OTR EXPRESS, INC.
804 N. Meadowbrook Drive
Olathe, Kansas 66062
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on July 10, 1998
TO ALL STOCKHOLDERS:
You are cordially invited to attend the Special Meeting of
Stockholders of OTR Express, Inc. (the "Company") to be held on
Friday, July 10, 1998, at 10:00 a.m., Kansas City Time, at the
offices of Bryan Cave LLP, One Kansas City Place, 1200 Main St.,
35th Floor, Kansas City, Missouri, for the following purposes:
(1) To approve a proposed amendment of the Company's Articles
of Incorporation to increase the number of authorized shares of
Common Stock of the Company from 5,000,000 to 20,000,000 shares;
and
(2) To transact such other business as may properly come
before the meeting or any adjournment or postponement thereof.
Holders of record of the Company's Common Stock, $.01 par value, as of
the close of business on May 18, 1998 will be entitled to notice of and
to vote at the Special Meeting and any adjournment or postponement thereof.
A list of stockholders entitled to vote at the Special Meeting will be kept
at the Company's offices at 804 N. Meadowbrook Drive, Olathe, Kansas 66062 for
a period of ten days prior to the Special Meeting and will be available at the
Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
William P. Ward, Chairman of the Board
Dated: May 26 27 , 1998
IMPORTANT --- YOUR PROXY AND A RETURN ENVELOPE ARE ENCLOSED
You are urged to sign, date and mail your proxy even though
you may plan to attend the Special Meeting. No postage is required if your
proxy is mailed in the United States in the enclosed return envelope. If
you attend the Special Meeting, you may vote by proxy or you may withdraw
your proxy and vote in person. By returning your proxy promptly, a quorum
will be assured at the Special Meeting, which will prevent costly follow-up
and delays.
OTR EXPRESS, INC.
804 N. Meadowbrook Drive
Olathe, Kansas 66062
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 10, 1998
PROXY STATEMENT
The proposals in the accompanying form of proxy (the "Proxy") are
solicited by the Board of Directors of OTR Express, Inc. (the "Company") for
use at its Special Meeting of Stockholders (the "Special Meeting") to be held
on Friday, July 10, 1998, at 10:00 a.m., Kansas City Time, at the offices of
Bryan Cave LLP, One Kansas City Place, 1200 Main St., 35th Floor, Kansas City,
Missouri, and any adjournment or postponement thereof. This Proxy Statement
is being mailed or given to stockholders on or about May 26 27 , 1998.
Proxies. Shares represented by a duly executed Proxy received prior
to the Special Meeting will be voted at the Special Meeting. If a stockholder
specifies a choice on the Proxy with respect to any matter to be acted upon,
the shares will be voted in accordance with the choices specified in the Proxy
with respect to the proposals described in this Proxy Statement. If no choice
is specified, the shares represented by the Proxy will be voted in favor of
the proposals set forth in this Proxy Statement. None of the proposals are
related to or conditioned on the approval of any other proposal. Any person
giving a Proxy has the power to revoke it at any time before it is exercised
by giving written notice to the Secretary of the Company at any time prior to
the voting of the shares represented by the Proxy.
Other Matters. Management of the Company does not intend to present
any matter to the Special Meeting except as indicated herein, and presently
knows of no other matter to be presented at the Special Meeting. Should any
other matters properly come before the Special Meeting, the persons named in
the accompanying form of Proxy will vote the Proxy in accordance with their
judgment of the best interests of the Company on such matters.
Solicitation and Expense. The Company will bear all the costs of
solicitation of Proxies and preparing, assembling, printing and mailing the
Proxy Statement, the Proxy and additional materials which may be furnished to
stockholders. In addition to the use of the mails, Proxies may be solicited
by personal contact, telephone or telegraph by regular employees of the
Company, and the Company will reimburse brokers, custodians, fiduciaries or
other persons for their reasonable expenses in sending proxy solicitation
material to beneficial owners of shares. Also, Morrow & Co., Inc.
("Morrow"), a professional soliciting organization, will assist in the
solicitation of proxies by the Company. Morrow's Fee and solicitation of
the proxies is estimated to be approximately $4,500 plus reimbursement for
out-of-pocket costs and expenses.
Voting. Only stockholders of record of the Company's common stock,
$.01 par value (the "Common Stock") at the close of business on May 18, 1998
(the "Record Date") will be entitled to notice of, and to vote at, the Special
Meeting. On the Record Date, the Company had
1,835,955 shares of Common Stock outstanding and entitled to vote at the
Special Meeting. Each holder of Common Stock is entitled to one vote per
share on each matter to properly come before the Special Meeting.
The Bylaws of the Company require that a majority of the votes of the
shares of Common Stock issued, outstanding and entitled to vote at the Special
Meeting be present in person or represented by Proxy at the Special Meeting in
order to constitute a quorum for the transaction of business. Provided a
quorum is present, the affirmative vote of a majority of the shares of Common
Stock entitled to vote on the subject matter is required for the approval of
the amendment to the Company's Articles of Incorporation. Stockholders do not
have any dissenters' rights of appraisal in connection with the matters to be
voted upon. Votes that are cast against the proposal and abstentions are
counted for purposes of determining the presence or absence of a quorum for
the transaction of business at the Special Meeting. Broker non-votes (i.e., a
proxy card returned by a holder on behalf of its beneficial owner that is not
voted on a particular matter because voting instructions have not been
received and the broker has no discretionary authority to vote) are not
counted for purposes of determining the presence or absence of a quorum.
Because approval of the proposed amendment to the Articles of Incorporation
requires the affirmative vote of a majority of the outstanding shares entitled
to vote, abstentions and broker non-votes are the equivalent of votes against
the proposal.
The Company. The Company's principal executive office is located at
804 N. Meadowbrook Drive, Olathe, Kansas 66062.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
voting securities (the "Common Stock") as of May 18, 1998 by each person and
group known to the Company to be the beneficial owner of more than 5% of its
Common Stock.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership(FN1) Percent of Class(FN1)
William P. Ward
804 N. Meadowbrook Dr.
Olathe, KS 66062 264,534(FN2) 14.27%
Janice K. Ward
804 N. Meadowbrook Dr.
Olathe, KS 66062 264,534(FN2) 14.27%
Robert B. Westphal
109 N. 6th Street
Fort Smith, AR 72901 162,500(FN3) 8.85%
Robert Fleming, Inc.
320 Park Avenue
New York, NY 10022 152,620(FN4) 8.31%
Dr. Ralph E. MacNaughton
#17 Wycklow
Overland Park, KS 66207 129,237(FN5) 7.03%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue
Santa Monica, CA 90401 93,900(FN6) 5.11%
<FN>
(FN1) Calculated in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended. Nature of beneficial ownership of shares of
Common Stock is direct unless indicated otherwise by footnote. Beneficial
ownership as shown in the table arises from sole voting power and sole
investment power unless otherwise indicated by footnote.
(FN2) Includes 64,768 shares owned of record by Associated Commercial
Analysts Corporation ("ACA"), which is 100% owned by Mr. and Mrs. Ward. Also
includes 109,352 shares held jointly by Mr. and Mrs. Ward; 4,700 shares held
directly by each of Mr. Ward and Mrs. Ward; 6,320 shares held by a family
trust for which Mr. Ward is sole trustee with voting and dispositive power;
and 11,131 and 6,676 shares purchasable pursuant to options which are
currently exercisable by Mr. Ward and Mrs. Ward, respectively. In addition,
includes 56,887 shares owned by the ESOP of which Mr. Ward is the sole
trustee, with sole voting and dispositive power. Of the shares owned by the
ESOP, 5,251 and 1,960 shares have been allocated to the ESOP accounts of Mr.
Ward and Mrs. Ward, respectively.
(FN3) As reflected on Mr. Westphal's Schedule 13D dated February 26,
1998.
(FN4) The Robert Fleming, Inc. Schedule 13G dated February 23, 1998
reflects 179,000 shares. On March 5, 1998, Robert Fleming, Inc. sold a total
of 26,380 shares to two executive officers of the Company.
(FN5) Includes 62,602 shares held in family trusts of which Dr.
MacNaughton is trustee and 53,635 shares held in family trusts of which his
spouse is trustee. Also includes 10,000 shares held in Dr. MacNaughton's
individual retirement account. In addition, includes 3,000 shares purchasable
pursuant to options that are currently exercisable by Dr. MacNaughton.
(FN6) As reflected on Dimensional Fund Advisors Inc. ("Dimensional")
Schedule 13G dated February 7, 1996 and orally confirmed in March 1998 by a
representative of Dimensional to a Company executive officer. Dimensional, a
registered investment advisor, is deemed to have beneficial ownership of
93,900 shares of the Company's Common Stock as of December 31, 1997, all of
which shares are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the DFA Investment
Trust Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee benefit
plans, all of which Dimensional serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
</FN>
The following table sets forth, with respect to the Company's voting
securities (Common Stock) as of May 18, 1998, (i) shares beneficially owned by
all directors (current and nominee) and named executive officers of the
Company, and (ii) total shares beneficially owned by all executive officers
and directors as a group.
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership(FN1) Percent of Class
William P. Ward 264,534(FN2) 14.27%
Janice K. Ward 264,534(FN2) 14.27%
Dr. Ralph E. MacNaughton 129,237(FN3) 7.03%
Gary J. Klusman 78,066(FN4) 4.15%
Dr. James P. Anthony 72,615(FN5) 3.95%
Dean W. Graves 53,413(FN6) 2.90%
Frank J. Becker 32,000(FN7) 1.74%
Terry G. Christenberry 10,000(FN8) .54%
Charles M. Foudree 5,000(FN9) .27%
All executive officers and
directors as a group (11
persons) 693,405(FN10) 35.65%
<FN>
(FN1) See footnote (1) to the table on the preceding page.
(FN2) See footnote (2) to the table on the preceding page.
(FN3) See footnote (5) to the table on the preceding page.
(FN4) Includes 1,400 shares held in Mr. Klusman's individual
retirement account. Also includes 43,676 shares purchasable pursuant to
options which are currently exercisable by Mr. Klusman.
(FN5) Includes 2,700 and 24,400 shares held by Dr. Anthony's pension
trust and profit sharing trust, respectively, 26,220 shares owned by his
spouse and 5,580 shares held for the benefit of his minor children. Also
includes 3,000 shares purchasable pursuant to options which are currently
exercisable by Dr. Anthony.
(FN6) Includes 13,100 shares owned by Mr. Graves' spouse for which
Mr. Graves disclaims beneficial ownership, 500 shares owned jointly with
his spouse, and 19,650, 13,383 and 1,000 shares held by his HR-10
retirement plan, profit sharing trust and individual retirement account,
respectively. Also includes 3,000 shares purchasable pursuant to options
which are currently exercisable by Mr. Graves.
(FN7) Includes 15,000 shares held by Mr. Becker's HR-10 retirement
plan. Also includes 2,000 shares which are purchasable pursuant to options
which are currently exercisable by Mr. Becker.
(FN8) Includes 2,000 shares held in Mr. Christenberry's individual
retirement account and 2,000 shares held by Mr. Christenberry's spouse in
her individual retirement account, for which Mr. Christenberry disclaims
beneficial ownership. Also includes 3,000 shares purchasable pursuant to
options which are currently exercisable by Mr. Christenberry.
(FN9) Includes 1,000 shares held by Mr. Foudree's trust and 1,000
shares held in the individual retirement account of his spouse. Also
includes 3,000 shares purchasable pursuant to options which are currently
exercisable by Mr. Foudree.
(FN10) Includes 102,301 shares purchasable pursuant to options which
are currently exercisable and 56,887 shares owned by the ESOP of which Mr.
Ward is the sole trustee, with sole voting and dispositive power. Of the
shares owned by the ESOP, a total of 9,531 have been allocated to the
accounts of the Company's executive officers.
</FN>
PROPOSAL TO AMEND THE COMPANY'S ARTICLE OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has determined that it is advisable to amend the
Company's Articles of Incorporation and has recommended that the stockholders
approve an amendment (the "Amendment") to ARTICLE FOURTH of the Company's
Articles of Incorporation to increase the number of authorized shares of
Common Stock from 5,000,000 shares to 20,000,000 shares, in order to provide
the Company flexibility to meet current and future capital needs,
including the Company's proposed public offering of Common Stock described
below. The full text of the Amendment is attached to this Proxy Statement
as Exhibit A. The Board of Directors has directed that the Amendment be
submitted to the stockholders for their consideration. Approval of the
Amendment requires the affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock.
In the event the Amendment is approved by the requisite vote of
stockholders, no additional action or authorization by the stockholders would
be necessary prior to the issuance of such additional 15,000,000 shares unless
required by applicable law or regulation. The additional Common Stock to be
authorized by adoption of the Amendment would have rights identical to the
currently outstanding Common Stock of the Company.
Reasons for the Proposed Amendment
At the present time, management of the Company has no definitive plans
to issue the additional authorized shares of Common Stock for which approval
is sought hereby. If the Amendment is approved by stockholders, the Company's
Board of Directors may, from time to time, reserve or issue some or all of the
additional authorized The Company intends to file in the next several weeks a
registration statement with the Securities and Exchange Commission providing
for a public offering (the "Offering"), subject to requisite stockholder
approval of the Amendment, of approximately 4,660,000 shares of its Common
Stock (including the underwriters' over-allotment option) of which
approximately 60,000 shares will consist of Common Stock being sold by current
stockholders. The exact number of shares of Common Stock for such
purposes to be issued will be subsequently determined based upon the
trading price of the Common Stock and market conditions at the time of the
Offering and such other factors as the Board of Directors deems relevant.
THESE PROXY MATERIALS ARE NEITHER AN OFFER TO SELL NOR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES IN THE
OFFERING DESCRIBED ABOVE.
THE OFFERING WILL BE MADE ONLY BY MEANS OF A PROSPECTUS.
The Company intends to use the additional shares of Common Stock for
which authorization is sought herein in connection with the Offering, if
consummated, and may use the additional authorized shares of Common Stock in
connection with opportunities which involve the issuance of additional shares
of Common Stock for such purposes as the Board of Directors deems to be
appropriate and in the best interests of the Company and its stockholders.
Such
purposes opportunities may include, but are not limited to,
public or private equity offerings, business acquisitions, corporate mergers,
funding employee benefit or stock plans, stock splits or stock dividends, and
other general corporate purposes. Having Currently, except as set
forth herein, there are no definitive plans, agreements or arrangements in
place requiring the utilization of these additional shares for any such
purposes. However, having such additional authorized Common Stock available
for issuance would allow the Board of Directors to issue shares of Common
Stock in the future without the delay and expense associated with seeking
stockholder approval at such time. Elimination of the delays and expense
occasioned by the necessity of obtaining stockholder approval will better
enable the Company, among other things, to engage in financing transactions
and take advantage of changing market and financial conditions on a more
competitive basis, as determined by the Board of Directors.
Possible Effects of the Proposed Amendment
Under the Company's Articles of Incorporation, the Company's
stockholders do not have preemptive rights with respect to the Common Stock.
Thus, should the Board elect to issue additional shares of Common Stock
(subject to stockholders approving the Amendment hereby), existing
stockholders would not have any preferential rights to purchase such shares of
Common Stock, and any such issuance could, therefore, have a dilutive effect
on the equity and voting power of current stockholders.
In addition, the Board of Directors could use authorized but unissued
shares to create impediments to a takeover or a transfer of control of the
Company. Accordingly, the increase in the number of authorized shares of
Common Stock may deter a future takeover attempt which holders of Common Stock
may deem to be in their best interest or in which holders of Common Stock may
be offered a premium for their shares over the market price.
Although an increase in the authorized shares of Common Stock could,
under certain circumstances, have an anti-takeover effect (for example, by
diluting the stock ownership of a person seeking to effect a change in the
composition of the Board of Directors or contemplating a tender offer or other
transaction for the combination of the Company with another company), the
proposed Amendment is not prompted by any specific effort or takeover threat
currently perceived by management, nor is it part of a plan by management to
recommend a series of similar amendments to the Board of Directors and
stockholders. The Board of Directors is not currently aware of any attempt to
takeover or acquire the Company and it does not presently contemplate
recommending the adoption of any other amendments to the Articles of
Incorporation which could be construed to affect the ability of third parties
to take over or change control of the Company.
As previously stated, however, the only intended purpose of the proposed
Amendment is to increase the number of authorized shares of Common Stock to
provide the Company with flexibility to meet current and future capital needs,
including the Company's proposed public offering of Common Stock described
above.
Effective Date
If approved by the stockholders, the proposed Amendment will become
effective upon the filing of a Certificate of Amendment of Articles of
Incorporation with the Secretary of State of Kansas, which will occur as soon
as reasonably practicable following such approval.
Recommendation of the Board of Directors
The Board of Directors believes that the proposed Amendment, if adopted,
will provide the Company with a proper capitalization and a sufficient number
of authorized shares of Common Stock to provide the Company with flexibility
to meet current and future capital needs (including the Company's proposed
public offering of Common Stock described above) deemed by the Board of
Directors to be in the best interests of the Company and its stockholders.
The Board of Directors recommends that the stockholders vote
"FOR" the following resolution which will be presented at the Special Meeting.
"RESOLVED, that ARTICLE FOURTH of the Company's Articles of
Incorporation be amended to increase the number of authorized
shares of Common Stock from 5,000,000 shares to 20,000,000 shares.
RESOLVED FURTHER, that appropriate officers of the Company be, and
the same are, hereby authorized, empowered and directed in the
name on behalf of the Company to take such action and execute such
documents as may be deemed necessary or desirable to carry out the
intent and purpose of the foregoing resolution."
STOCKHOLDER PROPOSALS
In the event any stockholder intends to present a proposal at the next
Annual Meeting of Stockholders to be held in 1999, such proposal must be
received by the Secretary of the Company, in writing on or before December 4,
1998, to be considered for inclusion in the Company's Proxy Statement relating
to the next Annual Meeting of Stockholders.
OTHER BUSINESS
The Company knows of no business that will be presented for
consideration at the Special Meeting other than that described in this Proxy
Statement. As to other business, if any, that may properly come before the
Special Meeting, it is intended that proxies solicited by the Board will be
voted in accordance with the judgment of the person or persons voting the
proxies.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING PROXY. IF YOU ARE
PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
BY THE BOARD OF DIRECTORS
/s/ William P. Ward
William P. Ward
May 26 27 , 1998 Chairman of the Board
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
OTR EXPRESS, INC.
The undersigned, OTR Express, Inc., a Kansas corporation (the
"Corporation"), for the purpose of amending the Articles of Incorporation of
the Corporation, in accordance with the General Corporation Code of Kansas,
does hereby make and execute this Certificate of Amendment of Articles of
Incorporation and does hereby certify that:
(1) The amendments to the Articles of Incorporation proposed by the
directors and adopted by the stockholders of the Corporation are as follows:
RESOLVED, that the first paragraph of ARTICLE FOURTH of the
Corporation's Articles of Incorporation be deleted in its entirety and
replaced with the following:
The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 20,200,000 shares of
stock, of which 200,000 shall be a series of preferred stock, with
a par value of one cent ($.01) per share, and 20,000,000 shall be
Common Stock, with a par value of one cent ($.01) per share.
(2) The said amendments have been duly adopted in accordance with
the provisions of Section 17-6602 of the Kansas Statutes Annotated.