Officer, Secretary and Treasurer | 2011 | 170,000 | 25,000 | - | - | 2,405 | 197,405 |
| 2010 | 147,949 | 15,000 | 52,838 | - | 1,908 | 217,695 |
| | | | | | | |
| | | | | | |
| | | |
| (1) | Amounts shown for 2011 and 2010 represent a discretionary cash bonus paid to each executive officer. During 2009, Mr. Cushman was paid $55,000 as a hiring bonus when he agreed to serve as President and Chief Executive Officer. This bonus was intended to cover expenses associated with the sale of his home in Nebraska, as well as, relocation costs related to his move to Northwest Arkansas. In the event that Mr. Cushman terminates his employment prior to June 28, 2012, he will be required to repay the entire amount. | |
| | | |
| (2) | Amounts shown do not reflect compensation actually received by the named executive officer. Instead, the amounts shown are the aggregate grant date fair value computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the value of stock and stock option awards are set forth under Note 12 “Share-Based Compensation” to our 2010 consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data" of our Annual Report to the SEC on Form 10-K for the year ended December 31, 2010. Amounts shown for 2010 included performance-based options valued at $25,360, $6,606, and $5,288, respectively, for Messrs. Cushman, Goddard, and Stewart, as determined based on the expected outcome of the performance conditions. The maximum value of these performance-based options, assuming the highest level of performance, for Messrs. Cushman, Goddard, and Stewart, would have been $162,304, $50,720, and $40,576, respectively. | |
| | | |
| (3) | During 2011, other compensation for Mr. Cushman represents amounts paid as employer matching contributions under our section 401(k) qualified retirement savings plan. During 2011, other compensation for Mr. Goddard represents amounts paid as employer matching contributions under our section 401(k) qualified retirement savings plan and for health, vision and dental insurance premiums paid by the Company on his behalf. During 2011, other compensation for Mr. Stewart represents amounts paid as employer matching contributions under our section 401(k) qualified retirement savings plan. | |
| | | |
Employment Agreements
As discussed above, we have entered into employment agreements with our executive officers, Messrs. Weaver, Lawson and Goddard. The initial term of ourthe employment agreement with Mr. Weaver is fromCushman began on July 10, 2006 to July 10,13, 2009. We have an option to extend the agreement for two additional years, one year at a time. The agreement provides Mr. Weaver withCushman currently earns an annual base salary of $500,000$425,000. In addition, at the beginning of his employment, he received a bonus of $55,000 to be used at his discretion toward expenses for eachhis relocation to Tontitown, Arkansas, and the sale of his home in Nebraska. In the first two years, and of $550,000event that Mr. Cushman terminates his employment prior to June 28, 2012, he will be obligated to repay the bonus. PTSI had also agreed to reimburse Mr. Cushman for the third year. If we exercise our optionup to extend the agreement, the agreement provides Mr. Weaver with an annual base salary of $550,000$1,800 per month for the first year of the extension, and of $600,000up to eighteen months for the second year of the extension.temporary living expenses.
The initial termsTable of our employment agreements with Messrs. Lawson and Goddard are from June 1, 2006 through June 1, 2010. We have an option to extend each of the agreements for one additional year. Our agreement with Mr. Lawson provides him with an annual base salary of $300,000 for the first year of the agreement, and of $310,000, $335,000 and $355,000 for the second, third and fourth years of the agreement. If we exercise our option to extend our agreement with Mr. Lawson for an additional year, the agreement provides Mr. Lawson with an annual base salary of $370,000 for the additional year. Our agreement with Mr. Goddard provides him with an annual base salary of $225,000 for the first year of the agreement, and of $235,000, $250,000 and $265,000 for the second, third and fourth years of the agreement. If we exercise our option to extend our agreement with Mr. Goddard for an additional year, the agreement provides Mr. Goddard with an annual base salary of $280,000 for the additional year. Under theThe Company currently does not have a written employment agreements, ouragreement with Mr. Goddard. Mr. Goddard currently earns an annual salary of $280,000.
The Company currently does not have a written employment agreement with Mr. Stewart. Mr. Stewart currently earns an annual salary of $170,000.
Our executive officers may also participate in bonus and other incentive plans that are approved from time to time by our Board of Directors or Compensation and Stock Option Committee. The executive officers are also entitled to any fringe benefits that we may provide for our employees in the normal course of our business. Additional information regarding the employment agreements, including compensation payable to the executive officers on termination of employment and their non-compete, non-solicitation and confidentiality obligations, is included below under the heading “Potential Payments Upon Termination or Change in Control.”
Our executive officers agreed voluntarily that beginning January 1, 2009 their base salaries would be reduced by 5% from the applicable amounts detailed in their employment agreements until such time as financial results for the Company improve. The 5% base salary reduction is not a deferral to be paid to the executive officers in future periods.
Salary and Bonus Compared to Total Compensation
We have not established a proportion that salary and bonus should be of our executive officers' total compensation. As indicated in the Summary Compensation Table, the proportion for 20082011 that salary and bonus were of total compensation ranged from 98% to 100% for our executive officers.
Outstanding Equity Awards at 20082011 Fiscal Year-End
The following table provides information as of December 31, 20082011, regarding equity awards, including unexercised stock options, for each of the named executive officers.
| | | Option Awards |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | Option Expiration Date |
| Robert W. Weaver | | | 72,000 | (1) | | | — | | | | — | | | | 23.22 | | 08/27/12 |
| W. Clif Lawson | | | 54,000 | (2) | | | — | | | | — | | | | 23.22 | | 08/27/12 |
| Larry J. Goddard | | | 54,000 | (2) | | | — | | | | — | | | | 23.22 | | 08/27/12 |
____________ | Option Awards | | Stock Awards |
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: # of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested ($) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| | | | | | | | | | |
| Daniel H. Cushman | 4,000 (1) | 16,000 (1) | - | 11.22 | 11/30/20 | | - | - | - | - |
| - | 2,000 (2) | - | 11.22 | 11/30/20 | | - | - | - | - |
| | | | | | | | | | |
| | | | | | | | | | |
| Larry J. Goddard | 2,000 (1) | 8,000 (1) | - | 11.22 | 11/30/20 | | - | - | - | - |
| - | 521 (2) | - | 11.22 | 11/30/20 | | - | - | - | - |
| 54,000 (3) | - | - | 23.22 | 08/27/12 | | | | | |
| | | | | | | | | | |
| Lance K. Stewart | 1,500 (1) | 6,000 (1) | - | 11.22 | 11/30/20 | | - | - | - | - |
| - | 417 (2) | - | 11.22 | 11/30/20 | | - | - | - | - |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| (1) | OptionOptions granted on 11/30/2010 and vest at a rate of 20% annually as determined by the grant date. | |
| | |
| (2) | Performance-based options granted on 11/30/2010 which were earned during the second quarter of 2011 as a result of meeting specified performance criteria during the second quarter of 2011. Performance-based options vest at a rate of 20% annually from the date the option was earned. | |
| | |
| (3) | Options granted on 8/28/2002 of which 18,000 options vested for 24,000 sharesimmediately, 12,000 options vested on August 28, 2002, and for 16,000 shares oneach of the dates of March 15, 2003, March 15, 2006 and March 15, 2007. | |
| | |
(2) | Option vested for 18,000 shares on August 28, 2002, and for 12,000 shares on March 15, 2003, March 15, 2006, and March 15, 2007. |
Potential Payments Upon Termination or Change In Control
TheGenerally, employment agreements that we have enteredenter into with any of our executive officers provide for payments that may be made to ourthe executive officers following termination of their employment. These potential payments for any employment agreement currently in effect are discussed below and quantified in the table that follows. We do not have any agreements or plans that provide for payments to any of our executive officers based on the occurrence of a change in control of PTSI.
No Payments If There WereIs a Termination for Just Cause
In the event that one of our executive officers wereis terminated for just cause, including conviction of a crime, moral turpitude, gross negligence in the performance of duties, intentional failure to perform duties, insubordination, or dishonesty, we would have no obligation to pay base salary or benefits beyond the last day worked.
Payments Upon Death
In the event of the death of one of our executive officers, we would pay histhe executive officer the base salary through the date of his death.
Payments Upon Disability
In the event that one of ouran executive officersofficer becomes disabled and is unable to perform histheir duties, we may terminate histheir employment. If an executive officer'sMr. Cushman’s employment is terminated due to disability, then he is entitled to receive his base salary and benefits for 126 months following the termination of his employment.
Payments Upon Termination Based on Our Best Interest
In the event that one of ouran executive officersofficer is terminated by our Board of Directors based upon a determination that such action would serve ourthe Company’s best interest, we would generally have no obligation to pay base salary or benefits beyond the executive officer islast day worked. However, Mr. Cushman would be entitled to receive his base salary and benefits for a period of twelve6 months following termination.the termination of his employment, unless the Board of Directors elects to extend his Covenant Not to Compete for one year, in which case he will be entitled to receive his base salary and benefits for a period of 12 months.
Payments Upon Resignation, Including Retirement
Each of our executive officersMr. Cushman has the right to resign by providing three months written notice to us. In the event that an executive officerMr. Cushman resigns and gives us the required three months notice, we may terminate his employment before the end of the three month notice period. In such event, the executive officerMr. Cushman is entitled to receive his base salary and benefits through the end of the three month period.
Obligations of Executive Officers
Under thehis employment agreements, each of the executive officersagreement, Mr. Cushman has agreed not to compete with, or solicit or retain business that is competitive with, our business, or that of specified affiliates of our directors, Mr. Manuel Moroun and Mr. Matthew Moroun, for one year after the executive officer'shis employment with us terminates. The executive officers haveMr. Cushman has an additional condition that in the event he is terminated because such termination is in the best interest of the Company, the duration of his covenant not to compete is for six months, unless the Board of Directors elects to extend his covenant not to compete for one year, in which case he will be entitled to receive his base salary and benefits for a period of 12 months. Mr. Cushman has also agreed that theyhe will not at any time encourage, solicit or otherwise attempt to persuade any of our employees or any employees of the specified affiliates to leave our employment or employment with the specified affiliates. If any of the executive officersMr. Cushman were to hire from us one of our employees, they havehe has agreed to pay us 30% of the employee's first year's gross compensation. Under the employment agreements, the executive officers haveagreement, Mr. Cushman has also agreed to maintain the confidentiality of our proprietary information.
Stock Options
Each of our executive officersMr. Goddard holds an option to acquire shares of our common stock that was granted on August 28, 2002, under our 1995 Stock Option Plan. In general, stock options granted under the 1995 Stock Option Plan that are vested at the time employment terminates may be exercised by the executive officer within three months after his termination of employment. However, if his employment terminates due to death or disability, his vested stock options may be exercised within one year after the date of termination, but not later than the expiration date of the option.
Messrs. Cushman, Goddard and Stewart hold options to acquire shares of our common stock that were granted on November 30, 2010, under our 2006 Stock Option Plan. In general, stock options granted under the 2006 Stock Option Plan that are vested may be exercised within three months after termination of employment without cause. However, if employment terminates due to death or disability, earned shares and vested shares may be exercised within one year after the date of termination, but not later than the expiration date of the option.
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Table of Payments Upon Termination of Employment
The following table provides information regarding amounts payable to the named executive officers in connection with a termination of their employment, including amounts payable under their employment agreements. The amounts shown assume that termination of employment was effective as of December 31, 2008,2011, the last business day of our 20082011 fiscal year, and include estimates of the amounts that would be paid. Amounts payable under these provisions would be paid in equal installments pursuant to the Company’s regularly scheduled payrolls. The actual amounts would only be determined upon an officer's termination of employment.
| | | Robert W. Weaver | |
Benefits and Payments Upon Termination | | Just Cause ($) | | | Death ($) | | | Disability ($) | | | Best Interest of the Company ($) | | | Resignation ($) | | | Retirement ($) | |
| Base Salary | | | — | | | | — | | | | 550,000 | | | | 550,000 | | | | 137,500 | | | | — | |
| Non-Equity Incentive Plan Compensation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| All Other Compensation | | | — | | | | — | | | | --- | | | | --- | | | | --- | | | | — | |
| Total | | | — | | | | — | | | | 550,000 | | | | 550,000 | | | | 137,500 | | | | — | |
| | | W. Clif Lawson | |
Benefits and Payments Upon Termination | | Just Cause ($) | | | Death ($) | | | Disability ($) | | | Best Interest of the Company ($) | | | Resignation ($) | | | Retirement ($) | |
| Base Salary | | | — | | | | — | | | | 346,667 | | | | 346,667 | | | | 83,750 | | | | — | |
| Non-Equity Incentive Plan Compensation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| All Other Compensation | | | — | | | | — | | | | 2,400 | | | | 2,400 | | | | 600 | | | | — | |
| Total | | | — | | | | — | | | | 349,067 | | | | 349,067 | | | | 84,350 | | | | — | |
| | | Larry J. Goddard | | | Daniel H. Cushman |
Benefits and Payments Upon Termination | | Just Cause ($) | | | Death ($) | | | Disability ($) | | | Best Interest of the Company ($) | | | Resignation ($) | | | Retirement ($) | | Benefits and Payments Upon Termination | Just Cause ($) | Death ($) | Disability ($) | Best Interest of the Company ($)(1) | Resignation ($) | Retirement ($) |
| Base Salary | | | — | | | | — | | | | 258,750 | | | | 258,750 | | | | 62,500 | | | | — | | Base Salary | - | 212,500 | 425,000 | 106,250 | - |
| Non-Equity Incentive Plan Compensation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Non-Equity Incentive Plan Compensation | - | - |
| All Other Compensation | | | — | | | | — | | | | 2,400 | | | | 2,400 | | | | 600 | | | | — | | All Other Compensation | - | - |
| Total | | | — | | | | — | | | | 261,150 | | | | 261,150 | | | | 63,100 | | | | — | | |
| | | | | |
| Total: | | Total: | - | 212,500 | 425,000 | 106,250 | - |
| | | | |
| | | | |
| | | | Larry J. Goddard |
| Benefits and Payments Upon Termination | | Benefits and Payments Upon Termination | Just Cause ($) | Death ($) | Disability ($) | Best Interest of the Company ($) | Resignation ($) | Retirement ($) |
| Base Salary | | Base Salary | - | - |
| Non-Equity Incentive Plan Compensation | | Non-Equity Incentive Plan Compensation | - | - |
| All Other Compensation | | All Other Compensation | - | - |
| | | | | |
| Total: | | Total: | - | - |
| | | | |
| | | | |
| | | | Lance K. Stewart |
| Benefits and Payments Upon Termination | | Benefits and Payments Upon Termination | Just Cause ($) | Death ($) | Disability ($) | Best Interest of the Company ($) | Resignation ($) | Retirement ($) |
| Base Salary | | Base Salary | - | - |
| Non-Equity Incentive Plan Compensation | | Non-Equity Incentive Plan Compensation | - | - |
| All Other Compensation | | All Other Compensation | - | - |
| | | | | |
| Total: | | Total: | - | - |
| | | | | |
| (1) | Mr. Cushman is entitled to receive his base salary and benefits for a period of six months following termination in the best interest of the Company, unless the Board of Directors elects to extend his covenant not to compete for one year, in which case he will be entitled to receive his base salary and benefits for a period of 12 months. This calculation assumes that the Board of Directors would elect to extend Mr. Cushman's covenant not to compete for one year. If this option is not exercised the amount owed to Mr. Cushman for termination in the best interest of the Company would be $212,500. |
Director Compensation for 20082011
The following table provides information about the compensation of our directors for the year ended December 31, 2008.2011.
Name(1) | | Fees Earned or Paid in Cash ($) | | | Options Awards ($)(2) | | | All Other Compensation ($) | | | Total ($) | |
| Frederick P. Calderone | | | 17,200 | | | | 9,963 | | | | — | | | | 27,763 | |
| Frank L. Conner | | | 23,800 | | | | 9,963 | | | | — | | | | 33,763 | |
| W. Scott Davis | | | 17,800 | | | | 9,963 | | | | — | | | | 27,763 | |
| Christopher L. Ellis | | | 27,800 | | | | 9,963 | | | | — | | | | 37,763 | |
| Manuel J. Moroun | | | 14,200 | | | | 9,963 | | | | 100,000 | (3) | | | 124,163 | |
| Matthew T. Moroun | | | 107,200 | | | | 9,963 | | | | — | | | | 117,163 | |
| Daniel C. Sullivan | | | 17,800 | | | | 9,963 | | | | — | | | | 27,763 | |
| Charles F. Wilkins | | | 24,400 | | | | 9,963 | | | | — | | | | 34,363 | |
____________| Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) (3) | Total ($) |
| | | | | | | | |
| Frederick P. Calderone | 15,400 | - | 12,276 | - | - | - | 27,676 |
| Frank L. Conner | 22,800 | - | 12,276 | - | - | - | 35,076 |
| W. Scott Davis | 18,400 | - | 12,276 | - | - | - | 30,676 |
| Christopher L. Ellis (4) | 11,200 | - | 12,276 | - | - | - | 23,476 |
| Manuel J. Moroun | 11,800 | - | 12,276 | - | - | 100,000 | 124,076 |
| Matthew T. Moroun | 105,400 | - | 12,276 | - | - | - | 117,676 |
| Daniel C. Sullivan | 16,000 | - | 12,276 | - | - | - | 28,276 |
| Charles F. Wilkins | 20,200 | - | 12,276 | - | - | - | 32,476 |
| | | | | | | | |
| | | | | | | | |
| (1) | Our CEO and President, and Chief Executive Officer, Mr. Weaver,Cushman, who is also a director, has been omitted from this table because he receives no specialadditional compensation for serving on our Board of Directors. Mr. Weaver'sCushman’s compensation is included in the Summary Compensation Table. | |
| | |
| (2) | The amounts shown represent the compensation expense that we recognized in 20082011 for option awards for our non-employee directors, determined in accordance with SFAS 123(R).FASB ASC Topic 718. Information regarding assumptions made for purposes of determining these amounts is in Note 1211 “Share-Based Compensation” to our 20082011 consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data" of our Annual Report to the SEC on Form 10-K for the year ended December 31, 2008.2011. On March 2, 2008,2011, each of our non-employee directors was awarded an option for 2,000 shares of our common stock under our 2006 Stock Option Plan. The grant date fair value of each of these options, determined in accordance with SFAS 123(R) is $4.98FASB ASC Topic 718 was $6.14 per share. As of December 31, 2008,2011, our non-employee directors held the following option awards to acquire our common stock: Messrs. Calderone, Conner, Manuel Moroun and Matthew Moroun, options for 10,000 shares, Mr.,shares; Messrs. Calderone, Conner, Davis, Sullivan and Wilkins, options for 8,000 shares, Messrs. Ellis and Sullivan, options for 6,000 shares, and Mr. Davis options for 2,000 shares. | |
| | |
| (3) | This amount wasAmounts paid to Mr. Manuel Moroun for 20082011 represented payments under his Consulting Agreement with PTSI. The Consulting Agreement was entered into on December 6, 2007, has an initial term of one year, and automatically renews for four additional one-year periods, unless earlier terminated due to death, disability or by mutual agreement. Pursuant to the agreement, Mr. Manuel Moroun provides us with consultation and advice as to the management and operation of PTSI, and such other consulting activities as we may reasonably request and as are reasonably acceptable to him. For the services that Mr. Manuel Moroun renders pursuant to the agreement, we pay him a consulting fee of $100,000 per year, in quarterly installments. | |
| | |
| (4) | Mr. Ellis retired from the Board on May 26, 2011. | |
Compensation Arrangements for Non-employee Directors
Director compensation is determined by our Board of Directors. For 2008,2011, we paid our non-employee directors an annual retainer of $10,000, and a fee of $1,800 for each meeting of the Board or its committees that they attended in person, and $600 for each meeting that they attended by telephone. The Chairman of the Board, which is a non-officer position, is paid an annual retainer of $100,000; and the Chairman of the Audit Committee is paid an additional annual retainer of $4,000. We reimburse our directors for expenses that they incur in attending Board and committee meetings, including expenses for food, lodging and transportation. Our directors are currently paid the same amounts for retainer and meeting fees as they were paid in 2008.2011.
Our 2006 Stock Option Plan provides for an annual grant of a stock option to each of our non-employee directors through 2016. Each option entitles the director to purchase 2,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the date of grant. Each option is exercisable from its date of grant through the fifth anniversary of that date, unless terminated earlier in accordance with the plan. The exercise prices for the options granted to our non-employee directors in 2007, 2008,2009, 2010, and 20092011 were $22.92, $14.98,$3.84, $14.32, and $3.84$11.75 per share respectively.
BENEFICIAL OWNERS AND MANAGEMENT
Security OwnershipUnder the proxy rules of Certain
Beneficial Ownersthe SEC, a person who directly or indirectly has or shares voting power or investment power with respect to a security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and Management
investment power is the power to dispose of or direct the disposition of shares. Shares as to which voting power or investment power may be acquired within 60 days are also considered as beneficially owned under the proxy rules.
The following table below shows the number of our shares of common stock beneficially ownedsets forth certain information as of March 31, 20092012, regarding beneficial ownership of our Common Stock by:
(i) each director and nominee for director;
person who is known to us to own beneficially more than five percent (5%) of our Common Stock; (ii) each of our directors; (iii) each of the named executive officer namedofficers in the Summary Compensation Table underof this annual report; and (iv) the heading “Executive Compensation”;
all oftotal for our current directors and named executive officers as a group; and
group.
each stockholder known by us to beneficially own more than 5% of our outstanding common stock.
Beneficial Owner | | Shares Beneficially Owned(1) | | | Percent of Class(9) | |
| Matthew T. Moroun• | | | 4,725,373 | (2)(3) | | | 50.2 | % |
| Robert W. Weaver• | | | 316,428 | | | | 3.3 | % |
| Daniel C. Sullivan• | | | 28,000 | | | | * | |
| Frank L. Conner• | | | 12,000 | | | | * | |
| Frederick P. Calderone• | | | 10,000 | | | | * | |
| Manuel J. Moroun• | | | 10,000 | (4) | | | * | |
| Charles F. Wilkins• | | | 10,000 | | | | * | |
| W. Scott Davis• | | | 31,500 | (5) | | | * | |
| Christopher L. Ellis• | | | 8,000 | | | | * | |
| W. Clif Lawson | | | 94,500 | (6) | | | 1.0 | % |
| Larry J. Goddard | | | 76,213 | | | | * | |
| FMR LLC | | | 829,348 | (7) | | | 8.8 | % |
| Dimensional Fund Advisors LP | | | 638,011 | (8) | | | 6.8 | % |
| Directors and executive officers as a group (11 persons) | | | 5,322,014 | | | | 55.1 | % |
____________
| Name or Group of Beneficial Owner | Shares Owned | Shares Held in Trust | Options Exercisable Within 60 Days | Shares Beneficially Owned (1) | Percent of Class (2) |
| 5% Stockholders: | | | | | |
| Dimensional Fund Advisors LP (3) | 633,531 | - | - | 633,531 | 7.28% |
| Franklin Resources, Inc. (4) | 535,000 | - | - | 535,000 | 6.15% |
| Directors and Named Executive Officers: | | | | | |
| Frederick P. Calderone | - | - | 8,000 | 8,000 | * |
| Frank L. Conner | 4,375 | - | 8,000 | 12,375 | * |
| Daniel H. Cushman | 2,000 | - | 4,000 | 6,000 | * |
| W. Scott Davis (5) | 26,000 | 2,500 | 4,000 | 32,500 | * |
| Larry J. Goddard | 12,213 | - | 56,000 | 68,213 | * |
| Matthew T. Moroun (6) | 4,715,373 | - | 10,000 | 4,725,373 | 54.24% |
| Manuel J. Moroun (7) | - | - | 10,000 | 10,000 | * |
| Lance K. Stewart | - | - | 1,500 | 1,500 | * |
| Daniel C. Sullivan | 23,000 | - | 8,000 | 31,000 | * |
| Charles F. Wilkins | - | - | 8,000 | 8,000 | * |
| Directors and named executive officers as a group | 4,782,961 | 2,500 | 117,500 | 4,902,961 | 55.59% |
| Total Outstanding Shares as of March 31, 2012 | | | | | 8,701,607 |
| | | | | | | |
•* | Member of our Board of Directors |
| Denotes less than one percent. | |
* | Less than 1%. |
| | |
| (1) | The number of shares beneficially owned includes any shares over which the person has sole or shared voting power or investment power and also any shares that the person can acquire within 60 days of March 31, 20092012, through the exercise of any stock option or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his spouse) over the shares set forth in the table. Includes shares that may be acquired pursuant to stock options granted under our stock option plans that are currently exercisable or become exercisable within 60 days of March 31, 2009 as follows: 72,000 shares for Mr. Weaver, 54,000 shares for Messrs. Lawson and Goddard, 10,000 shares for Messrs. Calderone, Conner, Manuel Moroun, Matthew Moroun, and Wilkins, 8,000 shares for Messrs. Ellis and Sullivan, 4,000 shares for Mr. Davis, and 250,000 shares for all of our directors and executive officers as a group.2012. | |
| | |
| (2) | The percentages shown are based on the 8,701,607 shares of our common stock outstanding as of March 31, 2012, plus the number of shares that the named person or group has the right to acquire within 60 days of March 31, 2012. For purposes of computing the percentage of outstanding shares of common stock held by each person or group, any shares the person or group has the right to acquire within 60 days of March 31, 2012 are deemed to be outstanding with respect to such person or group, but are not deemed to be outstanding for the purpose of computing the percentage of ownership of any other person or group. | |
| | |
| (3) | Based upon a Schedule 13G amendment filed by Dimensional Fund Advisors LP, a Delaware Limited Partnership, dated February 10, 2012, which indicates that as of December 31, 2011, Dimensional Fund Advisors LP had the sole power to vote and dispose of 633,531 shares as an investment advisor or manager to investment companies, trusts and separate accounts that own the 633,531 shares. The address of Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746. We make no representation as to the accuracy or completeness of the information reported. | |
| | |
| (4) | Based upon a Schedule 13G amendment, dated January 25, 2011, filed by Franklin Resources, Inc., a Delaware Corporation, and related parties, which indicates that as of December 31, 2011, they had shared power to dispose of 535,000 shares. The Schedule 13G amendment was filed by Franklin Resources, Inc., which provides investment management services. The address of Franklin Resources, Inc. is One Franklin Parkway, San Mateo, California 94403. We make no representation as to the accuracy or completeness of the information reported. | |
| | |
| (5) | Includes 1,633,3732,500 shares held in trusts for Mr. Davis' children, for which Mr. Davis serves as trustee. | |
| | |
| (6) | Includes 1,623,373 shares owned directly, 10,000 options available for exercise, and 3,092,000 shares held in a trust of which Mr. Matthew Moroun is a co-trustee and a beneficiary (the “Moroun Trust”). Mr. Hal M. Briand is co-trustee with Mr. Matthew Moroun of the Moroun Trust and may therefore also be deemed to beneficially own the shares held by the Moroun Trust. The business address of each of Messrs. Moroun and Briand is 12225 Stephens Road, Warren, Michigan 48091. |
(3) | Mr. Mathew Moroun disclosed in a Schedule 13D amendment filed with the Securities and Exchange Commission on March 23, 2009, that from March 6, 2009, to March 20, 2009, he purchased an aggregate of 106,187 shares of our common stock, par value $.01 per share in open market transactions or by exercising stock options he held. Mr. Moroun paid an aggregate purchase price of $509,684 for these shares. The source of funds used to purchase theses shares was Mr. Moroun’s personal funds. As a result of these, and subsequent purchases, Mr. Moroun beneficially owns an aggregate of 4,725,373 shares, or 50.2% of the outstanding common stock as of March 31, 2009, including currently exercisable stock options to purchase 10,000 shares of common stock.
In a Schedule 13D amendment filed with the SEC on March 6, 2009, Mr. Moroun disclosed his intention to ask the Board of Directors of the Company, once he attains over 50% beneficial ownership interest in the Company, (i) to authorize an issuer share repurchase program for up to 1,000,000 shares of our Common Stock, to be implemented as directed by such Board of Directors, and (ii) to consider becoming a “controlled company” under current NASDAQ Global Market rules, which would not require the Company to comply with all of the NASDAQ Global Market’s corporate governance standards as they relate to director independence. As of the date of this Report, no such actions have been presented to the Board of Directors for consideration.
There are no arrangements or undertakings known to us between Mr. Moroun and his associates and the Board of Directors or any other shareholders of the Company with respect to election of directors of the Company or other matters relating to the Company. Additionally, there are no arrangements known to us, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change of control of the Company.
|
| | | |
(4)(7) | Does not include the 4,725,373 shares shown in the table as being beneficially owned by Mr. Manuel Moroun's son, Mr. Matthew Moroun. |
| | |
(5) | Includes 2,500 shares held in trusts for Mr. Davis' children, for which Mr. Davis serves as trustee. |
| | |
(6) | Includes 1,500 shares held in a trust for Mr. Lawson's sister, for which Mr. Lawson is the trustee. |
| | |
(7) | Based upon a Schedule 13G amendment filed by FMR LLC, dated February 17, 2009, and related parties, which indicates that as of December 31, 2008, they had the sole power to dispose of 829,348 shares. The Schedule 13G amendment indicates that all 829,348 shares are owned by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, an investment adviser registered under Section 203 of the investment Advisors Act of 1940. The address of FMR LLC is 82 Devonshire Street, Boston, Massachusetts 02109. We make no representation as to the accuracy or completeness of the information reported. |
| |
(8) | Based upon a Schedule 13G amendment filed by Dimensional Fund Advisors LP, A Delaware Limited Partnership, dated February 9, 2009, which indicates that as of December 31, 2008, Dimensional Fund Advisors LP, a Delaware Limited Partnership, had the sole power to vote and dispose of 638,011 shares as a an investment advisor or manager to investment companies, trusts and separate accounts that own the 638,011 shares. The address of Dimensional Fund Advisors LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746. We make no representation as to the accuracy or completeness of the information reported. |
(9) | The percentages shown are based on the 9,409,607 shares of our common stock outstanding as of March 31, 2009, plus the number of shares that the named person or group has the right to acquire within 60 days of March 31, 2009. For purposes of computing the percentage of outstanding shares of common stock held by each person or group, any shares the person or group has the right to acquire within 60 days of March 31, 2009 are deemed to be outstanding with respect to such person or group, but are not deemed to be outstanding for the purpose of computing the percentage of ownership of any other person or group. |
SectionSECTION 16(a) Beneficial Ownership Reporting ComplianceBENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, and executive officers and persons who own more than 10% of our outstanding common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Executive officers, directors and greater than 10% stockholders are also required to furnish us with copies of the reports that they file. To our knowledge, based solely on a review of the copies of the reports furnished to us and representations received from our directors and executive officers, we believe that all reports required to be filed under Section 16(a) for 20082011 were timely filed, except that one of our executive officers, W. Clif Lawson, filed a late report on Form 4 relating to purchases of stock in November of 2008.filed.
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Independent Public Accountants
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our consolidated financial statements as of and for the fiscal year ended December 31, 2011, were audited by Grant Thornton LLP, an independent registered public accounting firm. In 2011, the Audit Committee has selected Grant Thornton LLP as our principal independent auditor for the year ending December 31, 2009. 2012.
Stockholder’s ratification of the selection of Grant Thornton LLP to be our independent registered public accounting firm for fiscal year 2012 is not required by our Bylaws or otherwise. However, the Board is submitting the selection of the independent registered public accounting firm to the stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee may, at its discretion, direct the appointment of a different independent registered accounting firm at any time during the year if it determines that such change is in the best interests of PTSI and our stockholders.
We are not presently expecting that representatives of Grant Thornton LLP will attend the annual meeting of stockholders.
Your Board of Directors Recommends that Stockholders Vote
Principal Accountant Fees and ServicesFOR
the Ratification of the Appointment of Grant Thornton LLP
as PTSI’s Independent Registered Public Accounting Firm
for the 2012 Calendar Year
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table shows the fees for professional services of Grant Thornton for audit and other services they provided to us for 20082011 and 2007.2010.
| | 2008 | 2007 | 2011 | | 2010 |
| Audit Fees(1) | $ 250,000 | $ 244,000 | |
| Audit Fees (1) | | $197,400 | | $195,000 |
| Audit-Related Fees | 0 | 0 | - | | - |
| Tax Fees | 0 | 0 | - | | - |
| All other fees | 0 | 0 | |
| All Other Fees | | - | | - |
| Total Fees | | $197,400 | | $195,000 |
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| (1) | Includes the aggregate fees billed for professional services rendered for 20082011 and 20072010 for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q. Also includes for 2007, $5,000 for services relating to an S-8 registration statement that we filed with the SEC. |
The Audit Committee pre-approves audit services and non-audit services that are to be performed for us by our independent auditor. The Audit Committee has delegated authority to its chairman, or any two of its other members acting together, to approve, between meetings of the Audit Committee, audit services and permissible non-audit services. Approvals between meetings are required to be reported to the Audit Committee at its next meeting. In addition to there being engagement letters for audit services, the Audit Committee has determined that there should be an engagement letter for any non-audit services that are to be performed by the independent auditor. All of the services described in the table above were pre-approved by the Audit Committee, and the authority delegated to members of the Audit Committee was not used.
Transactions with Related Persons
We have a written policy requiring that our Audit Committee review and approve related person transactions that involve us and are of the type that are required to be disclosed in our proxy statement by SEC rules. A transaction may be a related person transaction if any of our directors, executive officers, owners of more than 5% of our common stock, or their immediate family have a material interest in the transaction and the amount involved exceeds $120,000. The policy authorizes the Audit Committee to approve a related person transaction if it determines that the transaction is at least as favorable to us as could have been obtained if the transaction had been with a person who is not related to us, or is in our best interest.
Mr. Matthew Moroun is Chairman of our Board of Directors, which is designated as a non-officer position, a member of the Executive Committee of our Board of Directors, and our largest stockholder. He is the controlling stockholder, Vice Chairman and a director of CenTra, Inc., a transportation holding company based in Warren, Michigan. He is also the Chairman and controlling stockholder of Oakland Financial Corporation, an insurance holding company, and its subsidiaries, based in Sterling Heights, Michigan. Our director, Mr. Manuel Moroun, is the President and Chief Executive Officer of CenTra, and controls a trust that is the other major stockholder of CenTra. He is also a stockholder of Oakland Financial Corporation.
During 2008,2011, certain subsidiaries of CenTra and other companies owned or controlled by our directors, Mr. Manuel Moroun and Mr. Matthew Moroun, paid us a total of $578,620.$3,861,023. These payments represent freight transportation charges of $550,166,$2,889,506, maintenance services performed in our maintenance facilities and maintenanceof $435,597, charges paid by us to third parties on behalf of the subsidiaries and affiliates of CenTra and then charged back at the amount paid of $28,454.$16,971, real estate rent and upkeep of $375,608, and leases of revenue equipment of $143,341.
During 2008,2011, we made payments to certain subsidiaries of CenTra and other companies owned or controlled by our directors, Mr. Manuel Moroun and Mr. Matthew Moroun, in the aggregate amount of $8,615,010.$11,030,222. These payments are described below.
Payments of $346,770 were made to a subsidiary of CenTra in the amount of $321,052 for real estate leases. Properties leased from the subsidiaryleases during 2011 which include office and maintenance facilities in two states, and trailer drop yards in ninethirteen states. The leases are generally month to month leases with automatic monthly renewal provisions.
Property is also leased from an affiliate of CenTra that is used for trailer drop yards. Payments were made to the affiliate in the amount of $76,286 during 2008 and represent lease payments$8,100 were made in accordance with lease agreements that contain automatic monthly renewal provisions.
We purchased a terminal in Laredo, Texas from an affiliateto certain subsidiaries of CenTra for $5,920,969, of which $4,500,000 was paid as of December 31, 2008. The remaining $1,420,969 was paid in February 2009, subsequent to the completion of an independent appraisal.freight transportation charges during 2011.
Payments in the amount of $248,102 were made to a subsidiary of CenTra during 2008. These payments were$93,164 for parts and labor charges incurred to repair our equipment.equipment and payments of $103,154 for management services were made to a subsidiary of CenTra during 2011.
We made payments to subsidiaries of Oakland Financial Corporation during 20082011 in the amount of $23,857$17,910 for insurance premiums paid pursuant to agreements to provide insurance coverage to certain of our independent contractors. The underlying agreements are made directly with the independent contractors. The full amount of these payments to the subsidiaries of Oakland Financial Corporation is recouped by us from the independent contractors.
We purchase physical damage insurance coverage on our tractors and trailers through an unaffiliated insurance broker, which is written by a subsidiary of Oakland Financial Corporation. In 2008,During 2011, we made payments related tofor these policies in the amount of $2,272,098,$1,452,690, and received $1,596,939$1,580,180 in paymentpayments for claims filed under these policies.filed.
Beginning in September 2009, we secured coverage for commercial auto and general liability insurance issued through an unaffiliated insurance company. Abroker, which is written by a subsidiary of Oakland Financial Corporation serves as third-party administratorCorporation. In 2011 we made premium payments of $9,008,434 for this insurance. In 2008, the subsidiary received $50,000 from the unaffiliated insurance company for handling the claims under this program. Under the commercial auto liability policy, the subsidiary adjusts the claims (which are subject to a $2,500 deductible) and remits the full amounts of the settlements to the claimants. The subsidiary invoices us for the $2,500 deductible amount, for which we paid a total of $1,173,615 in 2008.general liability coverage under these policies.
On December 6, 2007, we entered into a Consulting Agreement with Mr. Manuel Moroun. The agreement has an initial term of one year, and automatically renews for four additional one-year periods, unless earlier terminated due to death, disability or by mutual agreement. Pursuant to the agreement, Mr. Manuel Moroun provides us with consultation and advice as to the management and operation of PTSI, and such other consulting activities as we may reasonably request and as are reasonably acceptable to him. For the services that Mr. Manuel Moroun renders pursuant to the agreement, we pay him a consulting fee of $100,000 per year, which is paid in quarterly installments.
We believe that substantially all of the above transactions were entered into on terms at least as favorable to us as could have been obtained from persons who were not related to us, and each of the transactions was in our best interest. We expect to continue transactions with subsidiaries of CenTra and other companies owned or controlled by our directors, Mr. Manuel Moroun and Mr. Matthew Moroun, in 20092012 that are similar to those described above.
Additional information concerning us, including our financial statements, is provided in our 20082011 Annual Report to Stockholders that accompanies this proxy statement. Our Annual Report on Form 10-K for the year ended December 31, 2008,2011, as filed with the SEC, is available to stockholders who make a written request for it to our Secretary, Larry J. Goddard,Lance K. Stewart, at our principal executive office, P.O.Post Office Box 188, Tontitown, Arkansas 72770. Copies of exhibits filed with that report or referenced in it will be furnished to stockholders of record upon request and payment of our expenses in furnishing such documents.
Stockholder Proposals
In order for a proposal by a stockholder to be presented at an annual meeting of our stockholders, the proposal must be included in the related proxy statement and proxy form. Any proposal to be presented at the 20102013 annual meeting of stockholders must be received at our principal executive office not later than December 21, 2009,20, 2012, directed to the attention of the Secretary, for consideration for inclusion in our proxy statement and form of proxy relating to that meeting. Any such proposals must comply in all respects with the rules and regulations of the SEC.
In connection with our annual meeting of stockholders to be held in 2010,2013, if we do not receive notice of a matter or proposal to be considered by March 6, 2010,8, 2013, then the persons appointed by our Board of Directors to act as the proxies for such annual meeting (named in the form of proxy) will be allowed to use their discretionary voting authority with respect to any such matter or proposal at the annual meeting, if such matter or proposal is properly raised at the annual meeting and put to a vote.
We do not know of any matters to be brought before the meeting other than those described in this proxy statement. If any other matter properly comes before the meeting, the persons designated as proxies will vote on each such matter in accordance with their best judgment.
By Order of the Board of Directors
Robert W. Weaver
Daniel H. Cushman
President and Chief Executive Officer
April 20, 2009
19, 2012
P.A.M. Transportation Services, Inc.[
| | Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on May 28, 2009.
Vote by Internet
• Log on to the Internet and go to
www.investorvote.com
• Follow the steps outlined on the secured website.
Vote by telephone
• Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There is NO CHARGE to you for the call.
• Follow the instructions provided by the recorded message.
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Using a black ink pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas. x
Annual Meeting Proxy Card |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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A Proposals — The Board of Directors recommends a vote FORall the nominees listed.
1. Election of Directors
| | | | | | | | | | | | | | | | |
| | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold |
01 — Fredrick P. Calderone | | o | | o | | 02 — Frank L. Conner | | o | | o | | 03 — W. Scott Davis | | o | | o |
| | | | | | | | | | | | | | | | |
| | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold |
04 — Christopher L. Ellis | | o | | o | | 05 — Manuel J. Moroun | | o | | o | | 06 — Matthew T. Moroun | | o | | o |
| | | | | | | | | | | | | | | | |
| | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold |
07 — Daniel C. Sullivan | | o | | o | | 08 — Robert W. Weaver | | o | | o | | 09 — Charles F. Wilkins | | o | | o |
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2. | | In their discretion, upon such other matters as may properly come before the meeting
or any adjournments or postponements of the meeting.
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B Non-Voting Items
Change of Address — Please print your new address below.
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
This Proxy should be marked, dated and signed by the stockholder(s) exactly as his or her name appears hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate. If shares are held by joint tenants or as community property, both should sign.
Date (mm/dd/yyyy) - Please print date below. | Signature 1 - Please keep signature within the box | Signature 2 - Please keep signature within the box |
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YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure your shares are represented at the meeting by promptly returning your proxy in the enclosed envelope.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
Proxy – P.A.M. Transportation Services, Inc. |
This Proxy is Solicited on behalf of the Board of Directors
The undersigned stockholder(s) of P.A.M. Transportation Services, Inc., a Delaware corporation, hereby appoints Robert W. Weaver and Larry J. Goddard, and each of them, proxies and attorneys-in-fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the 2009 Annual Meeting of Stockholders of P.A.M. Transportation Services, Inc. to be held on Thursday, May 28, 2009, and at any or all adjournments or postponements of the meeting, and to vote all shares of common stock that the undersigned would be entitled to vote if then and there personally present at the meeting.
This proxy, when properly executed, will be voted in accordance with the directions given by the undersigned stockholder(s). If no direction is made, it will be voted for the election of all nominees for director named on the reverse side, and as the proxies deem advisable on such other matters as may come before the meeting.
Please complete, date and sign on the reverse side, and return this proxy in the enclosed envelope.
