SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and Exchange Act
of
1934
Filed by Registrant
Filed by a Party other than the Registrant
Check the Appropriate Box:
Preliminary Proxy Statement
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Materials Pursuant to 240.14a-11(c) or 240.14a-12
HEARTLAND EXPRESS, INC.
(Name of Registrant as Specified in its Charter)
The Heartland Express, Inc. Board of Directors
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the Appropriate Box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Filed of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Price per unit or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
$ N/A = Amount on which filing fee is calculated.
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
HEARTLAND EXPRESS, INC.
2777 Heartland Drive
Coralville, Iowa 52241
NOTICE AND PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 1996
Dear Fellow Stockholders:
The 1996 Annual Meeting of Stockholders (the "Annual Meeting") of
Heartland Express, Inc., a Nevada Corporation (the "Company"), will be held
at the Hampton Inn, 1210 First Avenue, Coralville, Iowa 52241, at 8:00 a.m.
local time, on Thursday, May 2, 1996 for the following purposes:
1. To consider and act upon a proposal to elect five (5) directors
of the Company;
2. To consider and act upon a proposal to ratify the selection of
Arthur Andersen LLP as independent public accountants for the
Company for 1996; and
3. To consider and act upon such other matters as may properly come
before the meeting and any adjournment thereof.
The foregoing matters are more fully described in the accompanying Proxy
Statement.
The Board of Directors has fixed the close of business on March 15,
1996, as the record date for the determination of Stockholders entitled to
receive notice of and to vote at the Annual Meeting or any adjournment
thereof. Shares of Common Stock may be voted at the Annual Meeting only if
the holder is present at the Annual Meeting in person or by valid proxy.
YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING,
YOU ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED ENVELOPE. Returning your proxy now will not interfere with your
right to attend the Annual Meeting or to vote your shares personally at the
Annual Meeting, if you wish to do so. The prompt return of your proxy may
save the Company additional expenses of solicitation.
All Stockholders are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
Russell A. Gerdin
Chairman of the Board,
President and Secretary
Coralville, Iowa 52241
April 5, 1996
HEARTLAND EXPRESS, INC.
2777 Heartland Drive
Coralville, Iowa 52241
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Heartland Express, Inc., a Nevada
corporation (the "Company"), to be used at the 1996 Annual Meeting of
Stockholders of the Company (the "Annual Meeting"), which will be held at the
Hampton Inn, 1210 First Avenue, Coralville, Iowa 52241, on Thursday,
May 2, 1996, at 8:00 a.m. local time, and any adjournment thereof. All costs
of the solicitation will be borne by the Company. The Company does not
intend
to solicit proxies other than by this mailing; provided, that directors,
officers, and employees may solicit proxies by use of the mails or telephone
without compensation other than their regular compensation. The approximate
date of mailing this proxy statement and the enclosed form of proxy is
April 5, 1996.
The enclosed copy of the Company's annual report for the fiscal year
ended December 31, 1995, is not incorporated into this Proxy Statement and is
not to be deemed a part of the proxy solicitation material.
PROXIES AND VOTING
Only stockholders of record at the close of business on March 15, 1996
("Stockholders") are entitled to vote, either in person or by valid proxy, at
the Annual Meeting. On the record date of March 15, 1996, the Company had
20,000,000 shares of $0.10 par value Common Stock issued and outstanding.
Each share is entitled to one vote. The Company has no other class of stock
outstanding. Stockholders are not entitled to cumulative voting in the
election of directors.
All proxies that are properly executed and received by the Company prior
to the Annual Meeting will be voted in accordance with the choices indicated.
Any Stockholder may be represented and may vote at the Annual Meeting by a
proxy or proxies appointed by an instrument in writing. In the event that
any such instrument in writing shall designate two (2) or more persons to act
as proxies, a majority of such persons present at the meeting shall have and
may exercise, or, if only one shall be present, then that one shall have and
may exercise, all of the powers conferred by such written instrument upon all
of the persons so designated unless the instrument shall otherwise provide.
No such proxy shall be valid after the expiration of six (6) months from the
date of its execution, unless coupled with an interest or unless the person
executing it specifies therein the length of time for which it is to continue
in force, which in no case shall exceed seven (7) years from the date of its
execution. Any Stockholder giving a proxy may revoke it at any time prior to
its use at the Annual Meeting by filing with the Secretary of the Company a
revocation of the proxy, by delivering to the Company a duly executed proxy
bearing a later date, or by attending the meeting and voting in person.
Other than the election of directors, which requires a plurality of the
votes cast, each matter to be submitted to the Stockholders requires the
affirmative vote of a majority of the votes cast at the meeting. For
purposes of determining the number of votes cast with respect to a particular
matter, only those cast "For" or "Against" are included. Abstentions and
broker non-votes are counted only for purposes of determining whether a
quorum is present at the meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, the Stockholders will elect five (5) directors to
serve as the Board of Directors until the 1997 Annual Meeting of Stockholders
or until their successors are duly elected and qualified. The Board
presently has five members. Courtney J. Munson served as a director during
1995 but resigned in February 1996 to pursue other business interests. In
accordance with the Company's bylaws, the remaining four directors appointed
Michael J. Gerdin to fill the vacancy created by Mr. Munson's resignation.
Absent contrary instructions, each proxy will be voted for the election of
the individuals designated as directors below. In the event one or more of
the individuals listed below shall unexpectedly become unavailable to serve,
which the Board of Directors has no reason to expect, the proxies that would
have otherwise been voted for such individuals will be voted for a substitute
nominee selected by the Board.
Information Concerning Executive Officers and Directors
Information concerning the names, ages, positions with the Company,
tenure as a director, and business experience of the Company's current
directors and executive officers is set forth below. All references to
experience with the Company include positions with the Company's operating
subsidiary, Heartland Express, Inc. of Iowa.
NAME AGE POSITION DIRECTOR SINCE
Russell A. Gerdin 54 Chairman of the Board, President, 1978
Secretary
John P. Cosaert 48 Vice President of Finance, Treasurer N/A
Richard L. Meehan. 50 Vice President of Marketing N/A
Dennis D. Thompson 48 Vice President of Safety N/A
Earl H. Scudder, Jr.1 53 Director 1986
Richard O. Jacobson1 59 Director 1994
Dr. Benjamin J. Allen 49 Director 1995
Michael J. Gerdin 26 Director 1996
1 Member of the Audit Committee.
Russell A. Gerdin has served as the Company's President since 1978 and
as Chairman of the Board since 1986.
John P. Cosaert has served as the Company's Vice President of Finance
and Treasurer since 1986.
Richard L. Meehan has served as the Company's Vice President of
Marketing since 1986.
Dennis D. Thompson has served as the Company's Vice President of Safety
since 1986.
Earl H. Scudder, Jr. has served as a director since the Company's 1986
initial public offering. Mr. Scudder has engaged in the private practice of
law since 1966. He is a principal of Scudder Law Firm, P.C., Lincoln,
Nebraska, the Company's outside counsel. Mr. Scudder also serves as a
director of Swift Transportation Co., Inc., and another principal of Scudder
Law Firm, P.C. serves as a director of Covenant Transport, Inc., both
nationwide truckload carriers with common stock traded on the Nasdaq National
Market.
Richard O. Jacobson has served as a director since 1994. Mr. Jacobson
has been President and Chief Executive Officer of Jacobson Warehouse Company,
Inc. and Jacobson Transportation Company, Inc., Des Moines, Iowa since 1968.
Mr. Jacobson also serves as a director for AllaTenn Resources, Inc.,
Allied Group, Inc., Firstar Bank of Des Moines, Firstar Banks of Iowa, and
Felcor Suite Hotels, Inc.
Dr. Benjamin J. Allen is the Dean and Distinguished Professor of
Business at Iowa State University in Ames, Iowa, where he joined the faculty
in 1979. Dr. Allen previously served as Chairman of the Department of
Transportation and Logistics at Iowa State University. Dr. Allen also served
in the Office of Transportation Regulatory Policy of the U.S. Department of
Transportation as a Brookings Institute Economics Policy Fellow.
Michael J. Gerdin has served as a director since March 1, 1996. He has
worked full-time at the Company since May 1992, when he graduated from Luther
College. Mr. Gerdin has served in a variety of positions, including
dispatch, safety, sales, and driver recruiting. Mr. Gerdin was also
responsible for relocation of the former Munson Transportation administrative
functions to Heartland's headquarters.
Board of Directors and Committee Meetings
The Board of Directors met once during the last fiscal year, and all
directors were present at the meeting.
The 1995 Audit Committee consisted of Earl H. Scudder, Jr. (Chairman),
and Richard O. Jacobson. The Audit Committee met once during 1995, and both
members were in attendance. The Audit Committee makes recommendations to the
Board concerning the selection of outside auditors, reviews the Company's
financial statements, reviews and discusses audit plans, audit work, internal
controls, and the report and recommendations of the Company's independent
auditors, and considers such other matters in relation to the external audit
of the financial affairs of the Company as may be necessary or appropriate in
order to facilitate accurate and timely financial reporting. At least a
majority of the Audit Committee members will not be employees of the Company.
The Board does not have a compensation or nominating committee or any
committee performing similar functions.
Directors' Fees
Directors who are not employees of the Company are paid $1,000 for
attendance at each Board of Directors or committee meeting attended (if the
committee meeting is held on a day other than the day of a Board meeting),
and are reimbursed for expenses incurred in attending such meetings.
Board of Directors Interlocks and Insider Participation
The 1995 Board of Directors consisted of Russell A. Gerdin,
Earl H. Scudder, Jr., Richard O. Jacobson, Courtney J. Munson, and
Dr. Benjamin J. Allen, all of whom participated in deliberations concerning
executive officer compensation. No other individuals participated in such
deliberations. During 1995, Mr. Gerdin served as the President and Secretary
of the Company, and Mr. Scudder served as Assistant Secretary of the Company.
The Board of Directors establishes the compensation of Mr. Gerdin and reviews
compensation set by Mr. Gerdin for other executive officers. Mr. Scudder
receives no compensation for serving as Assistant Secretary.
In 1995, the Company leased two office buildings, totalling
approximately 25,000 square feet, a storage building of approximately 3,500
square feet, and five acres of land from Mr. Gerdin for $239,500 plus taxes,
utilities, insurance and maintenance. The lease expires on May 31, 2000, but
is renewable for an additional five year term with a cost of living
adjustment.
Mr. Scudder, President of Scudder Law Firm, P.C., served as counsel to
the Company during 1995, and is currently serving in that position.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE NOMINEES FOR DIRECTOR PRESENTED IN PROPOSAL 1.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation paid by the Company to its chief executive officer who
was the only executive officer who was paid more than $100,000 in salary and
bonus during the most recent fiscal year (the "Named Officer") for services
in all capacities for the fiscal years ended December 31, 1995, 1994, and
1993.
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
Name and Principle Restricted
Position Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award(s) SARs Payouts Compensation
Year ($) ($) ($) ($) (#) ($) ($)
Russell A. Gerdin, 1995 300,000 - - - - - -
Chairman and President 1994 300,000 - - - - - -
(Chief Executive Officer) 1993 300,000 - - - - - -
Other annual compensation did not exceed 10% of Mr. Gerdin's total salary for any reported year.
Board of Directors Report on Executive Compensation
The members of the Board of Directors prepared the following report on
executive compensation:
The Board of Directors reviews the compensation of the Company's
executive officers annually. The compensation of Mr. Gerdin, the Company's
chief executive officer, is evaluated differently than that of the other
executive officers. A summary of the considerations for each is set forth
below.
Chief Executive Officer. Mr. Gerdin receives a base salary only, with
no bonus or short or long-term incentives. The Board of Directors recognizes
Mr. Gerdin's substantial responsibility and contribution to the Company's
operating performance, operating margin, revenue and net income growth rates,
and attainment of Company goals, as well as his large stockholdings. At
Mr. Gerdin's request, his salary has remained the same since 1986, and he has
never been paid a bonus. The Board believes that Mr. Gerdin's salary is
reasonable compared to similarly situated executives, and that as a holder of
almost 50% of the Company's outstanding stock, Mr. Gerdin receives an
incentive through appreciation in the value of the Company's stock. Because
of Mr. Gerdin's request, the Board of Directors has not considered or
approved an increase in annual compensation or any incentive compensation for
Mr. Gerdin. Thus, corporate performance directly affects Mr. Gerdin, but not
through his compensation by the Company.
Other Executive Officers. The Company's other executive officers are
compensated through a mix of salary and incentive compensation. In
establishing compensation, the Board of Directors annually considers (i) the
Company's operating performance, stock performance, operating margin, and
revenue and net income growth rates, (ii) team-building skills, individual
performance, past performance and potential with the Company, (iii) local
compensation levels and cost of living, and (iv) compensation information
disclosed by similar publicly-held truckload motor carriers. In 1995, the
Board of Directors also considered the executive officers' contribution to
improving the operations of Munson Transportation, Inc., which merged with
the Company in March 1994. The Board of Directors believes that the former
Munson Transportation operations showed substantial improvement in a
difficult freight market. Salary and bonus levels are largely subjective,
with individual performance being the most important factor. Compensation
levels at other publicly-traded truckload motor carriers are used as a
general guide, and the Board believes that the compensation of its executive
officers as a group, historically and during the last fiscal year, has been
comparable to that of other carriers.
The Board believes that providing an incentive for its executive
officers to maximize profitability is important. In 1993, the Company's
subsidiary, Heartland Express, Inc. of Iowa, adopted a non-qualified deferred
compensation plan for key management employees designated by the board of
directors of the subsidiary for a given year. The total contingent benefit
available for all participants is a percentage of the Company's previous
year's net profits equal to one-fourth of one percent of such profits for
each percentage point (or a fraction thereof) by which the Company's
operating ratio was less than a specified target. The operating ratio
represents the percentage which operating expenses bear to operating
revenues. The benefits vest in increments up to age 65, payment is deferred
until cessation of employment, and all payments are subject to certain
vesting and forfeiture provisions. The chief executive officer does not
participate in the deferred compensation arrangement. The aggregate amount
contributed to the plan on behalf of five participants for 1995 was
$140,000. Under the deferred compensation plan, there is a direct
relationship between the Company's operating efficiency and the deferred
amount allocable to the executive officers. The Board of Directors
determines the portion of the annual total deferred compensation pool to
allocate to individual executive officers based upon a subjective evaluation
of the job performance of each individual executive officer.
Board of Directors
Russell A. Gerdin Benjamin J. Allen
Earl H. Scudder, Jr. Michael J. Gerdin
Richard O. Jacobson
Tuition Award Program
The Company maintains a tuition award program for the children of
certain employees, including executive officers. Contributions to the
program are based upon the Company's performance. During 1995, the Company
contributed $137,000 to the program, based upon 1994 performance. The
Company will contribute $191,000 in 1996 based upon 1995 performance. The
amount paid to children of the Company's executive officers was $20,497 in
1994 and $8,933 in 1995.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors, and greater than 10%
stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon a review of
the copies of such forms furnished to the Company, or written representations
that no Forms 5 were required, the Company believes that its officers,
directors and greater than 10% beneficial owners complied with all Section
16(a) filing requirements applicable to them during the Company's preceding
fiscal year, except that Benjamin J. Allen was late filing his Form 3 at a
time when he did not own any Common Stock.
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following table sets forth, as of March 15, 1996, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
person known by the Company to beneficially own more than 5% of such stock,
by each director and Named Officer of the Company, and by all directors and
executive officers of the Company as a group.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Amount & Nature of
Title of Class Name and Address of Beneficial Owner Beneficial Percent
Ownership of Class(1)
Common Stock Russell A. Gerdin, President, Secretary,
and Director, 2777 Heartland Drive,
Coralville, IA 52241 9,679,993 48.4%
Common Stock Earl H. Scudder, Jr., Director
411 S. 13th Street, Suite 200,
Lincoln, NE 68508 6,358(2) *
Common Stock Richard O. Jacobson, Director
P.O. Box 224, Des Moines, IA 50301 0 *
Common Stock Benjamin J. Allen, Director
1007 Brookridge, Ames, IA 50010 0 *
Common Stock Michael J. Gerdin, Director
2777 Heartland Drive, Coralville, IA 52241 0 *
Common Stock Nicholas Company, Inc. (Albert O. Nicholas)
700 N. Water Street, Milwaukee, WI 53202 1,517,522 7.59%
Common Stock Willaim Blair and Company, L.L.C.
222 West Adams St., Chicago, IL 60606 1,167,801 5.84%
Common Stock All directors and executive officers
as a group (8 individuals) 9,751,548 48.5%
* Less than one percent (1%).
1 Based upon 20,000,000 outstanding shares at March 15, 1996.
2 Includes 4,819 shares held in an individual retirement account owned by
Patricia H. Scudder, spouse of Mr. Scudder.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Prior to Courtney J. Munson's resignation as a director, Mr. Munson and
the Company engaged in the following transactions on January 15, 1996:
(1) Mr. Munson purchased all of the stock of Heartland Monmouth Warehouse
Corp. from the Company for $150,000 (the Company having acquired the stock of
such corporation from Mr. Munson and his brother in a March 17, 1994 merger
in exchange for 6,434 shares of Common Stock, valued at approximately
$223,600 at the merger date); (2) the Company paid Mr. Munson $242,308 in
connection with the settlement of all issues under his employment agreement;
(3) Mr. Munson repaid all sums due the Company (approximately $340,000 at
December 31, 1995, plus accrued interest); and (4) the registration rights
agreement with Mr. Munson and certain members of his family was terminated;
provided that the Munsons will retain "piggyback" registration rights in
certain circumstances through March 17, 1997.
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR HEARTLAND EXPRESS
The following graph compares the cumulative total stockholder return of
the Company's Common Stock with the cumulative total stockholder return of
the
Nasdaq Stock Market (U.S. Companies) and the Nasdaq Trucking & Transportation
Stocks commencing December 31, 1990, and ending December 29, 1995.
GRAPH WAS CENTERED HERE IN PRINTED FORM
Legend
Symbol Index Description 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/29/95
_____ Heartland Express 100.0 181.1 336.6 301.8 365.9 370.9
- - ---- CRSP index for Nasdaq Stock
Market (U.S. Companies) 100.0 160.5 186.9 214.5 209.7 296.5
..... CRSP Index for Nasdaq
Trucking & Transportation Stock 100.0 145.4 177.9 216.1 196.0 228.5
The stock performance graph assumes $100 was invested on January 1,
1991. There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the
graph above. The Company will not make or endorse any predictions as to
future stock performance. The CRSP Index for Nasdaq Trucking &
Transportation Stocks includes all publicly held truckload motor carriers
traded on the Nasdaq Stock Market, as well as all Nasdaq companies within the
Standard Industrial Code Classifications 3700-3799, 4200-4299, 4400-4599, and
4700-4799.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as independent
public accountants for the Company for the 1996 fiscal year. Arthur Andersen
LLP served as independent public accountants for the Company for the fiscal
year ended December 31, 1995. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting with an opportunity to make a
statement, if they desire to do so, and to respond to appropriate questions.
McGladrey & Pullen, LLP served as independent public accountants for the
Company for the fiscal year ended December 31, 1993. McGladrey & Pullen
declined to stand for re-election as the Company's independent public
accountants for the 1994 fiscal year by letter dated April 6, 1994. The
Company's financial statements for the past two fiscal years have not
contained an adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting
principles. The decision to change accountants was recommended and approved
by the audit committee. The Company did not have any disagreements with
McGladrey & Pullen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" PROPOSAL 2 TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1997 Annual
Meeting of the Stockholders of the Company must be received by the Corporate
Secretary of the Company at the Company's principal executive offices on or
before December 31, 1996, to be included in the Company's proxy material
related to that meeting.
OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting
any matters other than those described herein and does not presently know of
any matters that will be presented by other parties.
HEARTLAND EXPRESS, INC.
Russell A. Gerdin
Chairman of the Board,
President and Secretary
April 5, 1996