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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 240.14a-12
P.A.M. TRANSPORTATION SERVICES, INC.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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(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:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
P.A.M. TRANSPORTATION SERVICES, INC.
297 WEST HENRI DETONTI BOULEVARD
TONTITOWN, ARKANSAS 72770
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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To our Stockholders:
The 2004 Annual Meeting of Stockholders of P.A.M. Transportation Services,
Inc., a Delaware corporation, will be held at Ford Field, 2000 Brush Street,
Detroit, Michigan 48226, on Thursday, May 20, 2004 at 9:00 a.m. local time, for
the following purposes:
(1) To elect eight directors to serve until the next annual meeting of
stockholders and until their successors have been elected and qualified;
and
(2) To conduct such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.
Only stockholders of record as of the close of business on April 1, 2004
will be entitled to notice of and to vote at the meeting or any adjournment or
postponement of the meeting.
By Order of the Board of Directors
/s/ Robert W. Weaver
ROBERT W. WEAVER
President and Chief Executive Officer
April 20, 2004
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN
ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE UNITED STATES.
P.A.M. TRANSPORTATION SERVICES, INC.
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ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 2004
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement and form of proxy, which are first being mailed to
stockholders on or about April 20, 2004, are furnished in connection with the
solicitation of proxies on behalf of our Board of Directors, for use at our
annual meeting of stockholders to be held at Ford Field, 2000 Brush Street,
Detroit, Michigan 48226, on Thursday, May 20, 2004, at 9:00 a.m., local time,
and at any or all adjournments or postponements of the meeting. The address of
our principal executive offices is 297 West Henri DeTonti Boulevard, Tontitown,
Arkansas 72770 and our telephone number is (479) 361-9111.
We are paying the costs of this solicitation. In addition to the mails,
proxies may be solicited by our officers and regular employees, without
remuneration, in person or by telephone, email or facsimile. It is anticipated
that banks, brokerage houses and other custodians, nominees and fiduciaries will
forward soliciting material to beneficial owners of stock entitled to vote at
the meeting, and such persons will be reimbursed for the out-of-pocket expenses
incurred by them for forwarding the material.
Any proxy given pursuant to this solicitation may be revoked by any
stockholder who attends the meeting and gives oral notice of his or her election
to vote in person, without compliance with any other formalities. In addition,
any proxy given pursuant to this solicitation may be revoked prior to the
meeting by delivering to the Secretary of PTSI an instrument revoking it or a
duly executed proxy for the same shares bearing a later date. Proxies that are
returned properly executed and not revoked will be voted in accordance with the
stockholder's directions specified in the proxy. Where no direction is
specified, proxies will be voted FOR the approval of the election of each of the
nominees for director listed in this proxy statement. Abstentions and broker
non-votes will not be counted as votes either in favor of or against the
election of any nominee.
Only stockholders of record at the close of business on the record date of
April 1, 2004 will be entitled to notice of and to vote at the annual meeting
and any adjournments or postponements of the annual meeting. As of April 1,
2004, there were 11,296,207 shares of our common stock outstanding. Each share
of common stock issued and outstanding on the record date is entitled to one
vote.
ELECTION OF DIRECTORS
Members of the Board of Directors of the company are elected annually to
serve until the next annual meeting of stockholders or until their successors
are elected and qualified. Directors are elected by a plurality of the votes of
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Our Bylaws provide that the number of members
of the Board of Directors shall be established from time to time by our
stockholders. The number of members of the Board is presently set by the
stockholders at eight.
The following eight individuals have been nominated by the Board of
Directors for re-election to the Board of Directors:
Frederick P. Calderone, age 53, has served as a Vice President of CenTra,
Inc. for the past 15 years. CenTra is a transportation holding company
headquartered in Warren, Michigan. Prior to joining CenTra, Mr. Calderone was a
partner with Deloitte, Haskins, & Sells, Certified Public Accountants (now
Deloitte & Touche LLP). Mr. Calderone is a certified public accountant and an
attorney. Mr. Calderone has served as a director of PTSI since May 1998.
Frank L. Conner, age 54, has served as Executive Vice President, Finance
and Accounting and Chief Financial Officer of FedEx Freight East (formerly
American Freightways, Inc.) since February 2001. Mr. Conner previously served as
a Director of American Freightways from 1989 to February 2001 and held various
positions with American Freightways, including serving as Executive Vice
President-Finance and Accounting and Chief Financial Officer from November 1995
to February 2001. Mr. Conner previously served thirteen years with McKesson
Service Merchandise in various positions including General Manager and Chief
Financial Officer. Mr. Conner served seven years in public accounting with Peat,
Marwick & Mitchell prior to joining McKesson. Mr. Conner has served as a
director of PTSI since July 2002. Since September 2003, Mr. Conner has also been
a member of the Board of Directors of First Federal Bancshares of Arkansas, Inc.
Thomas H. Cooke, age 69, was employed by Ford Motor Company for 33 years
and has been retired since 1996. While at Ford, he served in various managerial
capacities, primarily finance and controller executive positions responsible for
financial analysis, financial controls, business plans, budget development,
accounting, and auditing in Ford's Product Development Group, several
manufacturing divisions, an overseas affiliate, and Finance Staff. During his
last three years at Ford, Mr. Cooke served as Global Manager of Customs
Compliance and Analysis in the Transportation and Logistics Office. He holds an
MBA in Finance from the University of California at Berkeley. Mr. Cooke has
served as a director of PTSI since July 2002.
Manuel J. ("Matty") Moroun, 76, is the President and Chief Executive
Officer of CenTra, Inc., a transportation holding company headquartered in
Warren, Michigan. Mr. Moroun has been a principal stockholder and officer of
CenTra and its predecessor companies since 1954, and its Chief Executive Officer
since 1970. CenTra is one of the largest privately held transportation holding
companies in the United States. Mr. Moroun has served as a director of PTSI
since May 2002. Mr. Moroun is the father of Matthew T. Moroun, a director of
PTSI who has been nominated for re-election at the annual meeting.
Matthew T. Moroun, age 31, has served as Vice Chairman and as a director of
CenTra, Inc., a transportation holding company based in Warren, Michigan, since
1993. Beginning in 1994 and up to 1996, Mr. Moroun served as a director and
manager of Liberty Bell Agency, an insurance claims adjustment company. In 1995
Mr. Moroun became and remains the Chairman of the Board of Durarock Reinsurance,
Ltd., a reinsurance company. Since 1996, Mr. Moroun has also served as Chairman
of Oakland Financial Corporation and subsidiaries, an insurance holding company
based in Sterling Heights, Michigan. Mr. Moroun has served as a director of PTSI
since May 1992. Mr. Moroun is the son of Manuel J. Moroun, a director of PTSI
who has been nominated for reelection at the annual meeting.
Daniel C. Sullivan, age 63, has been a practicing attorney, specializing in
transportation law for more than 35 years. Mr. Sullivan has been a principal
with the firm of Sullivan, Hincks & Conway, or its predecessor, presently
located in Oak Brook, Illinois, since 1972. Mr. Sullivan has served as a
director of PTSI since June 1986.
Robert W. Weaver, age 54, is one of our co-founders. He has over 20 years
of experience with our company and has served as our President and Chief
Executive Officer since 1990. Mr. Weaver has served as a director of PTSI since
1990.
Charles F. Wilkins, age 65, retired in January 1995 after 34 years of
employment with Ford Motor Company, and since January 1995 has been
self-employed as a logistics consultant. He served in various positions with
Ford Motor Company in transportation management, including three years of
service as Traffic Manager in Europe. Mr. Wilkins retired from the position of
Director, Transportation and Traffic Office, in which he had served since 1990.
Mr. Wilkins has been a member of the National Motor Carrier Advisory Committee
of the Federal Highway Administration and was previously active in the National
Industrial Transportation League as Chairman of the Audit Committee and Third
Vice Chairman. Mr. Wilkins is currently an associate member of the American
Society of Transportation and Logistics and a member of the Council of Logistics
Management. Mr. Wilkins has served as a director of PTSI since June 1995.
Proxies received will be voted for the director nominees named above,
unless authority to do so is withheld. In the event any nominee is unable or
declines to serve as a director at the time of the meeting, the persons named as
proxies will have discretionary authority to vote the proxies for the election
of such person or
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persons as may be nominated in substitution by the Board of Directors. We are
not aware of any current circumstances which would render any nominee named
above unable to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF THE NOMINEES NAMED ABOVE.
INDEPENDENCE OF DIRECTORS
Rules of the Nasdaq Stock Market require that a majority of the Board of
Directors be independent directors, as defined in Nasdaq Rule 4200(a)(15). In
March of 2004, we reviewed the independence of our directors. During this
review, the Board of Directors considered transactions and relationships between
each director or any member of his or her family, and PTSI and its subsidiaries.
As a result of this review, the Board of Directors has determined that each of
the directors, including those nominated for election at the annual meeting, are
independent under Nasdaq Rule 4200(a)(15), except Mr. Weaver who is not
considered independent because of his employment as an executive officer of
PTSI.
COMMUNICATIONS WITH DIRECTORS AND ATTENDANCE AT ANNUAL MEETINGS
Stockholders may communicate directly with the Board of Directors as a
group, by writing to the Board of Directors, care of the Secretary of PTSI, 297
West Henri DeTonti Boulevard, Tontitown, Arkansas 72770. The Secretary will
review all of the correspondence and regularly forward to the Board of Directors
a summary of the correspondence, and copies of all of the correspondence that,
in his opinion, deals with the functions of the Board of Directors or any of its
committees or that the Secretary otherwise determines requires the attention of
the Board of Directors. Directors may at any time review a log of all of the
correspondence that is addressed to the Board of Directors, and request copies
of any and all of the correspondence.
The Board of Directors has a policy of encouraging members of the Board of
Directors to attend the annual meetings of the stockholders. Seven of our eight
directors attended last year's annual meeting.
COMMITTEES OF THE BOARD AND MEETINGS
Our Board of Directors has the following standing committees:
Audit Committee. The members of the Audit Committee consist of Thomas H.
Cooke (committee chairman), Frank L. Conner, Daniel C. Sullivan and Charles F.
Wilkins. The functions of the Audit Committee are described below under the
heading "Audit Committee Report." The Board of Directors has determined that Mr.
Conner and Mr. Cooke, who are members of the Audit Committee, are each qualified
as an audit committee financial expert as that term is defined in the rules of
the Securities and Exchange Commission. Mr. Conner and Mr. Cooke are
independent, as independence for audit committee members is defined in the
listing standards of the Nasdaq Stock Market and the rules of the Securities and
Exchange Commission. The Audit Committee held five meetings during 2003.
Compensation and Stock Option Committee. The Compensation and Stock Option
Committee consists of Daniel C. Sullivan (committee chairman), Frederick P.
Calderone, Matthew T. Moroun and Charles F. Wilkins. Each member of the
Compensation and Stock Option Committee is independent, as independence for
compensation committee members is defined in the listing standards of the Nasdaq
Stock Market. The Compensation and Stock Option Committee reviews and makes
recommendations to the Board of Directors with respect to compensation of our
executive officers and assists the Board of Directors in the administration of
our stock option and incentive compensation plans. The Compensation and Stock
Option Committee held one meeting during 2003.
Executive Committee. The Executive Committee is composed of Matthew T.
Moroun and Robert W. Weaver. It exercises the authority of the Board of
Directors in accordance with our Bylaws between regular meetings of the Board.
The Executive Committee did not meet during 2003.
The Board of Directors does not have a nominating committee that nominates
candidates for election to the Board of Directors. That function is performed by
the Board of Directors. Each member of the Board
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participates in the consideration of director nominees. The Board of Directors
believes that it can adequately fulfill the functions of a nominating committee
without having to appoint an additional committee to perform that function. The
Board of Directors believes that not having a separate nominating committee
saves the administrative expense that would be incurred in maintaining such a
committee, and saves time for directors who would serve on a nominating
committee if it were established. As there is no nominating committee, we do not
have a nominating committee charter.
At least a majority of our independent directors participate in the initial
consideration of director nominees. These directors are independent, as
independence for nominating committee members is defined in the listing
standards of the Nasdaq Stock Market. After these independent directors discuss
and evaluate potential nominees, they recommend director nominees to the full
Board of Directors for selection.
The Board of Directors will consider as potential nominees persons
recommended by stockholders. Recommendations should be submitted to the Board of
Directors in care of our Secretary, Larry J. Goddard, at our principal executive
office, 297 West Henri DeTonti Boulevard, Tontitown, Arkansas 72770. Each
recommendation should include a personal biography of the suggested nominee, an
indication of the background or experience that qualifies the person for
consideration, and a statement that the person has agreed to serve if nominated
and elected.
The Board of Directors has used an informal process to identify potential
candidates for nomination as directors. Candidates for nomination have been
recommended by an executive officer or director, and considered by the Board of
Directors. Generally, candidates have been known to one or more of the Board
members. The Board of Directors has not adopted specific minimum qualifications
that it believes must be met by a person it recommends for nomination as a
director. In evaluating candidates for nomination, the Board of Directors will
consider the factors it believes to be appropriate, which would generally
include the candidate's independence, personal and professional integrity,
business judgment, relevant experience and skills, including those related to
transportation services, and potential to be an effective director in
conjunction with the rest of the Board of Directors in collectively serving the
long-term interests of our stockholders. Although the Board of Directors has the
authority to retain a search firm to assist it in identifying director
candidates, there has to date been no need to employ a search firm. The Board of
Directors does not evaluate potential nominees for director differently based on
whether they are recommended to the Board of Directors by a stockholder.
During 2003, the Board of Directors held five meetings. Each director
attended at least 75% of the aggregate of all meetings held by the Board of
Directors and by committees of the Board on which the director served during
2003, except Mr. Manuel Moroun, who attended 60% of the meetings.
AUDIT COMMITTEE REPORT
Each member of the Audit Committee is independent, as independence for
audit committee members is defined in the listing standards of the Nasdaq Stock
Market and the rules of the Securities and Exchange Commission. The Audit
Committee's primary purpose is to assist the Board of Directors in overseeing:
- the accounting and financial reporting process;
- audits of financial statements; and
- internal control and audit functions.
In carrying out its responsibilities, the Audit Committee supervises the
relationship between us and our independent auditors, including having direct
responsibility for their appointment, compensation and retention, reviewing the
scope of their audit services, and approving audit and permissible non-audit
services. The Audit Committee reviews and discusses the annual and quarterly
financial statements, and reviews the activities of our internal audit function.
The Board of Directors has adopted a charter for the Audit Committee. A
copy of the charter is set forth in Appendix A to this proxy statement.
4
Management has the primary responsibility for the financial statements and
the reporting process, including our systems of internal controls. In fulfilling
its oversight responsibilities, the Audit Committee reviewed the audited
financial statements for the year ended December 31, 2003 with management,
including a discussion of the quality and the acceptability of our financial
reporting and controls.
The Audit Committee reviewed with the independent auditors, Deloitte &
Touche LLP ("Deloitte & Touche"), who are responsible for expressing an opinion
on the conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality and the acceptability
of our financial reporting and such other matters as are required to be
discussed with the Audit Committee under generally accepted auditing standards,
including the matters required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communications with Audit Committees). In addition, the Audit
Committee has discussed with Deloitte & Touche the auditors' independence from
management and us, including the matters in the auditors' written disclosures
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). The Audit Committee has considered the
compatibility of the provision of non-audit services with maintaining the
auditors' independence.
The Audit Committee also discussed with our internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets periodically with the internal and independent auditors, with
and without management present, to discuss the results of their examinations,
their evaluations of our internal controls, and the overall quality of our
financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
December 31, 2003 for filing with the Securities and Exchange Commission. The
Audit Committee also evaluated and reappointed our independent auditors for
2004.
Audit Committee
Frank L. Conner
Thomas H. Cooke
Daniel C. Sullivan
Charles F. Wilkins
The information in the Audit Committee Report shall not be deemed to be
soliciting material, or be filed with the Securities and Exchange Commission or
subject to Regulation 14A or 14C or to liabilities of Section 18 of the
Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that we specifically incorporate
these paragraphs by reference.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers and persons who own more than 10% of our outstanding
common stock to file with the Securities and Exchange Commission reports of
changes in ownership of our common stock held by such persons. Executive
officers, directors and greater than 10% stockholders are also required to
furnish us with copies of all forms they file under this regulation. To our
knowledge, based solely on a review of the copies of such reports furnished to
us and representations that no other reports were required, during the year
ended December 31, 2003, our officers, directors and 10% stockholders complied
with all Section 16(a) filing requirements applicable to them.
5
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid to or accrued on behalf of each of the named executive
officers for the years ended December 31, 2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION(1)
--------------------------- ---- -------- -------- ------------ ---------------
Robert W. Weaver.................... 2003 $422,500 $ 29,117 0 $3,000
President and Chief Executive 2002 407,500 182,310 120,000 0
Officer, Director 2001 387,500 131,810 0 0
W. Clif Lawson...................... 2003 229,000 15,845 0 2,600
Executive Vice President and 2002 219,000 98,413 90,000 2,600
Chief Operating Officer 2001 204,000 68,930 0 2,550
Larry J. Goddard.................... 2003 185,000 13,204 0 2,787
Vice President of Finance, 2002 175,000 81,278 90,000 2,636
Chief Financial Officer, Secretary 2001 162,500 57,667 0 2,450
and Treasurer
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(1) Represents amounts contributed by PTSI pursuant to its 401(k) Plan.
EMPLOYMENT AGREEMENTS
We entered into a three-year employment contract with Mr. Weaver that
became effective July 1, 2002 upon the expiration of the term of his prior
employment agreement. We also entered into employment agreements with W. Clif
Lawson, our Executive Vice President and Chief Operating Officer, and Larry J.
Goddard, our Vice President of Finance, Chief Financial Officer, Secretary and
Treasurer with terms that commenced January 1, 2002 and end on June 30, 2004 and
December 31, 2004, respectively. Under these employment agreements, each of the
executives receives a minimum annual base salary that increases throughout the
term of his respective agreement. Mr. Weaver's base salary ranges from $415,000
to $445,000, Mr. Lawson's base salary ranges from $214,000 to $234,000, and Mr.
Goddard's base salary ranges from $175,000 to $195,000. The base salaries may be
increased at any time in the sole discretion of the Board of Directors, and the
executives are also entitled to receive discretionary bonuses from time to time
as may be determined by the Board. Each agreement provides that if the executive
is terminated due to medical disability, he will continue to receive his then
current base salary for a period of twelve months, and if the executive is
terminated without cause, he will be entitled to receive all compensation due
under the respective agreement for the remainder of the term of the agreement.
Each agreement contains a three-year confidentiality provision and a one-year
non-competition provision. Each agreement may be extended at the company's
option for an additional one-year period. If the option is exercised, Messrs.
Weaver, Lawson and Goddard will be entitled to annual base salaries during the
extension period of $460,000, $244,000 and $205,000, respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2003, Messrs. Calderone, Matthew Moroun, Sullivan and Wilkins served
as members of the Compensation and Stock Option Committee. Mr. Matthew Moroun, a
member of the Compensation and Stock Option Committee and the Executive
Committee of the Board of Directors, and our largest stockholder, is the
controlling stockholder, Vice Chairman and a director of CenTra, Inc., a
transportation holding company based in Warren, Michigan. During 2003, certain
subsidiaries of CenTra paid us a total of $107,283 for transporting freight and
$24,928 in parts and labor for work performed in our maintenance facilities. We
also made payments to certain subsidiaries of CenTra during 2003 in the
aggregate amount of $484,790. These
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payments related to property leases ($217,635), insurance premiums ($263,955),
and other miscellaneous services or expenses ($3,200); and are more fully
described in the paragraphs below.
Payments were made to Crown Enterprises, Inc. in the amount of $213,534 for
real estate leases. Properties leased from Crown Enterprises, Inc. include
office and maintenance facilities in Oklahoma City, Oklahoma and Effingham,
Illinois and trailer drop yards in eleven states. The leases are generally month
to month leases with automatic monthly renewal provisions.
Property is also leased from Lakeshore Properties that is used for trailer
drop yards. Payments were made to Lakeshore Properties in the amount of $4,100
during 2003 and represent lease payments made in accordance with lease
agreements that contain automatic monthly renewal provisions.
During 2003 payments were made to Cherokee Insurance Company ($30,826) and
Liberty Bell Agency ($168,764). The payments were for insurance premiums paid
pursuant to agreements to provide non-trucking liability coverage (Cherokee
Insurance Company) and physical damage insurance coverage (Liberty Bell Agency)
for a group of our independent contractors. Both the Cherokee Insurance Company
and the Liberty Bell Agency agreements are made directly with the independent
contractors. The company acts only as a sponsor for the programs. The full
amount of payments to Cherokee Insurance Company and Liberty Bell Agency were
recouped from the independent contractors.
We have auto liability coverage with AIG Insurance Company. We retained
Liberty Bell Agency as our third party claims administrator. The TPA agreement
commenced on October 1, 2001, and has been renewed through August 31, 2004. The
auto liability insurance policy has a $2,500 per claim deductible. Liberty Bell
Agency adjusts the claims and pays the claimants the amounts of the settlements.
Liberty Bell Agency invoices us for the claims which fall within the $2,500
deductible. We paid Liberty Bell Agency a total of $64,365 for claims paid by
Liberty Bell Agency under the deductible.
We paid Central Transport International, Inc. $3,200 during 2003 for
transportation services. Transportation services are provided on an as needed
basis and are negotiated in the regular course of our transportation business.
We believe that each of the above transactions was entered into on terms as
favorable to us as could have been obtained from unaffiliated third parties at
the time such transactions were negotiated. We expect to continue transactions
with subsidiaries of CenTra in 2004 that are similar to those described above.
OPTION GRANTS IN 2003
No options were granted to any of our executive officers named in the
Summary Compensation Table during the year ended December 31, 2003.
AGGREGATED STOCK OPTION EXERCISES IN 2003 AND YEAR-END OPTION VALUES
The following table provides information on the exercise of stock options
during the year ended December 31, 2003 by the named executive officers and the
value of unexercised options at December 31, 2003:
NUMBER OF SHARES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
ACQUIRED ON VALUE OPTIONS AT 12/31/03 MONEY OPTIONS AT 12/31/03
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- -------- ------------------------- ----------------------------
Robert W. Weaver............ 0 N/A 54,000/96,000 $0/$0
W. Clif Lawson.............. 0 N/A 18,000/72,000 0/ 0
Larry J. Goddard............ 0 N/A 18,000/72,000 0/ 0
---------------
(1) As of December 31, 2003, none of the options were "in-the-money" as the
exercise price for each of the options exceeded the market value of the
common stock underlying the option.
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COMPENSATION OF DIRECTORS
We currently pay our non-employee directors an annual fee of $8,000 per
year. In addition, such directors are paid a fee of $1,500 per Board of
Directors or committee meeting that they attend in person, and $500 per Board of
Directors or committee meeting that they attend by telephone. When a director
attends more than one meeting on the same day, the director is generally paid
only one meeting fee for the day. We reimburse directors for their expenses in
attending such meetings. A director who is also one of our employees, is not
additionally compensated for service as a member of the Board of Directors.
Pursuant to automatic grant provisions under our 1995 Stock Option Plan, on
March 2 of each year, each non-employee director is granted an option to
purchase 2,000 shares of our common stock at an exercise price equal to the fair
market value of our stock on the date of grant. During 2003, options were
granted for 2,000 shares of common stock to each of Messrs. Calderone, Conner,
Cooke, Manuel Moroun, Matthew Moroun, Sullivan and Wilkins, who are our
non-employee directors. The exercise price under these options is $22.68 per
share.
Notwithstanding anything to the contrary set forth in any of our previous
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that might incorporate future filings, including this proxy statement, in whole
or in part, the following Report of the Compensation and Stock Option Committee
on Executive Compensation and the Stockholder Return Performance Graph shall not
be incorporated by reference into any such filings.
REPORT OF THE COMPENSATION AND STOCK OPTION
COMMITTEE ON EXECUTIVE COMPENSATION
In accordance with the proxy statement rules of the Securities and Exchange
Commission, the Compensation and Stock Option Committee of the Board of the
Directors offers the following report regarding compensation policies for our
executive officers and Chief Executive Officer with respect to compensation paid
to such officers during the last fiscal year.
During 2003, Messrs. Calderone, Matthew Moroun, Sullivan and Wilkins served
as members of the Compensation and Stock Option Committee. Each of them is a
non-employee director of PTSI. It is the Committee's responsibility to review
and make recommendations to the Board of Directors with respect to compensation
of PTSI's officers. In formulating its compensation policies and decisions, the
Committee endeavors to provide a competitive compensation package that enables
PTSI to attract and retain key executives and to integrate compensation programs
with PTSI's annual and long-term business strategies and objectives and focus
executive actions on the fulfillment of the objectives.
PTSI's executive compensation program generally consists of base salary and
annual incentive compensation through a cash bonus plan. Stock options are
utilized in order to align executives' interests more closely with the interests
of stockholders. The amount of such awards, if any, may be determined from time
to time by the Compensation and Stock Option Committee or the Board of
Directors.
Robert W. Weaver, PTSI's President and Chief Executive Officer, is
presently employed pursuant to a three-year employment agreement that became
effective on July 1, 2002. The company has also entered into two and one-half to
three-year employment agreements with its two other executive officers, W. Clif
Lawson, Executive Vice President and Chief Operating Officer, and Larry J.
Goddard, Vice President of Finance, Chief Financial Officer, Secretary and
Treasurer. The terms of these agreements are described above under the caption
"Employment Agreements."
The Board of Directors has adopted an Incentive Compensation Plan covering
substantially all of our office and shop employees, including executive
officers, which allows employees to earn annual bonuses, payable over a
three-year period, based on the operating ratio and revenues of the company. The
Board of Directors believes this program serves as an incentive to all
participating employees (currently approximately 300 employees) to give greater
effort on behalf of the company. During 2003, Messrs. Weaver, Lawson and
8
Goddard accrued bonuses of $29,117, $15,845 and $13,204, respectively, pursuant
to the company's Incentive Compensation Plan.
The Committee believes that the total compensation of the company's
executive officers has been competitive within the industry.
PTSI's future compensation policies will be developed in light of PTSI's
profitability and with the goal of rewarding members of management for their
contributions to the company's success. It is PTSI's intention that the
compensation to be paid to its executive officers will not exceed the present
maximum allowable amount for purposes of deductibility set forth in the Internal
Revenue Code.
Compensation and Stock Option
Committee
Frederick P. Calderone
Matthew T. Moroun
Daniel C. Sullivan
Charles F. Wilkins
9
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on our common stock against the
cumulative total return of the CRSP Total Return Index for the Nasdaq Stock
Market (U.S. companies) and the CRSP Total Return Index for the Nasdaq Trucking
and Transportation Stocks for the period of five years commencing December 31,
1998 and ending December 31, 2003. The graph assumes that the value of the
investment in our common stock and each index was $100 on December 31, 1998.
(PERFORMANCE GRAPH)
--------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
--------------------------------------------------------------------------------------
PTSI $100.00 $123.61 $ 89.23 $140.89 $280.11 $237.62
Nasdaq Stock Market
U.S. $100.00 $185.43 $111.83 $ 88.76 $ 61.37 $ 91.75
Nasdaq Trucking &
Transportation
Stocks $100.00 $ 95.31 $ 86.63 $102.43 $104.32 $149.43
10
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 2, 2004, information concerning
ownership of our common stock by our directors and executive officers, both
individually and as a group, and by each stockholder known by us to be the
beneficial owner of more than 5% of our outstanding common stock.
As of March 2, 2004, there were 11,296,207 shares of our common stock
outstanding. Unless otherwise indicated, each person has sole voting and
investment power with respect to shares shown as beneficially owned by such
person. The number of shares of our common stock beneficially owned by a person
includes shares of common stock issuable with respect to options held by the
person that are exercisable within 60 days of March 2, 2004. The percentage of
our common stock beneficially owned by a person has been calculated as if the
person had exercised all such options the person holds and that no other persons
exercised any options.
SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
---------------- ------------------ --------
Matthew T. Moroun........................................... 4,462,713(1) 39.5%
Robert W. Weaver............................................ 316,428(2) 2.8%
Daniel C. Sullivan.......................................... 26,000(3) *
Charles F. Wilkins.......................................... 10,000(3) *
Frederick P. Calderone...................................... 10,000(3) *
Manuel J. Moroun............................................ 4,000(4) *
Thomas H. Cooke............................................. 4,000(5) *
Frank L. Conner............................................. 5,000(5) *
W. Clif Lawson.............................................. 84,000(6) *
Larry J. Goddard............................................ 72,313(7) *
FMR Corp. .................................................. 1,451,785(8) 12.9%
Neil Gagnon................................................. 691,434(9) 6.1%
Lord, Abbett & Co. ......................................... 590,952(10) 5.2%
TimesSquare Capital Management, Inc. and Cigna
Corporation............................................... 739,789(11) 6.5%
Directors and executive officers as a group (10 persons).... 4,994,454(12) 43.5%
---------------
* Less than 1%.
(1) Includes 1,370,713 shares owned directly, 10,000 shares subject to options
exercisable within 60 days of March 2, 2004, and 3,092,000 shares held in a
trust of which Matthew Moroun is a co-trustee and a beneficiary (the
"Moroun Trust"). Norman E. Harned is co-trustee with Matthew Moroun of the
Moroun Trust and may therefore be deemed to beneficially own the shares
held by the Moroun Trust. The business address of each of Messrs. Moroun
and Harned is 12225 Stephens Road, Warren, Michigan 48091.
(2) Includes 70,000 shares subject to options that are exercisable within 60
days of March 2, 2004.
(3) Includes 10,000 shares subject to options that are exercisable within 60
days of March 2, 2004.
(4) Includes 4,000 shares subject to options that are exercisable within 60
days of March 2, 2004. Does not include the 4,462,713 shares shown in the
table as being beneficially owned by Manuel Moroun's son, Matthew Moroun.
(5) Includes 4,000 shares subject to options that are exercisable within 60
days of March 2, 2004.
(6) Includes 1,500 shares held in a trust of which Mr. Lawson is trustee and
his sister is the trust beneficiary, and 1,500 shares held by Mr. Lawson's
son. Also includes 30,000 shares subject to options that are exercisable
within 60 days of March 2, 2004.
(7) Includes 30,000 shares subject to options that are exercisable within 60
days of March 2, 2004.
(8) Based upon a Schedule 13G dated February 16, 2004 filed by FMR Corp. (and
related parties) which indicates that as of December 31, 2003, it had the
sole power to dispose of 1,451,785 shares, and sole power to vote 181,666
of the shares. The Schedule 13G indicates that 1,129,025 of the shares are
held
11
by the Fidelity Low Price Stock Fund, a registered investment company, for
which FMR Corp. or one of its subsidiaries acts as investment adviser. We
make no representation as to the accuracy or completeness of the
information reported. The address of FMR Corp. is 82 Devonshire Street,
Boston, Massachusetts 02109.
(9) Based upon a Schedule 13G dated February 12, 2004 filed by Neil Gagnon,
which indicates that as of December 31, 2003, he had sole power to vote
233,403 of the shares, shared power to vote 130,830 of the shares, sole
power to dispose of 222,403 of the shares, and shared power to dispose of
469,031 of the shares. We make no representation as to the accuracy or
completeness of the information reported. The address of Neil Gagnon is
1370 Avenue of the Americas, Suite 2002, New York, New York 10019.
(10) Based upon a Schedule 13G dated January 26, 2004 filed by Lord, Abbett & Co
which indicates that they have sole power to vote and dispose of the
shares. We make no representation as to the accuracy or completeness of
information reported. The address of Lord, Abbett & Co. is 90 Hudson
Street, Jersey City, New Jersey 07302.
(11) Based upon a Schedule 13G dated February 11, 2004 filed by TimesSquare
Capital Management, Inc. and Cigna Corporation which indicates that as of
December 31, 2003, they had shared power to dispose of 739,789 shares and
shared power to vote 673,289 of the shares. We make no representation as to
the accuracy or completeness of the information reported. The address of
TimesSquare Capital Management, Inc. is Four Times Square, 25th Floor, New
York, NY 10036. The address of Cigna Corporation is One Liberty Place,
Philadelphia, Pennsylvania 19192.
(12) Includes 182,000 shares subject to options that are exercisable within 60
days of March 2, 2004.
INDEPENDENT PUBLIC ACCOUNTANTS
SELECTION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has selected Deloitte &
Touche as our principal independent auditors for the year ending December 31,
2004. Representatives of Deloitte & Touche do not plan to attend the annual
meeting of stockholders.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table shows the fees for professional services of Deloitte &
Touche for audit and other services they provided to us for 2003 and 2002.
2003 2002
-------- -------
Audit Fees(1)............................................... $122,381 $94,935
Audit-Related Fees(2)....................................... 14,066 900
Tax Fees(3)................................................. 7,950 625
All other fees.............................................. 0 0
---------------
(1) Includes the aggregate fees billed for professional services rendered by
Deloitte & Touche for 2003 and 2002 for the audit of our annual financial
statements and review of financial statements included in our quarterly
reports on Form 10-Q.
(2) Principally consisted of fees associated with the audit of the financial
statements of certain employee benefit plans.
(3) Principally consisted of tax consultation and tax compliance services with
respect to Federal and state taxes and certain employee benefit plans.
The Audit Committee pre-approves audit services and non-audit services that
are to be performed for us by our independent auditors. The Audit Committee has
delegated authority to its chairman, or if he is unavailable, another member of
the Audit Committee, to approve, between meetings of the Audit Committee,
permissible non-audit services. Approvals between meetings are required to be
reported to the Audit
12
Committee at its next meeting. In addition to there being engagement letters for
audit services, the Audit Committee has determined that there should be an
engagement letter for any non-audit services that are to be performed by the
independent auditors. For 2003, the Audit Committee approved the performance
from time to time of up to $100,000 of the following permitted non-audit
services: attestation services relating to the attestation of management's
assertion regarding internal controls, employee benefit plan audits, tax
services, consultations on accounting and reporting matters, and services
reasonably related to any of such services that are not prohibited by law. The
authority to approve payment for these non-audit services in an amount
aggregating up to $100,000 was delegated by the Audit Committee to each of our
Chief Executive Officer, Chief Financial Officer and Controller; with the Audit
Committee or Chairman of the Audit Committee to determine payment amounts with
the independent auditors if the officers and the independent auditors do not
reach an agreement on the amount. For 2003, all of the services described in the
table above were pre-approved by the Audit Committee, and the authority
delegated to officers was not used. Pre-approval was not required for 2002.
CHANGE OF ACCOUNTANTS
On July 9, 2002, we dismissed our independent auditors, Arthur Andersen
LLP, and on the same date engaged Deloitte & Touche as our independent auditors
for the fiscal year ending December 31, 2002. Each of these actions was approved
by the Audit Committee of our Board of Directors.
Arthur Andersen LLP audited our financial statements for the fiscal year
ended December 31, 2001 and for the fiscal year ended December 31, 2000. Neither
of the audit reports of Arthur Andersen LLP for those years contained any
adverse opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope, or accounting principles. In connection with the
audits for the fiscal years ended December 31, 2001 and 2000 and for the
unaudited interim period ended March 31, 2002, there were no disagreements with
Arthur Andersen LLP on any matter of accounting principle or practice, financial
statement disclosure, or audit procedure or scope which disagreement, if not
resolved to the satisfaction of Arthur Andersen LLP, would have caused it to
make reference to the subject matter of the disagreement in its report.
Further, prior to the engagement of Deloitte & Touche, neither we nor any
of our representatives sought the advice of Deloitte & Touche regarding the
application of accounting principles to a specific completed or contemplated
transaction or the type of audit opinion that might be rendered on our financial
statements, which advice was an important factor considered by us in reaching a
decision as to the accounting, auditing or financial reporting issue.
In connection with the audit of the fiscal year ended December 31, 2001 and
for the unaudited interim period ended March 31, 2002, Arthur Andersen LLP did
not advise the company that:
(i) internal controls necessary for us to develop reliable financial
statements did not exist;
(ii) information had come to its attention that led it to no longer be
able to rely on management's representations, or that made it unwilling to
be associated with the financial statements prepared by management;
(iii) there existed a need to expand significantly the scope of its
audit, or that information had come to its attention that if further
investigated might materially impact the fairness or reliability of either:
a previously issued audit report or the underlying financial statements, or
the financial statements issued or to be issued covering the fiscal period
subsequent to the date of the most recent financial statements covered by
an audit report (including information that might prevent it from rendering
an unqualified audit report on those financial statements).
We requested that Arthur Andersen LLP furnish us with a letter addressed to
the Securities and Exchange Commission stating whether it agrees with the above
statements. We made reasonable efforts to obtain such letter and have not
obtained any letter from Arthur Andersen LLP.
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain transactions between us and subsidiaries of CenTra, Inc., a
corporation controlled by Manuel Moroun, who is a member of our Board of
Directors, and his son, Matthew Moroun, who is our largest stockholder, and a
member of our Board of Directors, are described above under the caption
"Compensation Committee Interlocks and Insider Participation."
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Additional information concerning us, including our financial statements,
is provided in our 2003 Annual Report to Stockholders that accompanies this
proxy statement. Our Annual Report on Form 10-K for the year ended December 31,
2003, as filed with the Securities and Exchange Commission, is available to
stockholders who make a written request for it to our Secretary, Larry J.
Goddard, at our principal executive office, 297 West Henri DeTonti Boulevard,
Tontitown, Arkansas 72770. Copies of exhibits filed with that report or
referenced in it will be furnished to stockholders of record upon request and
payment of our expenses in furnishing such documents.
STOCKHOLDER PROPOSALS
Any proposal to be presented at the 2005 annual meeting of stockholders
must be received at our principal executive office not later than December 21,
2004, directed to the attention of the Secretary, for consideration for
inclusion in our proxy statement and form of proxy relating to that meeting. Any
such proposals must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
In connection with our annual meeting of stockholders to be held in 2005,
if we do not receive notice of a matter or proposal to be considered by March 6,
2005, then the persons appointed by the Board of Directors to act as the proxies
for such annual meeting (named in the form of proxy) will be allowed to use
their discretionary voting authority with respect to any such matter or proposal
at the annual meeting, if such matter or proposal is properly raised at the
annual meeting and put to a vote.
OTHER MATTERS
We do not know of any matters to be brought before the meeting other than
those described in this proxy statement. If any other matter properly comes
before the meeting, the persons designated as proxies will vote on each such
matter in accordance with their best judgment.
By Order of the Board of Directors
/s/ Robert W. Weaver
ROBERT W. WEAVER
President and Chief Executive Officer
April 20, 2004
14
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF P.A.M. TRANSPORTATION SERVICES, INC.
I. PURPOSE
The Audit Committee is established by the Board of Directors for the
primary purpose of assisting the Board in overseeing the accounting and
financial reporting process of the Company, the audits of the Company's
financial statements, and internal control and audit functions.
The Audit Committee serves a board level oversight role where it oversees
the relationship with the independent auditor, as set forth in this Charter. The
Audit Committee should provide an open avenue of communication among the
independent auditor, financial and senior management, the internal auditing
function, and the Board of Directors.
The Audit Committee has the authority to obtain advice and assistance from
outside legal, accounting, or other advisers as it deems appropriate to perform
its duties and responsibilities.
The Company shall provide appropriate funding, as determined by the Audit
Committee, for compensation to the independent auditor and to any advisers that
the audit committee chooses to engage.
The Audit Committee will primarily fulfill its responsibilities by carrying
out the activities listed in Section III of this Charter. The Audit Committee
will report to the Board of Directors periodically regarding the performance of
its duties.
II. COMPOSITION AND MEETINGS
COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be an "independent director" for
purposes of Audit Committee membership in accordance with the rules of The
Nasdaq Stock Market and any other applicable legal or regulatory requirements.
Each member of the Audit Committee shall be free from any relationship
(including disallowed compensatory arrangements) that, in the opinion of the
Board, would interfere with the exercise of his or her independent judgment as a
member of the Audit Committee. Each member of the Audit Committee shall be able
to read and understand fundamental financial statements, including a company's
balance sheet, income statement and cash flow statement, and have a working
familiarity with basic finance and accounting practices.
The Board shall determine whether at least one member of the Audit
Committee qualifies as an "audit committee financial expert" in compliance with
the criteria established by the Securities and Exchange Commission ("SEC") and
any other applicable regulatory requirement. The existence of such member,
including his or her name and whether or not he or she is independent, shall be
disclosed in periodic filings as required by the SEC.
APPOINTMENT AND REMOVAL
The members of the Audit Committee shall be designated by the Board of
Directors annually and shall serve until such member's successor is duly
designated or until such member's earlier resignation or removal. Any member of
the Audit Committee may be removed, with or without cause, by a majority vote of
the Board.
Unless a chairperson is elected by the full Board, the members of the Audit
Committee may designate a chairperson by majority vote of the full Audit
Committee membership. The chairperson shall chair the meetings of the Audit
Committee that he or she attends, and may set the agenda for the meetings of the
Audit Committee.
A-1
MEETINGS
The Audit Committee shall ordinarily meet at least four times annually, or
more frequently as circumstances dictate. Any member of the Audit Committee may
call a meeting of the Audit Committee. The Audit Committee shall meet in
executive session, absent members of management, at least twice a year, and on
such terms and conditions as the Audit Committee may elect. Such executive
sessions may be held in conjunction with regular meetings of the Audit
Committee. The Audit Committee should meet periodically with management, the
director of the internal auditing function and the independent auditor in
separate executive sessions to discuss any matters that the Audit Committee or
each of these groups believe should be discussed privately.
III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS, REPORTS, AND ACCOUNTING INFORMATION REVIEW
1. Review this Charter at least annually and recommend to the Board of
Directors any changes to this Charter that the Audit Committee considers
necessary or appropriate.
2. Review and discuss with management the Company's annual financial
statements, quarterly financial statements, and internal controls reports (or
summaries of the reports). Review relevant reports rendered by the independent
auditor (or summaries of the reports).
3. Recommend to the Board whether the financial statements should be
included in the Annual Report on Form 10-K. Review with financial management and
the independent auditor each Quarterly Report on Form 10-Q prior to its filing.
4. Review, or have a member of the Audit Committee review, earnings press
releases with management, including review of "pro-forma" or "adjusted" non-GAAP
information.
INDEPENDENT AUDITOR
5. Have the authority and direct responsibility to select, evaluate,
determine compensation of, and where appropriate, replace the independent
auditor. The independent auditor shall report directly to the Audit Committee.
The Audit Committee shall review the performance of the independent auditor at
least annually and make determinations regarding the appointment or termination
of the independent auditor. The Audit Committee shall oversee the resolution of
disagreements between management and the independent auditor in the event that
they arise.
6. Review with the independent auditor any problems or difficulties that
the independent auditor brings to the attention of the Audit Committee, and
management's response. Review the independent auditor's attestation and report
on management's internal control report for periods that such attestation or
report are required. Hold discussions at which the independent auditor may
discuss with the Audit Committee the following:
- all critical accounting policies and practices;
- all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with management,
ramifications of the use of such alternative disclosures and treatments,
and the treatment preferred by the independent auditor;
- other material written communications between the independent auditor and
management including, but not limited to, the management letter and
schedule of unadjusted differences; and
- an analysis of the auditor's judgment as to the quality of the Company's
accounting principles, setting forth significant reporting issues and
judgments made in connection with the preparation of the financial
statements.
A-2
7. At least annually, obtain and review a report by the independent auditor
describing:
- the firm's internal quality control procedures;
- any material issues raised by the most recent internal quality-control
review, peer review, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the firm, and any steps
taken to deal with any such issues; and
- all relationships between the independent auditor and the Company to
assess the auditor's independence.
8. Review and preapprove both audit and nonaudit services to be provided by
the independent auditor (other than with respect to de minimis exceptions
permitted by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one
or more designated members of the Audit Committee with any such preapproval
reported to the Audit Committee at its next regularly scheduled meeting. To the
extent required by the rules of The Nasdaq Stock Market or any other applicable
legal or regulatory requirements, approval of nonaudit services shall be
disclosed to investors in periodic reports required by Section 13(a) of the
Securities Exchange Act of 1934. On an annual basis, review and discuss with the
independent auditor all significant relationships the auditor has the with the
Company to determine the auditor's independence. The Audit Committee shall
consider whether the auditor's performance of permissible nonaudit services is
compatible with the auditor's independence.
RELATED PARTY TRANSACTIONS AND COMPLAINT PROCEDURES
9. Review and approve related party transactions to the extent required by
applicable rules of The Nasdaq Stock Market.
10. Establish and maintain procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting, or auditing
matters.
11. Establish and maintain procedures for the confidential, anonymous
submission by Company employees of concerns regarding questionable accounting or
auditing matters.
INTERNAL AUDIT
12. Review and advise on the selection and removal of the internal audit
manager.
13. Review activities and qualifications of the internal audit function.
ETHICAL COMPLIANCE
14. Establish, review and update as the Audit Committee deems necessary or
appropriate a code of ethics for the principal executive officer and senior
financial personnel of the Company in accordance with applicable law, rules and
regulations.
OTHER RESPONSIBILITIES
15. Prepare the report of the Audit Committee that the SEC requires be
included in the Company's annual proxy statement.
16. Annually, perform a self-assessment relative to the Audit Committee's
purpose, duties and responsibilities.
As approved by the Board of Directors on 3/12/04
A-3
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
P.A.M. TRANSPORTATION SERVICES, INC.
The undersigned stockholder(s) of P.A.M. Transportation Services, Inc., a
Delaware corporation, hereby appoints Robert W. Weaver and Larry J. Goddard, and
each of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2004 Annual Meeting of Stockholders of P.A.M. Transportation
Services, Inc. to be held on Thursday, May 20, 2004, and at any or all
adjournments or postponements of the meeting, and to vote all shares of common
stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:
(1) To elect eight directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified:
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
below (except as vote for all nominees
otherwise indicated
below)
Frederick P. Calderone; Frank L. Conner; Thomas H. Cooke; Manuel J. Moroun;
Matthew T. Moroun; Daniel C. Sullivan; Robert W. Weaver; and Charles F. Wilkins
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE
THE NAME(S) ON THE LINE BELOW:
--------------------------------------------------------------------------------
(2) In their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment or postponement of
the meeting.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This proxy, when
properly executed, will be voted in accordance with directions given by the
undersigned stockholder(s). If no direction is made, it will be voted FOR the
election of the nominees for director named above, and as the proxies deem
advisable on such other matters as may come before the meeting.
Dated: ,2004
---------------------
--------------------------------------------
Signature
--------------------------------------------
Signature
This Proxy should be marked, dated,
and signed by the stockholder(s)
exactly as his or her name appears
hereon, and returned promptly in the
enclosed envelope. Persons signing in
a fiduciary capacity should so
indicate. If shares are held by joint
tenants or as community property, both
should sign.