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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.1a-11(c) or Section 240.1a-12
- --------------------------------------------------------------------------------
DYNAMEX INC.
-----------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1. Title of each class of securities to which transaction
applies: Common Stock
2. Aggregate number of securities to which transaction applies:
7,411,623
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing is calculated and state how it was
determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount previously paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
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DYNAMEX INC.
1431 GREENWAY DRIVE
SUITE 345
IRVING, TEXAS 75038
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 3, 1997
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To the Stockholders of
DYNAMEX INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Dynamex Inc., a Delaware corporation, will be held at the Four Seasons Resort
and Club, Board Room, Lobby Level, 4150 N. MacArthur Boulevard, Irving, Texas
75038, on Wednesday, December 3, 1997, at 9 :00 A.M. Dallas time for the
following purposes:
1. To elect seven (7) directors of the Company.
2. To approve the Company's Amended and Restated 1996 Stock
Option Plan.
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments thereof.
Only stockholders of record at the close of business on October 28,
1997 are entitled to notice of, and to vote at, the meeting or any adjournment
thereof.
Whether or not you plan to attend the Annual Meeting and regardless of
the number of shares you own, you are requested to sign and return the enclosed
proxy card in the enclosed envelope (which requires no postage if mailed in the
United States).
By Order of the Board of Directors,
/s/ ROBERT P. CAPPS
Robert P. Capps
Vice President-Chief Financial Officer
and Assistant Secretary
Irving, Texas
November 3, 1997
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DYNAMEX INC.
1431 GREENWAY DRIVE
SUITE 345
IRVING, TEXAS 75038
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 3, 1997
This Proxy Statement is furnished to stockholders of Dynamex Inc., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders to be held on Wednesday, December 3, 1997, and at any
adjournments or postponements thereof. Proxies in the form enclosed will be
voted at the Annual Meeting if properly executed, returned to the Company prior
to the meeting and not revoked. The proxy may be revoked at any time before it
is voted by giving written notice of revocation or a duly executed proxy
bearing a later date to the Secretary of the Company, or by appearing at the
Annual Meeting and revoking his or her Proxy and voting in person.
This Proxy Statement with the accompanying Proxy are first being
mailed to stockholders on or about November 3, 1997. The Company's Annual
Report, covering the Company's 1997 fiscal year, is enclosed herewith but does
not form any part of the materials for solicitation of proxies.
ACTIONS TO BE TAKEN AT THE MEETING
At the Annual Meeting, holders of the Company's Common Stock (the
"Common Stock") will consider and vote (i) to elect as directors of the Company
of Messrs. Richard K. McClelland, James M. Hoak, Jr., Stephen P. Smiley, Wayne
Kern, Brian J. Hughes, Kenneth H. Bishop, and E.T. Whalen, (ii) to approve the
Company's Amended and Restated 1996 Stock Option Plan, and (iii) to transact
such other business as may properly come before the Annual Meeting.
Only stockholders of record at the close of business on October 28,
1997 (the "Record Date"), are entitled to notice of, and to vote at, the Annual
Meeting. As of the close of business on the Record Date, the Company had
issued and outstanding, and entitled to vote at the Annual Meeting, 7,411,623
shares of Common Stock. Holders of record of Common Stock are entitled to one
vote per share on the matters to be considered at the Annual Meeting.
The presence, either in person or by properly executed proxy, of the
holders of record of a majority of the voting power entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual Meeting. The
election as a director of each nominee set forth above requires the
affirmative vote of the holders of record of a plurality of the shares of
Common Stock present in person or by proxy and entitled to vote on the election
of directors at the meeting. The approval of the Company's Amended and
Restated 1996 Stock Option Plan requires the vote of a majority
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of the shares of Common Stock present in person or by proxy and entitled to
vote at the Annual Meeting.
Where stockholders have appropriately specified how their proxies are
to be voted, they will be voted accordingly. An automated system administered
by the Company's transfer agent tabulates the votes. Abstentions and broker
non-votes will be counted toward determining whether a quorum is present at the
Annual Meeting. Votes submitted as abstentions on matters to be voted on at
the Annual Meeting will be counted as votes against such matters. Broker
non-votes will not count for or against the matters to be voted on at the
Annual Meeting.
The accompanying proxy, unless the stockholder otherwise specifies in
the proxy, will be voted (i) for the election as director of the Company the
seven nominees listed above, (ii) for the approval of the Company's Amended and
Restated 1996 Stock Option Plan, and (iii) at the discretion of the proxy
holders on any other matter that may properly come before the meeting or any
adjournment thereof. Where stockholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If any other matter
or business is brought before the meeting, the proxy holders may vote the
proxies at their discretion. The directors do not know of any such other matter
or business. Should any director nominee become unable or unwilling to accept
nomination or election, the proxy holders may vote the proxies for the election
in his stead of any other person the Board of Directors may recommend. Each
nominee has expressed his intention to serve the entire term for which election
is sought.
DIRECTORS AND EXECUTIVE OFFICERS
A brief description of each executive officer and director of the
Company is provided below. All current directors of the Company are nominees
for director at the Annual Meeting. Directors hold office until the next
annual meeting of the stockholders or until their successors are elected and
qualified. All officers serve at the discretion of the Board of Directors.
DIRECTORS
Richard K. McClelland, 45, became the President, Chief Executive
Officer and a director of the Company in May 1995 upon the closing of the
Company's acquisition of Dynamex Express (the ground courier division of Air
Canada), where he also served as President since 1988. He was elected as
Chairman of the Board of the Company in February 1996. Prior to joining Dynamex
Express in 1986, Mr. McClelland held a number of advisory and management
positions with the Irving Group, Purolator Courier Ltd. and Sunbury Transport
Ltd., where he was engaged in the domestic and international same-day air,
overnight air, and trucking businesses.
James M. Hoak, Jr. 53, has served as a director of the Company since
February 1996. Mr. Hoak has served as Chairman and a principal of Hoak Capital
Corporation (a private equity investment firm) since September 1991. He has
also served as Chairman of HBW Holdings, Inc. (an investment bank) since July
1996. HBW Holdings, Inc. is the parent corporation of Hoak Breedlove Wesneski
& Co., one of the underwriters in the initial public offering of the Company's
Common Stock. Mr. Hoak served as Chairman of Heritage Media Corporation (a
broadcasting and
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marketing services firm) from its inception in August 1987 to its sale in
August 1997. From February 1991 to January 1995, he served as Chairman and
Chief Executive Officer of Crown Media, Inc. (a cable television company). From
1971 to 1987, he served as President and Chief Executive Officer of Heritage
Communications, Inc. (a diversified communications company), and as its
Chairman and Chief Executive Officer from August 1987 to December 1990. Mr.
Hoak is a director of MidAmerican Energy Company, PanAmSat Corporation, Pier 1
Imports, Inc. and Texas Industries, Inc. See "Certain Transactions."
Stephen P. Smiley, 48, has served as a director of the Company since
1993 and was a Vice President of the Company from December 1995 through
February 1996. Mr. Smiley was President of Hoak Capital Corporation from 1991
through February 1996. Mr. Smiley joined Hunt Financial Corporation (a private
investment company) as Executive Vice President in February 1996, and was
appointed President in January 1997. Mr. Smiley is also a director of Ergo
Science Corporation (a biopharmaceutical company). See "Certain Transactions."
Wayne Kern, 64, has served as a director of the Company since February
1996. Mr. Kern has served as Senior Vice President and Secretary of Heritage
Media Corporation since 1987 through August 1997. From 1991 to 1995, Mr. Kern
also served as Executive Vice President of Crown Media, Inc. From 1979 to
1991, Mr. Kern served as the Executive or Senior Vice President, General
Counsel and Secretary of Heritage Communications, Inc. See "Certain
Transactions"
Brian J. Hughes, 36, has served as a director of the Company since May
1995. Mr. Hughes has served as the Vice President -- Investments of both
Preferred Risk Life Insurance Company and Preferred Risk Mutual Insurance
Company since September 1992. From 1986 to 1992, Mr. Hughes served as Assistant
Vice President -- Investments at Boatmen's National Bank. See "Certain
Transactions."
Kenneth H. Bishop, 60, has served as a director of the Company since
August 1996. From 1974 to August 1996, Mr. Bishop was President and General
Manager of Zipper Transportation Services, Ltd. and a related company (together
"Zipper") which operated a same-day delivery business in Winnipeg, Manitoba.
Zipper was acquired by the Company in August 1996. See "Certain Transactions."
E. T. Whalen, 64, has served as a director of the Company since August
1996. Mr. Whalen is currently a consultant to Gateway Freight Services, an
entity providing freight forwarding services to major international airlines.
From 1965 until January 1996, Mr. Whalen was employed by Japan Airlines in
various management positions, including Staff Vice President-Cargo from October
1986.
EXECUTIVE OFFICERS
Robert P. Capps, 43, has served as Vice President, Treasurer and
Assistant Secretary of the Company since February 1996 and was elected Chief
Financial Officer in May 1997. Mr. Capps served in various financial management
capacities with Hadson Corporation (an energy company) from February 1986
through June 1995 and was Executive Vice President and Chief Financial Officer
from May 1991 through June 1995. In October 1992, Hadson Corporation filed for
protection
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under Chapter 11 of the Federal Bankruptcy Code. Hadson Corporation's plan of
reorganization was confirmed in November 1992. Mr. Capps is a certified public
accountant.
Martin A. Piccolo, 41, became the Controller of the Company in May
1995 upon the closing of the Company's acquisition of Dynamex Express, where he
also served in such capacity. He was elected as Secretary of the Company in
September 1995, served as its Treasurer from September 1995 through January
1996 and was elected as a Vice President of the Company in August 1996. Mr.
Piccolo joined Dynamex Express in January 1989 and has over 16 years experience
in the courier industry.
James R. Aitken, 37, was elected as the Vice President -- Eastern
Canada in September 1997. He joined the Company in May 1995 in conjunction
with the Company's acquisition of Dynamex Express, was appointed General
Manager-- Eastern Canada in February 1996 and served in such capacity until
September 1997. Prior to joining the Company, Mr. Aitken was the Director of
Sales and Marketing with Dynamex Express, where he had been employed since
1988. During his employment with Dynamex Express, Mr. Aitken worked in sales
and marketing, regional and branch management and client development. Mr.
Aitken has over 18 years of experience in the courier industry.
Ralph Embree, 47, was elected as the Vice President--Eastern U.S. in
September 1997. He joined the Company in December 1995 in conjunction with the
Company's acquisition of Mayne Nickless and was appointed as the General
Manager-- Eastern U.S. in February 1996. Prior to joining the Company, Mr.
Embree held a variety of operations, sales and management positions with Mayne
Nickless where he was employed for seven years. Mr. Embree has over 17 years of
experience in the courier industry.
James C. Isaacson, 62, was elected as the Vice President--Central U.S.
in September 1997. He joined the Company in May 1997 in conjunction with the
Company's acquisition of Road Runner Transportation, Inc. Prior to joining the
Company, Mr. Isaacson had been the principal stockholder and executive officer
of Road Runner since 1978. Mr. Isaacson has over 19 years of experience in
the courier industry. See "Certain Transactions."
Robert Dobrient, 36, was elected as the Vice President--Marketing and
Assistant Secretary in September 1997. He joined the Company as an operations
manager in January 1997 in conjunction with the Company's acquisition of Max
America Holdings, Inc., a logistics services business in Dallas, Texas. Prior
to joining the Company, Mr. Dobrient was a principal stockholder and executive
officer of Max America since 1985. Mr. Dobrient has over 12 years of
experience in the courier industry. See "Certain Transactions."
OPERATIONS AND COMPENSATION OF THE BOARD OF DIRECTORS
There were 4 meetings of the Board of Directors during fiscal year
1997. No director attended fewer than 75% of the meetings of the Board (and
any committees thereof) that he was required to attend.
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Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company will receive an annual fee of $6,000 as compensation for his or her
services as a member of the Board of Directors. Non-employee directors will
receive an additional fee of $500 for each meeting of the Board of Directors
attended in person by such director and $250 for each telephonic meeting in
which such director participates. Non-employee directors who serve on a
committee of the Board of Directors will receive $500 for each committee
meeting attended in person and $250 for each telephonic committee meeting in
which such director participates. All directors of the Company are reimbursed
for out-of-pocket expenses incurred in attending meetings of the Board of
Directors or committees thereof, and for other expenses incurred in their
capacities as directors of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established three committees: a
Compensation Committee, an Audit Committee and an Executive Committee. Each of
these committees has two or more members who serve at the discretion of the
Board of Directors.
The Compensation Committee is responsible for reviewing and making
recommendations to the Board of Directors with respect to compensation of
executive officers, other compensation matters and awards under the Company's
stock option plan. During fiscal year 1997, the Compensation Committee
consisted of three members, Messrs. Bishop, Hughes and Smiley (none of whom is
an officer or employee of the Company). Mr. Bishop became a member of the
Compensation Committee concurrently with his election to the Board of Directors
in August 1996. The Compensation Committee met two times during fiscal year
1997. See "Report of the Compensation Committee" included elsewhere in this
prospectus.
The Audit Committee is responsible for reviewing the Company's
financial statements, audit reports, internal financial controls and the
services performed by the Company's independent public accountants, and for
making recommendations with respect to those matters to the Board of Directors.
During fiscal year 1997, the Audit Committee consisted of two members, Messrs.
Bishop and Hughes. Mr. Bishop became a member of the Audit Committee
concurrently with his election to the Board of Directors in August 1996. The
Audit Committee met two times during fiscal year 1997.
The Executive Committee exercises all of the powers and authority of
the Board of Directors in the management of the business and affairs of the
Company, except as otherwise reserved in the Company Bylaws or designated by
resolution of the Board of Directors for action by the full board or another
committee thereof. The Executive Committee was designated in fiscal year 1997
and consists of three members, Messrs. McClelland, Hoak and Smiley. The
Executive Committee did not meet during fiscal year 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member
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of the Company's Board of Directors or Compensation Committee. See "Certain
Transactions" for certain fiscal 1997 transactions involving members of the
Compensation Committee.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the total annual
compensation paid or accrued by the Company to or for the account of the Chief
Executive Officer and the other executive officers of the Company whose total
salary and bonus for the fiscal year ended July 31, 1997 exceeded $100,000:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
ANNUAL ------
COMPENSATION
------------
SECURITIES
UNDERLYING
NAME AND FISCAL SALARY BONUS OPTIONS
PRINCIPAL POSITION YEAR ($) ($) (#)
------------------ ---- --- --- ---
Richard K. McClelland
President and Chief Executive Officer . . . . . . . . . 1997 200,000 120,000 99,000
1996 194,467 50,790 --
1995(1) 22,050 -- 103,000
Robert P. Capps
Vice President and Chief Financial Officer . . . . . . 1997(2) 141,950 54,250 46,000
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(1) Mr. McClelland was employed by the Company as of May 31, 1995, and,
consequently, his salary for fiscal year 1995 as set forth above represents
only two months of his annual salary. Had Mr. McClelland been employed for
the entire twelve months of fiscal year 1995, his salary for such year
would have been approximately $132,300.
(2) Mr. Capps was initially employed by the Company in January 1996 and did not
earn in excess of $100,000 in salary and bonus prior to fiscal year 1997.
EMPLOYMENT AND CONSULTING AGREEMENTS
The Company has entered into an employment agreement with Mr.
McClelland which provides for the payment of a base salary in the annual amount
of $200,000, participation in an executive bonus plan, an auto allowance of
Cdn $900 per month and participation in other employee benefit plans. The
agreement also provides that upon Mr. McClelland's exercise of certain stock
options to purchase 48,000 shares of Common Stock, the Company shall pay Mr.
McClelland a bonus equal to the exercise price multiplied by the number of
shares to be purchased by virtue of such exercise. Unless terminated earlier,
the employment agreement shall continue until May 31, 2000, upon which date
such agreement will be automatically extended for successive one-year renewal
terms unless notice is given upon the terms provided in such agreement.
Additionally, upon a sale or transfer of substantially all of the assets of the
Company or certain other events that constitute a change of control of the
Company, including the acquisition by a stockholder, other than certain named
stockholders, of securities representing 15% of the votes that may be cast for
director
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elections, the Company shall continue to pay Mr. McClelland the compensation
set forth in such agreement for the greater of two years from the date of such
change of control or the remainder of the agreement term. During the term of
the employment agreement and pursuant to such agreement, Mr. McClelland shall
be a member of the Board of Directors of the Company.
1996 STOCK OPTION PLAN
See "Approval of Amended and Restated 1996 Stock Option Plan"
contained elsewhere in this proxy statement for a description of the material
terms of the Company's Amended and Restated 1996 Stock Option Plan (the "Option
Plan"). The following table sets forth information regarding the grant of stock
options under the Option Plan during fiscal 1997 to the executive officers
named in the Summary Compensation Table:
OPTION GRANTS IN FISCAL YEAR 1997
Potential Realizable
Value at Assumed
Individual Annual Rates of Stock
---------- Price Appreciation for
Grants Option Term(1)
------ ----------------------
Percent of
Total
Options/SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5%($) 10%($)
----------------------- ---------- -------------- --------- --------------- --------- ----------
Richard K. McClelland 99,000 40.1% 8.00 8/16/06 498,000 1,262,000
Robert P. Capps 46,000 18.6% 8.00 8/16/06 231,000 586,000
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(1) The 5% and 10% assumed annual rates of appreciation are mandated by
the rules of the Securities and Exchange Commission and do not reflect
the Company's estimates or projections of future prices of the shares
of the Company's common stock. There can be no assurance that the
amounts reflected in this table will be achieved.
In fiscal year 1997, none of the executive officers named in the
Summary Compensation Table exercised any of the options granted to him under
the Option Plan. The following table sets forth information with respect to
the unexercised options to purchase shares of the Company's Common Stock
granted under the Option Plan to the executive officers named in the Summary
Compensation Table and held by them at July 31, 1997.
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FISCAL YEAR-END OPTION VALUES
AS OF JULY 31, 1997
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NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS(1)
OPTIONS -----------------------
-------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ------------- ----------- --------------
Richard K. McClelland 70,000 132,000 $210,000(2) $ 99,000
Robert P. Capps -- 46,000 -- --
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(1) Based on the closing price of the Company's Common Stock on July 31, 1997
which price was $7.25 per share.
(2) Does not give effect to the Company's agreement to pay a cash bonus to Mr.
McClelland upon exercise of his option to purchase 48,000 of these shares
equal to the exercise price multiplied by the number of shares purchased.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors and executive officers, and persons who own more than 10% of the
Company's common stock, are required to report their initial ownership of
Company's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates have been established
for these reports, and the Company is required to disclose in this proxy
statement any failure to file by these dates. Based solely upon a review of
Forms 3,4 and 5 furnished to the Company, the Company believes that all of its
directors, officers and applicable stockholders timely filed these reports.
STOCK PRICE PERFORMANCE
Set forth below is a line graph indicating the stock price performance
of the Company's common stock for the period beginning August 13, 1996 (the
date of the Company's initial public offering) and ending July 31, 1997 as
contrasted with the NASDAQ Composite Index and the Russell 2000 Stock Index**.
The graph assumes that $100 was invested at the beginning of the period and has
been adjusted for any stock dividends distributed after August 13, 1996. No
cash or stock dividends have been paid during this period.
COMPARE CUMULATIVE TOTAL RETURN
AMONG DYNAMEX, INC., NASDAQ
COMPOSITE INDEX AND RUSSELL 2000 INDEX
MEASUREMENT PERIOD RUSSELL 2000 NASDAQ
(FISCAL YEAR COVERED) DYNAMEX INC INDEX COMPOSITE INDEX
--------------------- ----------- ------------ ---------------
08/13/96 100 100 100
09/30/96 108.82 109.94 107.65
12/31/96 116.18 115.66 112.94
03/31/97 75.00 109.68 106.82
06/30/97 96.06 127.46 126.40
07/31/97 85.29 133.37 139.75
ASSUMES $100 INVESTED ON AUG. 13, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JULY 31, 1997
** The Russell 2000 Stock Index represents companies with a market
capitalization similar to that of the Company. The Company does not
believe it can reasonably identify a peer group because it believes
that there is only one public company engaged in lines of business
directly comparative to those of the Company.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of October 17, 1997 for
(i) each person known by the Company to own beneficially more than 5% of the
Common Stock, (ii) each nominee director (all of whom are nominees), (iii) each
executive officer of the Company named in the Summary Compensation Table and
(iii) all directors and executive officers of the Company as a group. Except
pursuant to applicable community property laws and except as otherwise
indicated, each stockholder identified in the table possesses sole voting and
investment power with respect to its or his shares.
SHARES BENEFICIALLY
OWNED
NAME NUMBER(1) PERCENT
---- --------- -------
Directors, Nominees and Executive Officers:
Richard K. McClelland . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,800 1.2%
James M. Hoak, Jr.(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,275,942 17.2
Stephen P. Smiley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,160 *
Wayne Kern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,460 *
Brian J. Hughes(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Kenneth H. Bishop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,922 *
E. T. Whalen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 *
Robert P. Capps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,200 *
All directors and executive officers as a group (13 individuals) . . . . . . 1,556,135 20.6
Other 5% Stockholders:
Preferred Risk Mutual Insurance Company(4) . . . . . . . . . . . . . . . . . 523,166 7.1
111 Ashworth Road
West Des Moines, Iowa 50265
William Blair Fund & Company, L.L.C.(5) 726,630 9.8
222 West Adams Street
Chicago, Illinois 60606
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* Indicates less than 1%
(1) Includes shares issuable upon the exercise of stock options outstanding and
fully vested as of December 17, 1997.
(2) Mr. Hoak's address is One Galleria Tower, Suite 1050, 13355 Noel Road,
Dallas, Texas 75240. Excludes an aggregate of 26,572 shares owned by Mr.
Hoak's wife and children, as to which shares Mr. Hoak disclaims beneficial
ownership.
(3) Excludes 523,166 shares beneficially owned by Preferred Risk Life Insurance
Company and Preferred Risk Mutual Insurance Company, each of which employs
Mr. Hughes as Vice President-Investments. Mr. Hughes disclaims beneficial
ownership of such shares.
(4) Includes 261,583 shares beneficially owned by its affiliate Preferred Risk
Life Insurance Company.
(5) Includes 567,500 shares with respect to which William Blair & Company,
L.L.C. has sole investment power in its capacity as an investment adviser
and an aggregate of 159,130 shares that are owned directly by William Blair
& Company, L.L.C. and certain of its members.
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CERTAIN TRANSACTIONS
In December 1995, the Company issued $4.5 million of Bridge Notes to
certain holders including: (a) $1.0 million to Cypress Capital Partners I, L.P.
("Cypress"), which entity was controlled by certain Company affiliates as
described below; (b) an aggregate of approximately $1.8 million to various
limited partners of Cypress (including (i) Preferred Risk Mutual Insurance
Company and Preferred Risk Life Insurance Company (each a stockholder of the
Company and an employer of Brian J. Hughes, a director and a member of the
Compensation Committee of the Company) and (ii) Stephen P. Smiley (a director
and a member of the Compensation Committee of the Company)) and to certain
affiliates of Cypress' general partner; and (c) an aggregate of approximately
$1.8 million to James M. Hoak, Jr. and the general partner of Cypress. Upon
issuance of the Bridge Notes, the holders thereof received Bridge Warrants
which enabled them upon exercise to purchase an aggregate of 540,000 shares of
Common Stock at a price of $.025 per share. In August 1996, the Company
redeemed the Bridge Notes and the holders exercised their Bridge Warrants. At
the time of the December issuance of the Bridge Notes and Bridge Warrants and
the August 1996 redemption and exercise of same, respectively, (a) Cypress was
a principal stockholder of the Company, and (b) James M. Hoak, Jr., a Company
director, was the Chairman and sole stockholder of the 5% general partner of
Cypress and owned a 45% limited partnership interest in Cypress. Mr. Smiley
served as President of the general partner of Cypress from its inception in
1992 through January 1996. Mr. Hughes served as a member of the Advisory Board
of Cypress from March 1993 through August 1997. As of August 1997, Cypress had
distributed to its limited partners all of its shares of the Company's Common
Stock.
In August 1996, the Company paid Hoak Breedlove Wesneski & Co. usual
and customary fees related to investment banking services rendered in such
firm's capacity as a co-manager of the initial public offering of the Company's
Common Stock. Mr. Hoak is the Chairman and a director of Hoak Breedlove
Wesneski & Co. In addition, Mr. Hoak is Chairman and a principal stockholder
of Hoak Breedlove Wesneski & Co.'s parent corporation and Wayne Kern, a
director of the Company, is the Secretary of such parent corporation.
In August 1996, the Company purchased from Kenneth Bishop and certain
other parties all of the capital stock of Zipper Transportation Services, Ltd.
and a related company for an aggregate purchase price of approximately Cdn $2.5
million (approximately $1.8 million, as converted using an exchange rate of
0.73 U.S. dollars to 1.00 Canadian dollars) in cash and 56,922 shares of Common
Stock. Simultaneously with the closing of such acquisition, the Company repaid
Zipper's bank indebtedness of approximately Cdn $445,000 (approximately
$325,000, converted same as above) and Mr. Bishop became a director of the
Company.
In January 1997, the Company purchased from Robert Dobrient and
certain other parties all of the capital stock of Max America Holdings, Inc.
for an aggregate purchase price of approximately $3.9 million in cash (plus
contingent compensation if certain performance goals are met by the acquired
business) and 33,500 shares of the Company's common stock. Upon closing of the
acquisition, Mr. Dobrient was employed by the Company to manage the acquired
operations, and in September 1997, he was elected as the Company's Vice
President-Marketing and Assistant Secretary.
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In May 1997, the Company purchased from James C. Isaacson and certain
other parties all of the capital stock of Road Runner Transportation, Inc. for
an aggregate purchase price of approximately $11.2 million in cash (plus
contingent compensation if certain performance goals are met by the acquired
business) and 350,000 shares of the Company's common stock. Upon closing of the
acquisition, Mr. Isaacson was employed by the Company to manage the acquired
operations, and in September 1997, he was elected as the Company's Vice
President-Central U.S. Operations.
The Company believes that all of the transactions set forth above were
made on terms no less favorable to the Company than could have been obtained
from unaffiliated third parties. All future transactions, including loans,
between the Company and its officers, directors, principal stockholders and
affiliates, will be approved by a majority of the Board of Directors, including
a majority of the independent and disinterested outside directors, and have
been and will be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties.
APPROVAL OF AMENDED AND RESTATED 1996 STOCK OPTION PLAN
In June 1996, the Company's stockholders, Compensation Committee and
Board of Directors, approved and adopted the 1996 Stock Option Plan, which
amended and restated in its entirety the existing 1993 Stock Option Plan.
Effective October 15, 1997, the Company's Board of Directors and Compensation
Committee amended and restated the 1996 Stock Option Plan (as amended and
restated, the "Plan") to (i) increase the maximum number of shares of Common
Stock which may be issued under options or restricted stock awards granted
under the plan, (ii) change the formula for grants to non- employee directors,
(iii) impose a limit on the number of shares covered under options and
restricted stock awards granted to any one Plan participant, and (iv) make
certain nonsubstantive changes. At the Annual Meeting, the stockholders are
being asked to approve the Plan in its entirety.
As of October 17, 1997, options to purchase 619,384 shares had been
granted pursuant to the Plan (net of options canceled or expired), none of
which have been exercised and (i) 214,384 of these options have a weighted
average exercise price of $3.84 per share and expire between November 2003 and
July 2005, (ii) 257,000 of these options have an exercise price of $8.00 per
share and will expire in August 2006, (iii) 10,000 of these options have an
exercise price of $7.25 per share and will expire in August 2007, and (iv)
138,000 of these options have an exercise price of $10.375 and expire in
October 2007. A total of 380,616 shares remained available for future grants
under the Option Plan. As of October 17, 1997, the market value of all shares
of Common Stock subject to outstanding options was $6,503,532 based upon the
closing sale price of the Common Stock as reported on the Nasdaq National
Market on such date.
As of October 17, 1997, the following persons or groups, as the case
may be, had been granted options covering the following number of shares under
the Plan: (i) executive officers named in the Summary Compensation Table: Mr.
McClelland--217,000 shares and Mr. Capps--56,000 shares; (ii) current
executive officers as a group--370,500 shares; (iii) each nominee for director
(other than Mr. McClelland (see (i) above) and Mr. Hughes (who is ineligible to
accept options due to his employer's policy)--4,000 shares; and (iv) all
non-executive employees as a group--130,884 shares.
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The Plan is attached hereto as Exhibit A, to which reference is made
for a complete statement of the Plan provisions. The following summary of
certain of the Plan provisions is qualified, in its entirety, by reference to
the attached Plan.
Plan Summary
General. The purpose of the Plan is to attract and retain the best
available employees and directors of the Company and its subsidiaries, to
provide additional incentive to such persons and to promote the success of the
business of the Company. Under the Plan, any employee, including an employee
who is a director, is eligible to receive incentive stock options ("ISOs") (as
defined in Section 422 (formerly Section 422A) of the Internal Revenue Code of
1986, as amended (the "Code")), nonqualified stock options (which do not meet
the requirements of Section 422) and restricted stock grants (which
restrictions may include, without limitation, restrictions on the right to vote
or receive dividends with respect to such shares). Non-employee directors are
only eligible to receive nonqualified stock options pursuant to a specified
formula described below. There are approximately 1,100 persons eligible to
participate in the Plan.
The Committee administers and interprets the Plan and is authorized to
grant options and restricted stock to all directors and eligible employees,
including officers. The maximum number of shares of Common Stock approved for
issuance under the Plan is 1,000,000, of which no more than 100,000 shares may
be delivered pursuant to restricted stock grants and the exercise of options
awarded to non-employee directors. Options to purchase more than an aggregate
of 500,000 shares may not be granted to any one participant. Restricted stock
grants covering more than an aggregate of 100,000 shares may not be granted to
any one participant. The Committee designates the optionees or stock
recipients, the number of shares subject to such award and the terms and
conditions of each award. The purchase price under each option will be 100% of
the fair market value of the Common Stock of the Company on the date of award.
No option shall be exercisable more than ten years after the date the option is
awarded. An ISO may not be granted under the Plan to an employee who owns more
than 10% of the outstanding Common Stock unless the purchase price is 110% of
the fair market value of the Common Stock at the date of award and the option
is not exercisable more than five years after it is awarded.
The Committee may provide that the purchase price for shares subject
to an option be paid in full by cash, check, or share exchange, may arrange for
cashless exercise procedures, or may arrange financing for such purchase
(subject to applicable laws and regulations). The Committee may determine the
effect on (which effect may include termination of) an option or restricted
stock grant (other than an option or restricted stock grant granted to non-
employee directors) of the disability, death, retirement or other termination
of employment of a Plan participant and shall determine the extent to which the
period during which the participant's legal representative, or beneficiary may
exercise rights under such award. Shares of restricted stock, prior to the
lapse of all restrictions thereon, and options, may not be transferred other
than by will or the laws of descent and distribution. No option shall be
exercisable during the lifetime of an optionee by any person other than the
optionee or his guardian or legal representative. Unless sooner terminated,
the Plan will terminate on June 5, 2006, and no awards may thereafter be
granted under the Plan.
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Non-Employee Directors. Non-employee directors are granted a
nonqualified option to purchase 2,000 shares on the date of their initial
election or appointment to the Board. Non-employee directors subsequently
reelected at any Annual Meeting of stockholders receive as of the date of such
meeting (commencing with the 1998 Annual Meeting) a nonqualified option to
purchase 2,000 shares. Options granted to each non-employee director are
immediately exercisable. If a non-employee director ceases to be a director of
the Company, such director's options shall be exercisable by him only during
the six months following the date he ceases to be a director (or if he dies
while a director, by his or his estate's legal representative within 6 months
of the date of death) except that, a non-employee director's options shall
terminate immediately on the date such person is removed "for cause", which is
defined as fraud, intentional misrepresentation, embezzlement, misappropriation
or conversion of assets or opportunities of the Company.
Acceleration of Exercisability for Executive Officers and Directors.
An option or restricted stock grant awarded to an executive officer or
director, unless such award provides otherwise, will become immediately
exercisable, and all restrictions on any shares of restricted stock subject to
a restricted stock grant will immediately lapse, upon the occurrence of any of
the following: (a) the sale, transfer or other conveyance of all or
substantially all of the assets of the Company, (b) the acquisition of
beneficial ownership of securities representing 15% or more of the voting power
of the Company by any person or entity other than the Company and certain named
stockholders, (c) the commencement of a tender offer or (d) the failure at any
stockholders meeting following an election contest of any person nominated by
the Company in the mailed proxy materials to win election to the Board.
Amendment of Plan. The Board may amend or terminate the Plan
without the approval of the stockholders, unless stockholder approval is
necessary to comply with any applicable tax or regulatory requirements and
provided that, the section of the Plan addressing awards to non-employee
directors, and the section concerning acceleration of exercisability under
certain changes of control, to the extent such section relates to awards to
non-employee directors, may not be amended more than once every six months
other than to comport with changes in the tax or regulatory requirements. If
any amendment or termination materially and adversely affects the rights of any
award holder then outstanding, such amendment or termination shall not be
deemed to alter such rights unless the holder shall consent thereto.
Tax Status of Options and Restricted Stock Grants
The following discussion is based on relevant provisions of the Code,
the Treasury Regulations promulgated thereunder, published revenue rulings and
judicial decisions in effect at the date hereof. There can be no assurance
that future changes in applicable law or administrative and judicial
interpretations thereof will not adversely affect the tax consequences
discussed herein or that there will not be differences of opinion as to the
interpretation of applicable law.
Incentive Stock Options. All stock options that qualify under the
rules of Section 422 of the Code will be entitled to ISO treatment. Among
other requirements, to receive ISO treatment, an optionee is not permitted to
dispose of the acquired stock (i) within two years after the option is granted
or (ii) within one year after exercise. In addition, the individual must have
been an employee of the Company for the entire time from the date of granting
of the option until three months (one
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year if the employee is disabled) before the date of the exercise. The
requirement that the individual be an employee and the two-year and one-year
holding periods are waived in the case of death of the employee. If all such
requirements are met, no tax will be imposed upon exercise of the option, and
any gain upon sale of the stock will be entitled to capital gain treatment
(assuming the stock constitutes a capital asset in the hands of the optionee).
The applicable capital gain rate depends on how long the ISO shares are held
after exercise. If ISO shares are sold one year or later after exercise (and
two years after grant) the gain will be taxed at the maximum rate of 28%. If,
on the other hand, ISO shares are sold 18 months or later after exercise (and
two years after grant), the gain will be taxed at the maximum rate of 20%. The
employee's gain on exercise (the excess of fair market value at the time of
exercise over the exercise price) of an ISO is a tax preference item and,
accordingly, is included in the computation of alternative minimum taxable
income.
If an employee does not meet the two-year and one-year holding
requirement (a "disqualifying disposition"), but does meet all other
requirements, tax will be imposed at the time of sale of the stock, but the
employee's gain realized on exercise will be treated as ordinary income rather
than capital gain and the Company will get a corresponding deduction at the
time of sale. Any additional gain on sale will be short-term or long-term
capital gain, depending on the holding period of the stock (assuming the stock
constitutes a capital asset in the hands of the optionee). If the amount
realized on the disqualifying disposition is less than the value at the date of
exercise, the amount includible in gross income, and the amount deductible by
the Company, will equal the excess of the amount realized on the sale or
exchange over the exercise price.
An optionee's stock option agreement may permit payment for stock upon
the exercise of an ISO to be made with other shares of the Company's Common
Stock. In such a case, in general, if an employee uses stock acquired pursuant
to the exercise of an ISO to acquire other stock in connection with the
exercise of an ISO, it may result in ordinary income if the stock so used has
not met the minimum statutory holding period necessary for favorable tax
treatment as an ISO.
Nonqualified Stock Options. In general, no taxable income will be
recognized by the optionee, and no deduction will be allowed to the Company,
upon the grant of an option. Upon exercise of a nonqualified option an
optionee will recognize ordinary income (and the Company will be entitled to a
corresponding tax deduction if applicable withholding requirements are
satisfied) in an amount equal to the amount by which the fair market value of
the shares on the exercise date exceeds the option price. Any gain or loss
realized by an optionee on disposition of such shares generally is a capital
gain or loss and does not result in any further tax deduction to the Company.
Restricted Stock Grants. The award of restricted stock under the Plan
will result in the award recipient's recognition of ordinary income in the
amount of the fair market value of such stock on the date of the award and the
Company will be entitled to a corresponding deduction. This is so unless the
stock is issued subject to a substantial risk of forfeiture, in which case the
recognition of income may be deferred until the restrictions have lapsed. Gain
or loss recognized on a subsequent sale or exchange of the stock received will
be capital gain or loss (assuming the stock constitutes a capital asset in the
hands of the optionee), which will be long-term or short-term depending on how
long the shares have been held at the time of the sale or exchange.
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Other Tax Matters. If an optionee's option becomes immediately
exercisable because of a change in (i) the ownership or effective control of
the Company or (ii) the ownership of a substantial portion of the assets of the
Company (a "Change in Control") and the participant is an officer, shareholder
or highly-compensated employee of the Company, such acceleration could be
subject to the "golden parachute" provisions of Sections 280G and 4999 of the
Code. See discussion of accelerated vesting events under "General-Acceleration
of Exercisability for Executive Officers and Directors," above. Such golden
parachute provisions of the Code (i) disallow a federal income tax deduction to
the payor of an "excess parachute payment", and (ii) impose a non-deductible
excise tax on the recipient of such payment equal to 20% of the "excess
parachute payment". In general, a payment will be a "parachute payment" if it
is in the nature of compensation and (i) is contingent on a change in control
and (ii) together with all other such payments to the recipient, the present
value of such payments equals or exceeds three times his or her "base amount"
(i.e., the average of the employee's annual compensation during the five years
immediately preceding the year in which the Change in Control occurs). "Excess
parachute payments" generally are parachute payments that exceed the greater of
(i) the recipient's base amount or (ii) reasonable compensation for personal
services actually rendered by the employee. Whether a payment will be a
parachute payment or an excess parachute payment depends upon facts and
circumstances that cannot be known until payment is made. Under the Proposed
Regulations to Section 280G of the Code, when an employee's right to exercise
an option is accelerated as a result of a Change in Control, the employee will
be treated as receiving a payment in the nature of compensation at that time if
the option has an "ascertainable fair market value." Under the Proposed
Regulations, a calculation must be made of the portion of the payment which
will be treated as contingent upon a change in control, which generally will be
the sum of (i) the amount by which the accelerated payment exceeds the present
value of the payment that was expected to be made absent the acceleration plus
(ii) an amount reflecting the lapse of the obligation of the employee to
perform services in order to earn such expected payment. In addition, Section
162(m) of the Code imposes limitations on the deductibility of compensation
paid to any covered employee in excess of $1,000,000 for such employee for a
taxable year.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE COMPANY'S AMENDED AND RESTATED 1996 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Representatives of Deloitte & Touche, the independent accounting firm
that audited the consolidated financial statements of the Company for the
fiscal year ended July 31, 1997, are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented for action at the 1998 annual
meeting of stockholders must be received at the Company's principal executive
offices no later than July 5, 1998, for inclusion in the proxy statement and
form of proxy relating to the 1998 Annual Meeting.
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MISCELLANEOUS
The Board of Directors knows of no other matters which are likely to
come before the Annual Meeting. If any other matters should properly come
before the Annual Meeting, it is the intention of the persons named in the
accompanying form of Proxy to vote on such matters in accordance with their
best judgment.
The solicitation of proxies is made on behalf of the Board of
Directors of the Company, and the cost thereof will be borne by the Company.
The Company will also reimburse brokerage firms and nominees for their expenses
in forwarding proxy material to beneficial owners of the Common Stock of the
Company. In addition, officers and employees of the Company (none of whom will
receive any compensation therefore in addition to their regular compensation)
may solicit proxies. The solicitation will be made by mail and, in addition,
may be made by telegrams, personal interviews, or telephone.
By Order of the Board of Directors
/s/ ROBERT P. CAPPS
Robert P. Capps
Assistant Secretary
DATED: November 3, 1997
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REPORT OF THE COMPENSATION COMMITTEE
The Company's Compensation Committee (the "Committee") is empowered to
review and recommend to the full Board of Directors the annual compensation and
compensation procedures for all executive officers of the Company. The
Committee (comprised solely of non-employee directors) also administers the
Option Plan.
As a matter of policy, the Compensation Committee believes that the
annual compensation of the executive officers should consist of both a base
salary component and bonus component. The base salary component should be
based on generally subjective factors and include the contribution the
executive officer made and is anticipated to make to the success of the
Company, the level of experience and responsibility of the executive officer,
the competitive position of the Company's executive compensation and the
Company's historical levels of compensation for executive officers. The
Compensation Committee does not expect to assign quantitative relative weights,
however, to any of these factors. The bonus component of the annual
compensation of the executive officers should provide executive officers with
the opportunity to earn a significant portion of their base salary in the form
of incentive compensation, which therefore puts a significant portion of their
total compensation "at risk." This incentive compensation is contingent upon
the achievement of certain agreed upon individual goals for each executive
officer and the achievement of certain corporate objectives such as continued
growth in the Company's earnings and revenues.
Effective as of January 1, 1997, the Company implemented a qualified
401(k) plan for its U.S. employees. This plan is designed to provide the
Company's employees with a tax-deferred long-term savings vehicle. The Company
does not provide matching contributions to such Plan.
The Company does not provide for any long-term compensation for
executive officers other than through the granting of stock options. The
Committee believes that the grant of stock options enables the Company to more
closely align the economic interest of the executive officers to those of the
stockholders. Option grants are made in the discretion of the Compensation
Committee. The number of stock options granted to each executive employee is
based primarily on their relative positions and responsibilities within the
Company.
Pursuant to his employment contract with the Company, Richard K.
McClelland, the Company's chief executive officer, may not be awarded an
annual bonus in an amount greater than 60% of his base salary for the fiscal
year then ended. For fiscal year 1997, Mr. McClelland was awarded a bonus of
$120,000, which amount represented 60 % of his base compensation and, when
aggregated with his salary, represented a 30% increase over his aggregate
fiscal 1996 salary and bonus. The bonus was based on several factors, including
the fiscal 1997 growth in the Company's revenues and earnings, consummation of
the initial public offering of the Company's Common Stock and the consummation
of a series of acquisitions during the year. Additionally, Mr. McClelland was
awarded options under the Company's Stock Option Plan in August 1996 to
purchase 99,000 shares of the Company's Common Stock and in October 1997 was
awarded options to purchase 15,000 shares of the Company's Common Stock.
Compensation Committee
Stephen P. Smiley (chairman)
Brian J. Hughes
Kenneth H. Bishop
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EXHIBIT "A"
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
21
DYNAMEX INC. AMENDED AND RESTATED 1996 STOCK OPTION PLAN
SECTION 1.
PURPOSE
The purposes of this Dynamex Inc. Amended and Restated 1996 Stock Option
Plan (this "Plan") are to attract and retain the best available employees and
directors of Dynamex Inc. (the "Company") and any Parent or Subsidiary of the
Company (each as hereinafter defined), to provide additional incentive to such
persons and to promote the success of the business of the Company. This Plan
is intended to comply with Rule 16b-3 under Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision ("Rule 16b-3"), and this Plan shall be construed, interpreted and
administered to so comply. This Plan amends and restates the Dynamex Inc.1996
Stock Option Plan.
SECTION 2.
OTHER DEFINITIONS
As used in this Plan:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Compensation Committee or other committee
appointed by the Board, which shall consist of two or more directors, each of
whom shall be a "disinterested person" within the meaning of Rule 16b-3(c)
under the Exchange Act, or any successor provision.
"Common Stock" means the Common Stock, $.01 par value, of the Company.
"Effective Date" means June 5, 1996.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Fair Market Value" means, with respect to the Common Stock and at any
date, (i) the reported closing price of such stock on the New York Stock
Exchange or other established stock exchange or the Nasdaq National Market
System on such date, or if no sale of such stock shall have been made on such
an exchange or the Nasdaq National Market System on that date, on the preceding
date on which there was such
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a sale, (ii) if such stock is not then listed on such an exchange or quoted on
the Nasdaq National Market System, the average of the closing bid and asked
prices per share for such stock in the over-the-counter market as quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") on such date, or (iii) if such stock is not then listed on such an
exchange or quoted on Nasdaq or the Nasdaq National Market System, an amount
determined in good faith by the Committee in its sole discretion.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under this Plan which is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Non-Employee Director" means a director of the Company who is not an
employee of the Company or any parent or Subsidiary of the Company.
"Non-Qualified Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under this Plan which is not intended to
be an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
"Participant" means a person selected by the Committee to receive an
award under this Plan and Non-Employee Directors.
"Restricted Stock" means Common Stock awarded to a Participant subject
to restrictions pursuant to the Plan.
"Restricted Stock Grant" means an award of shares of Restricted Stock.
"Section 16 Participant" means a Participant subject to Section 16 of
the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.
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SECTION 3.
ADMINISTRATION
(a) Committee Authority; Delegation. This Plan shall be administered
by the Committee. Among other things, the Committee shall have authority,
subject to the terms of this Plan (including, without limitation, the
provisions governing participation in this Plan by Non-Employee Directors), to
grant awards under this Plan and to determine the individuals to whom and the
time or times at which awards may be granted, the type(s) of award(s) to be
granted to such individuals pursuant to this Plan and the terms and conditions
of such awards. All administrative powers may be delegated by the Committee,
except where (i) such powers with respect to the selection of and determination
of awards for Section 16 Participants are required to be exercised by the
Committee in order to enable this Plan to qualify for the exemption provided by
Rule 16b-3 or (ii) such delegation would cause the benefits under this Plan to
"covered employees" within the meaning of Section 162(m) of the Code to not
qualify as performance-based compensation within the meaning of Section 162(m)
of the Code and applicable interpretive authority thereunder.
(b) Actions of Committee. Subject to the provisions of Section 10(e)
hereof, the Committee shall have authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation of this
Plan as it shall from time to time consider advisable, to interpret the
provisions of this Plan and any Option Agreement or Restricted Stock Agreement
(each as hereinafter defined), and to decide all disputes arising in connection
with this Plan. The Committee's decisions and interpretations shall be final
and binding. Any action of the Committee with respect to the administration of
this Plan shall be taken pursuant to a majority vote or by the unanimous
written consent of its members.
(c) Indemnification. The Company shall indemnify and hold harmless
each director of the Company and each Committee member for any action or
determination made in good faith with respect to this Plan or any Option
Agreement or Restricted Stock Agreement.
SECTION 4.
ELIGIBILITY
The following individuals shall be eligible to receive awards pursuant
to this Plan as follows:
(a) Any employee (including any officer or director who is an
employee) of the Company or any Parent or Subsidiary of the Company shall be
eligible to receive Incentive Stock Options under this Plan. Any employee
(including any officer or
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director who is an employee) of the Company or any Parent, Subsidiary or other
affiliate of the Company shall be eligible to receive Non-Qualified Stock
Options and Restricted Stock Grants under this Plan. Eligible employees may
receive more than one Option or Restricted Stock Grant under this Plan.
(b) Any Non-Employee Director of the Company shall be eligible to
receive Options and Restricted Stock Grants only as set forth in Section 8
hereof.
SECTION 5.
STOCK AVAILABLE UNDER THIS PLAN
(a) Number of Shares Available. Subject to any adjustments made
pursuant to Section 5(b) hereof, the aggregate number of shares of Common Stock
that may be delivered pursuant to the exercise of all Options granted and
pursuant to all Restricted Stock Grants awarded under this Plan shall be
1,000,000, of which no more than 100,000 shares may be delivered pursuant to
Restricted Stock Grants and the exercise of Options awarded to Non-Employee
Directors in accordance with Section 8 hereof. If any Option expires or is
terminated before exercise or if any portion of any Restricted Stock Grant is
forfeited for any reason, the shares of Common Stock which were subject to but
were either forfeited to the Company or not delivered under such Option or
Restricted Stock Grant, and any other shares of Common Stock that for any other
reason are not issued to a Participant, shall again be available for award
under this Plan as if no Option or Restricted Stock Grant had been awarded with
respect to such shares. Awards under this Plan may be fulfilled with either
authorized and unissued shares of Common Stock or issued and reacquired shares
of Common Stock.
(b) Adjustment. In the event of a stock dividend, stock split or
combination of shares of Common Stock, recapitalization or other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company, appropriate and proportionate
adjustment shall be made in (i) the number and kind of shares of stock in
respect of which Options or Restricted Stock Grants may be awarded under this
Plan, (ii) the number and kind of shares of stock or other property subject to
outstanding Options and Restricted Stock Grants, and (iii) the award, exercise
or conversion price with respect to any of the foregoing.
SECTION 6.
TERMS AND CONDITIONS OF OPTIONS
(a) Grants of Options. Subject to the provisions of this Plan, the
Committee may award Incentive Stock Options and Non-Qualified Stock Options and
determine
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the number of shares to be covered by each Option, the option price therefor,
the term of the Option, and the other conditions and limitations applicable to
the exercise of the Option. The terms and conditions of Incentive Stock
Options shall be subject to and comply with Section 422 of the Code, or any
successor provision, and any regulations thereunder. Each grant of an Option
may be made alone or in combination with, in addition to or in relation to any
other award authorized by this Plan. The terms of each Option need not be
identical, and the Committee need not treat Participants uniformly. Except as
otherwise provided by this Plan or a particular Option Agreement, any
determination with respect to an Option may be made by the Committee at the
time of award or at any time thereafter.
(b) Agreement in Writing; Provisions. Each Option under this Plan
shall be evidenced by a written agreement (each, an "Option Agreement")
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of this Plan as the Committee considers necessary or advisable to achieve the
purposes of this Plan or comply with applicable tax and regulatory laws and
accounting principles. Each Option Agreement shall specify whether the Options
granted thereby are Incentive Stock Options or Non-Qualified Stock Options.
(c) Option Price. The option price per share of Common Stock
purchasable under an Option shall be 100% of the Fair Market Value of the
Common Stock on the date of award. If the Participant owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of the
Company or any Subsidiary or Parent of the Company and an Incentive Stock
Option is granted to such Participant, the option price shall be 110% of Fair
Market Value of the Common Stock on the date of award.
(d) Method of Payment. The purchase price for any share purchased
pursuant to the exercise of any Option granted under this Plan shall be paid in
full upon exercise of the Option by any of the following methods, to the extent
permitted under the particular Option Agreement: (i) by cash, (ii) by check or
(iii) by transferring to the Company shares of Common Stock at their Fair
Market Value as of the date of exercise of the Option. Notwithstanding the
foregoing, the Company may arrange for or cooperate in permitting cashless
exercise procedures and may extend and maintain, or arrange for the extension
and maintenance of, credit to a Participant to finance the Participant's
purchase of shares pursuant to the exercise of Options, on such terms as may be
approved by the Committee, subject to applicable regulations of the Federal
Reserve Board and any other applicable laws or regulations in effect at the
time such credit is extended.
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(e) Termination. No Option shall be exercisable more than ten years
after the date the Option is awarded. If a Participant owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent of the Company and an Incentive Stock
Option is awarded to such Participant, such Option shall not be exercisable
after the expiration of five years from the date of award.
(f) Exercise. No Option shall be exercisable during the lifetime of
a Participant by any person other than the Participant or his or her guardian
or legal representative. The Committee shall have the power to set the time or
times within which each Option shall be exercisable and to accelerate the time
or times of exercise of each Option, other than, in each case, Options awarded
or to be awarded to Non-Employee Directors. To the extent that a Participant
has the right to exercise one or more Options and purchase shares pursuant
thereto, the Options may be exercised from time to time by written notice to
the Company stating the number of shares being purchased and accompanied by
payment in full of the option price for such shares. Any certificate for
shares of outstanding Common Stock used to pay the option price shall be
accompanied by a stock power duly endorsed in blank by the registered owner of
the certificate (with the signature thereon guaranteed). In the event the
certificate tendered by the Participant in such payment covers more shares than
are required for such payment, the certificate shall also be accompanied by
instructions from the Participant to the Company's transfer agent with respect
to the disposition of the balance of the shares covered thereby.
(g) Disability, Death, Retirement or Other Termination. The
Committee shall determine the effect on an Option (other than an Option awarded
or to be awarded to a Non-Employee Director) of the disability, death,
retirement or other termination of employment of a Participant and the extent
to which, and the period during which, the Participant's legal representative,
guardian or designated beneficiary may exercise rights thereunder.
(h) Nontransferability. No Option or interest therein or right
thereunder shall be transferable by a Participant other than by will or the
laws of descent and distribution.
(i) Limitations on Amount.
(1) If required by applicable tax rules regarding a particular
grant, to the extent that the aggregate Fair Market Value (determined as
of the date an Incentive Stock Option is granted) of the shares with
respect to which an Incentive Stock Option grant under this Plan (when
aggregated, if appropriate, with shares subject to other Incentive Stock
Option grants made before said
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grant under this Plan or any other plan maintained by the Company or any
Parent or Subsidiary of the Company) is exercisable for the first time
by a Participant during any calendar year exceeds $100,000 (or such
other limit as is prescribed by the Code), such Option grant shall be
treated as a grant of Non-Qualified Stock Options pursuant to Code
Section 422(d).
(2) In no event shall Options be granted to any one
Participant to purchase more than 500,000 shares.
(j) Disposition of Incentive Stock Options. A Participant shall
notify the Committee in the event that he or she disposes of Common Stock
acquired upon exercise of an Incentive Stock Option within the two-year period
following the date the Incentive Stock Option was granted or within the one-
year period following the date he or she received Common Stock upon the
exercise of an Incentive Stock Option.
(k) Option Modification. The Committee may amend, modify or
terminate any outstanding Option held by a Participant other than a Non-
Employee Director, including substituting therefor another Option of the same
or a different type, changing the date of exercise or vesting and converting an
Incentive Stock Option to a Non-Qualified Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines in its sole discretion that the action, taking into account any
related action, would not materially and adversely affect the Participant.
SECTION 7.
TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS
(a) Restricted Stock Grants. Subject to the provisions of this Plan,
the Committee may award Restricted Stock Grants and determine the number of
shares of Restricted Stock covered by such Grant, the restrictions thereon
(which may include, without limitation, restrictions on the transfer of such
shares, restrictions on the right to vote such shares and restrictions on the
right to receive dividends on such shares), the time or times at which and the
conditions upon which such restrictions shall lapse, and the other terms and
conditions applicable to such Grant. Each Restricted Stock Grant may be made
alone or in combination with, in addition to or in relation to any other award
authorized by this Plan. The terms of each Restricted Stock Grant need not be
identical, and the Committee need not treat Participants uniformly. Except as
otherwise provided by this Plan or a particular Restricted Stock Agreement, any
determination with respect to a Restricted Stock Grant may be made by the
Committee at the time of award or at any time thereafter. The Committee may,
but shall not be required to, award Restricted Stock Grants based upon the
attainment of one or more "performance goals" within the meaning of Section
162(m) of the Code
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and applicable interpretive authority thereunder. In no event shall Restricted
Stock Grants covering more than 100,000 shares be granted to any one
Participant.
(b) Agreement in Writing; Provisions. Each Restricted Stock Grant
shall be evidenced by a written agreement (each, a "Restricted Stock
Agreement") delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with
the provisions of this Plan as the Committee considers necessary or advisable
to achieve the purposes of this Plan or comply with applicable tax and
regulatory laws and accounting principles.
(c) Delivery of Shares. Each share of Restricted Stock, when issued,
shall be issued in the name of the Participant and the certificate evidencing
such share shall be deposited with the Company, together with a stock power
duly endorsed in blank, upon such issuance and continuing until all applicable
restrictions on such share shall have lapsed.
(d) Disability, Death, Retirement or Other Termination. The
Committee shall determine the effect on a Restricted Stock Grant (other than a
Restricted Stock Grant awarded or to be awarded to a Non-Employee Director) of
the disability, death, retirement or other termination of employment of a
Participant.
(e) Nontransferability. Prior to the lapse of all restrictions
thereon, no share of Restricted Stock or interest therein or right thereunder
shall be transferable by a Participant otherwise than by will or the laws of
descent and distribution.
(f) Restricted Stock Grant Modification. The Committee may amend,
modify or terminate any outstanding Restricted Stock Grant held by a
Participant other than a Non-Employee Director, including substituting therefor
another Restricted Stock Grant of the same or a different type and changing the
time or times at which any restrictions shall lapse, provided that the
Participant's consent to such action shall be required unless the Committee
determines in its sole discretion that the action, taking into account any
related action, would not materially and adversely affect the Participant.
SECTION 8.
NONDISCRETIONARY AWARDS
TO NON-EMPLOYEE DIRECTORS
Notwithstanding any other provision of this Plan, Non-Employee Directors
shall participate in this Plan only to the extent set forth in this Section 8.
The provisions of this Plan applicable to awards granted or to be granted to
Non-Employee Directors are intended to comply with the provisions of Rule 16b-3
under the Exchange Act, or
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any successor provision, and such provisions shall be construed, interpreted
and administered to so comply. The Committee shall have no authority to take
any action, and shall not take any action, if the authority to take such
action, or the taking of such action, would result in noncompliance with such
provisions.
(a) Date of Grant; Number of Shares. On the date upon which a Non-
Employee Director is first elected or appointed a member of the Board, he shall
receive a grant of a Non-Qualified Stock Option to purchase 2,000 shares of
Common Stock. Non-Employee Directors subsequently re-elected at any Annual
Meeting of stockholders shall receive as of the date of such Annual Meeting
(commencing with the 1998 Annual Meeting), the grant of a Non-Qualified Stock
Option to purchase 2,000 shares of Common Stock. Options granted to Non-
Employee Directors shall be immediately exercisable.
(b) Term. The term of each Option granted to a Non-Employee Director
shall be ten years from its date of grant, unless sooner terminated or extended
in accordance with Section 8(d) below.
(c) Option Price. The option price of the shares of Common Stock
subject to each Option granted to a Non-Employee Director shall be the Fair
Market Value of such shares on the date the Option is granted.
(d) Exercise after Death or Other Termination. If a Non-Employee
Director ceases to be a director of the Company, such Non-Employee Director's
Options shall be exercisable by him only during the six months following the
date such person ceases to be a director, except that:
(i) if a Non-Employee Director dies while serving as a
director, such Non-Employee Director's Options shall be exercisable by
his or her executor or administrator or, if not so exercised, by the
legatees or the distributees of his or her estate, only during the six
months following his or her death; and
(ii) notwithstanding the foregoing, a Non-Employee Director's
Options shall terminate immediately on the date that such person is
removed as a director for cause. For purposes of this Section 8, a Non-
Employee Director shall be considered to have been dismissed "for cause"
in the event he or she is dismissed on account of any act of (x) fraud
or intentional misrepresentation or (y) embezzlement, misappropriation,
or conversion of assets or opportunities of the Company or any
Subsidiary of the Company.
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SECTION 9.
ACCELERATION OF EXERCISABILITY AND
VESTING UNDER CERTAIN CIRCUMSTANCES
Notwithstanding any provision in this Plan to the contrary, with regard
to any Option or Restricted Stock Grant awarded to any executive officer or
director of the Company, unless the particular Option or Restricted Stock
Agreement provides otherwise, the Option will become immediately exercisable
and vested in full, and all restrictions on any shares of Restricted Stock
subject to a Restricted Stock Grant shall immediately lapse, upon the
occurrence, before the expiration or termination of such Option or forfeiture
of such shares, of any of the events listed below:
(a) a sale, transfer or other conveyance of all or substantially all
of the assets of the Company on a consolidated basis;
(b) the acquisition of beneficial ownership (as such term is defined
in Rule 13d-3 promulgated under the Exchange Act) by any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than (i) the Company, (ii) Cypress Capital Partners
I, L.P., (iii) James M. Hoak, or (iv) any of the affiliates of
any of the foregoing, directly or indirectly, of securities
representing 15% or more of the total number of votes that may be
cast for the election of directors of the Company; or
(c) the commencement (within the meaning of Rule 14d-2 promulgated
under the Exchange Act) of a "tender offer" for stock of the
Company subject to Section 14(d)(2) of the Exchange Act; or
(d) the failure at any annual or special meeting of the Company's
stockholders following an "election contest" subject to Rule 14a-
11 promulgated under the Exchange Act, of any of the persons
nominated by the Company in the proxy material mailed to
stockholders by the management of the Company to win election to
seats on the Board, excluding only those who die, retire
voluntarily, are disabled or are otherwise disqualified in the
interim between their nomination and the date of the meeting.
SECTION 10.
MISCELLANEOUS
(a) No Right of Employment. No person shall have any claim or right
to be awarded an Option or Restricted Stock Grant, and the award of an Option
or Restricted Stock Grant shall not be construed as giving a Participant the
right to continued
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employment. The Company expressly reserves the right at any time to dismiss a
Participant free from any liability or claim under this Plan, except as
expressly provided in the applicable Option or Restricted Stock Agreement.
(b) Plan Not Exclusive. Nothing contained in this Plan shall prevent
the Company from adopting other or additional compensation arrangements for its
employees or directors.
(c) No Rights as Stockholders. Subject to the provisions of the
applicable Option or Restricted Stock Agreement, no Participant shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed under this Plan until he or she becomes the record holder thereof.
(d) Investment Representation. The Committee may require, as a
condition of receiving shares of Common Stock (including shares of Restricted
Stock) issued pursuant to any Option or Restricted Stock Grant, that a
Participant furnish to the Company such written representations and information
as the Committee deems appropriate to permit the Company, in light of the
existence or nonexistence of an effective Registration Statement under the
Securities Act, to deliver such shares in compliance with the provisions of the
Securities Act.
(e) Section 16 Participants. The Committee shall have no authority
to take any action, and shall not take any action, if the authority to take
such action, or the taking of such action, would disqualify this Plan from the
exemption provided by Rule 16b-3.
(f) Effectiveness. This Plan amendment and restatement shall become
effective upon its approval by the Board, subject to approval by the
stockholders of the Company. Prior to such stockholder approval, awards may be
granted under this Plan amendment and restatement subject to such stockholder
approval.
(g) Amendment; Termination. The Board may amend, suspend or
terminate this Plan or any portion thereof at any time, provided that (i) no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any applicable tax or regulatory requirement,
including any requirements for exemptive relief under Section 16(b) of the
Exchange Act or any successor provision, and (ii) Section 8 hereof and, as it
relates to awards granted or to be granted to Non-Employee Directors, Section 9
hereof may not be amended more than once every six months other than to comport
with changes in the Code or ERISA or the rules and regulations under either
thereof. If any amendment, suspension or termination of this Plan shall
materially and adversely affect the rights of the holder of any award then
outstanding, such amendment, suspension or termination shall not be deemed to
alter such rights unless the holder shall consent thereto.
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(h) Term. Options and Restricted Stock Grants may not be awarded
under this Plan after ten years from the Effective Date, but then outstanding
Options and Restricted Stock Grants may extend beyond such date. Unless sooner
terminated, this Plan shall terminate on the tenth anniversary of the Effective
Date, provided that such termination shall not terminate or affect any Option
or Restricted Stock Grant then outstanding.
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DYNAMEX INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby (a) acknowledges receipt of the Notice of
Annual Meeting of Stockholders of Dynamex Inc. (the "Company") to be held on
December 3, 1997, at the Four Seasons Resort and Club, Board Room, Lobby Level,
4150 N. MacArthur Boulevard, Irving, Texas 75038, at 9:00 a.m., Dallas, Texas
time, and the Proxy Statement in connection therewith, and (b) appoints Richard
K. McClelland and Robert P. Capps, or each of them, his proxies, with full
power of substitution and revocation, for and in the name, place and stead of
the undersigned, to vote upon and act with respect to all of the shares of
Common Stock of the Company standing in the name of the undersigned or with
respect to which the undersigned is entitled to vote and act at said meeting or
at any adjournment thereof, and the undersigned directs that his proxy be voted
as specified on the reverse side.
THIS PROXY WILL BE VOTED AND WILL BE VOTED AS SPECIFIED ON THE REVERSE
SIDE. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
FOR DIRECTORS AND FOR THE NAMED PROPOSAL.
If more than one of the proxies listed above shall be present in person
or by substitute at the meeting or any adjournment thereof, the majority of
said proxies so present and voting, either in person or by substitute, shall
exercise all of the powers hereby given.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
3702--DYNAMEX, INC.
34
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
I. ELECTION OF DIRECTORS For All
Nominees: Richard K. For Withhold (Except Nominee(s)
McClelland, James M. All All written below) For Against Abstain
Hoak, Jr., Stephen P. [ ] [ ] [ ] III. IN THE DISCRETION OF THE [ ] [ ] [ ]
Smiley, Wayne Kern, PROXIES, ON ANY OTHER
Brian J. Hughes, Kenneth MATTER THAT MAY PROPERLY
H. Bishop, and E.T. Whalen COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
__________________________
For Against Abstain
II. PROPOSAL TO APPROVE THE [ ] [ ] [ ] The undersigned hereby revokes any proxy
COMPANY'S AMENDED AND or proxies heretofore given to vote upon or act
RESTATED 1996 STOCK with respect to such stock and hereby ratifies
OPTION PLAN. and confirms all that said proxies, their
substitutes, or any of them, may lawfully do
by virtue hereof.
Dated: ______________, 1997
Signature(s) _____________________________________
__________________________________________________
Please date the proxy and sign your name
exactly as it appears hereon. Where there is
more than one owner, each should sign. When
signing as an attorney, administrator,
executor, guardian or trustee, please add
your title as such. If executed by a
corporation, the proxy should be signed by a
duly authorized officer. Please sign the
proxy and return it promptly whether or not
you expect to attend the meeting. You may
nevertheless vote in person if you do attend.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
3702--Dynamex, Inc.