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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HUB GROUP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HUB GROUP, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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 fee is calculated and state how it is
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:
April 12, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of Hub Group, Inc. This meeting will be held in Room 226 in the
Hamburger University building on the McDonald's Office Campus at 2715 Jorie
Boulevard, Oak Brook, Illinois at 10:00 a.m. Chicago time on Tuesday, May 15,
2001.
The attached Notice of 2001 Annual Meeting of Stockholders and Proxy
Statement describe the matters to be acted upon. The Annual Report to
Stockholders is also enclosed.
We hope you will be able to attend the meeting. However, even if you
anticipate attending in person, we urge you to mark, sign, date, and return the
enclosed proxy card to ensure that your shares will be represented. If you
attend, you will, of course, be entitled to vote in person.
Sincerely,
PHILLIP C. YEAGER
Chairman
HUB GROUP, INC.
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Hub Group, Inc.:
The Annual Meeting of Stockholders of Hub Group, Inc., a Delaware
corporation (the "Company"), will be held in Room 226 in the Hamburger
University building on the McDonald's Office Campus at 2715 Jorie Boulevard, Oak
Brook, Illinois on Tuesday, May 15, 2001, at 10:00 a.m., Chicago time, for the
following purposes:
(1) To elect six directors of the Company to hold office until the
next annual meeting of stockholders; and
(2) To transact such other business as may properly be presented
at the Annual Meeting or any adjournment thereof.
A proxy statement with respect to the Annual Meeting accompanies and
forms a part of this Notice. The Company's Annual Report to Stockholders also
accompanies this Notice.
The Board of Directors has fixed the close of business on March 30,
2001, as the record date for determining stockholders entitled to notice of, and
to vote at, the Annual Meeting.
By order of the Board of Directors,
DAVID C. ZEILSTRA
Vice President, Secretary and General Counsel
Lombard, Illinois
April 12, 2001
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
HUB GROUP, INC.
377 E. BUTTERFIELD ROAD, SUITE 700
LOMBARD, ILLINOIS 60148
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Hub Group, Inc., a Delaware corporation ("Hub
Group" or the "Company"), of proxies for use at the 2001 Annual Meeting of
Stockholders of the Company to be held on Tuesday, May 15, 2001, and any
adjournment thereof (the "Annual Meeting"). This Proxy Statement and
accompanying form of proxy are first being sent to stockholders on or about
April 12, 2001.
The Company's Class A common stock, $.01 par value (the "Class A Common
Stock"), and the Class B common stock, $.01 par value (the "Class B Common
Stock," together with the Class A Common Stock, the "Common Stock"), are the
only issued and outstanding classes of stock. Only stockholders of record at the
close of business on March 30, 2001 (the "Record Date"), are entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, the Company had
7,046,050 shares of Class A Common Stock (each a "Class A Share") and 662,296
shares of Class B Common Stock (each a "Class B Share," and collectively with
the Class A Shares, the "Shares") outstanding and entitled to vote.
VOTING RIGHTS AND PROCEDURES
Shares represented by an effective proxy given by a stockholder will be
voted as directed by the stockholder. If a properly signed proxy form is
returned to the Company and one or more proposals are not marked, it will be
voted in accordance with the recommendation of the Board of Directors on all
such proposals. A stockholder giving a proxy may revoke it at any time prior to
the voting of the proxy by giving written notice to the Secretary of the
Company, by executing a later dated proxy or by attending the Annual Meeting and
voting in person.
Each Class A Share is entitled to one (1) vote and each Class B Share
is entitled to twenty (20) votes. The holders of Shares having a majority of the
votes which could be cast by the holders of all Shares, present in person or
represented by proxy, will constitute a quorum at the Annual Meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the presence of a quorum. If a broker indicates on the
proxy that it does not have discretionary authority as to certain Shares to vote
on a particular matter, those Shares will be considered as present and entitled
to vote for purposes of determining the presence of a quorum. The Yeager family
members own all 662,296 shares of Class B Common Stock and 741,800 shares of
Class A Common Stock. Consequently, the Yeager family controls approximately 69%
of the voting power of the Company on all matters presented for stockholder
action. The Yeager family members are parties to a stockholders' agreement,
pursuant to which they have agreed to vote all of their shares of Class B Common
Stock in accordance with the vote of the holders of a majority of such shares.
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the election inspectors appointed for the meeting and such election
inspectors will determine whether or not a quorum is present.
The Board of Directors knows of no matters to be presented at the
Annual Meeting other than those set forth in the Notice of 2001 Annual Meeting
of Stockholders enclosed herewith. However, if any other matters do come before
the meeting, it is intended that the holders of the proxies will vote thereon in
their discretion. Any such other matter will require for its approval the
affirmative vote of the holders of Shares having a majority of the votes present
in person or represented by proxy at the Annual Meeting, provided a quorum is
present, or such greater vote as may be required under the Company's Certificate
of Incorporation, the Company's By-laws or applicable law. A list of
stockholders as of the record date will be available for inspection at the
Annual Meeting and for a period of ten days prior to the Annual Meeting at the
Company's offices in Lombard.
ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board of
Directors under Article III of the Company's By-laws, is currently six. Each
director holds office until his or her successor is elected and qualified or
until his or her earlier death, resignation, retirement, disqualification or
removal.
The nominees for whom the enclosed proxy is intended to be voted are
set forth below. Each nominee for election as director currently serves as a
director of the Company. It is not contemplated that any of these nominees will
be unavailable for election, but if such a situation should arise, the proxy
will be voted in accordance with the best judgment of the proxyholder for such
person or persons as may be designated by the Board of Directors unless the
stockholder has directed otherwise.
Directors are elected by a plurality of the votes cast at the Annual
Meeting, provided a quorum is present. The outcome of the election is not
affected by abstentions or the withholding of authority to vote in the election,
or by broker non-votes. Stockholders are not allowed to cumulate their votes in
the election of directors.
If a stockholder desires to nominate persons for election as directors
at the next Annual Meeting of Stockholders written notice of such stockholder's
intent to make such a nomination must be given and received by the Secretary of
the Company at the principal executive offices of the Company either by personal
delivery or by United States mail no earlier than February 14, 2002 nor later
than March 16, 2002. Each notice must describe the nomination in sufficient
detail for the nomination to be summarized on the agenda for the meeting and
must set forth: (i) the name and address, as it appears on the books of the
Company, of the stockholder making the nomination, (ii) a representation that
the stockholder is a holder of record of stock in the Company entitled to vote
at the annual meeting of stockholders and intends to appear in person or by
proxy at the meeting to present the nomination, (iii) a statement of the class
and number of shares beneficially owned by the stockholder, (iv) the name and
address of any person to be nominated, (v) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder, (vi) such other information
regarding such nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission (the "Commission"), and (vii) the consent of
such nominee to serve as a director of the Company if elected. The presiding
officer of the annual meeting of stockholders will, if the facts warrant, refuse
to acknowledge a nomination not made in compliance with the foregoing procedure,
and any such nomination not properly brought before the meeting will not be
considered.
2
NOMINEES FOR ELECTION AS DIRECTORS
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
NAME AGE AND OTHER INFORMATION
Phillip C. Yeager 73 Phillip C. Yeager has been Chairman of the
Board since October 1985. From April 1971 to
October 1985, Mr. Yeager served as President
of Hub City Terminals, Inc. ("Hub Chicago").
Mr. Yeager became involved in intermodal
transportation in 1959, five years after the
introduction of intermodal transportation in
the United States, as an employee of the
Pennsylvania and Pennsylvania Central
Railroads. He spent 19 years with the
Pennsylvania and Pennsylvania Central
Railroads, 12 of which involved intermodal
transportation. In 1991, Mr. Yeager was named
the Man of the Year by the Intermodal
Transportation Association. In 1995, he
received the Salzburg Practitioners Award from
Syracuse University in recognition of his
lifetime achievements in the transportation
industry. In October 1996, Mr. Yeager was
inducted into the Chicago Area
Entrepreneurship Hall of Fame sponsored by the
University of Illinois at Chicago. In March
1997, he received the Presidential Medal from
Dowling College for his achievements in
transportation services. In September 1998 he
received the Silver Kingpin award from the
Intermodal Association of North America and in
February 1999 he was named Transportation
Person of the Year by the New York Traffic
Club. Mr. Yeager graduated from the
University of Cincinnati in 1951 with a
Bachelor of Arts degree in Economics.
Mr. Yeager is the father of David P. Yeager,
Vice Chairman and Chief Executive Officer and
Mark A. Yeager, President - Field Operations.
David P. Yeager 48 David P. Yeager has served as the Company's
Vice Chairman of the Board since January 1992
and as Chief Executive Officer of the Company
since March 1995. From October 1985 through
December 1991, Mr. Yeager was President of Hub
Chicago. From 1983 to October 1985, he served
as Vice President, Marketing of Hub Chicago.
Mr. Yeager founded the St. Louis Hub in 1980
and served as its President from 1980 to 1983.
Mr. Yeager founded the Pittsburgh Hub in 1975
and served as its President from 1975 to 1977.
Mr. Yeager received a Masters in Business
Administration degree from the University of
Chicago in 1987 and a Bachelor of Arts degree
from the University of Dayton in 1975.
Mr. Yeager is the son of Phillip C. Yeager and
the brother of Mark A. Yeager.
Thomas L. Hardin 55 Thomas L. Hardin has served as the Company's
President since October 1985 and has served as
Chief Operating Officer and a director of the
Company since March 1995. From January 1980 to
September 1985, Mr. Hardin was Vice
President-Operations and from June 1972 to
December 1979, he was General Manager of the
Company. Prior to joining the Company,
Mr. Hardin worked for the Missouri Pacific
Railroad where he held various marketing and
pricing positions. Mr. Hardin is the former
Chairman of the Intermodal Association of
North America.
3
Gary D. Eppen 64 Gary D. Eppen has served as a director of the
Company since February 1996. Having served as
a Professor of Industrial Administration in
the Graduate School of Business at The
University of Chicago since 1964, Mr. Eppen is
currently the Ralph and Dorothy Keller
Distinguished Service Professor of Operations
Management and Deputy Dean for part-time
programs. He received a Ph.D. in Operations
Research from Cornell University in 1964, a
Master of Science in Industrial Engineering
from the University of Minnesota in 1960, a
Bachelor of Science from the University of
Minnesota in 1959 and an Associate in Arts
degree in Pre-Engineering from Austin Junior
College in 1956. Mr. Eppen also serves as a
director of Landauer, Inc.
Charles R. Reaves 62 Charles R. Reaves has served as a director of
the Company since February 1996. Since 1994,
Mr. Reaves has been President and Chief
Executive Officer of Reaves Enterprises, Inc.,
a real estate development company. From April
1962 until November 1994, Mr. Reaves worked
for Sears Roebuck & Company in various
positions, most recently as President and
Chief Executive Officer of Sears Logistics
Services, Inc., a transportation, distribution
and home delivery subsidiary of Sears
Roebuck & Company. Mr. Reaves received a
Bachelor of Science degree in Business
Administration from Arkansas State University
in 1961.
Martin P. Slark 46 Martin P. Slark has served as a director of
the Company since February 1996. Since 1976,
Mr. Slark has been employed by Molex
Incorporated ("Molex"), a manufacturer of
electronic, electrical and fiber optic
interconnection products and systems. Having
worked for Molex in Europe, the United States
and Asia, Mr. Slark is presently a Director
and an Executive Vice President of Molex.
Mr. Slark is a fellow of the British Institute
of Management and received a Masters in
Business Administration degree from the London
Business School in 1993, a Post-Graduate
Diploma in Management Studies from Portmouth
University and a Bachelors of Science degree
in Engineering from Reading University in
1977.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has both an Audit Committee and a Compensation
Committee. The Board of Directors does not have a Nominating Committee. During
the fiscal year ended December 31, 2000, the full Board of Directors met four
times, the Audit Committee met twice and the Compensation Committee met twice.
During 2000, all directors attended at least 75% of the meetings of the Board of
Directors and the committees thereof on which they served.
The duties of the Audit Committee are to oversee the Company's internal
control structure; review the Company's financial statements and other financial
information to be included in the Company's 10-K and annual report to
stockholders; select the independent auditors for the Company and its
subsidiaries; and review the Company's annual audit plan. The members of the
Audit Committee are Messrs. Eppen, Reaves and Slark.
The duties of the Compensation Committee are to determine the
compensation of the Company's Chief Executive Officer and to make
recommendations to the Board of Directors concerning the salaries of the
Company's other officers; to exercise the authority of the Board of Directors
concerning the Company's 1996 Long-Term Incentive Plan, 1997 Long-Term Incentive
Plan and 1999 Long-Term Incentive Plan; and to advise the Board of Directors on
other compensation and benefit matters. The members of the Compensation
Committee are Messrs. Eppen, Reaves and Slark.
4
OWNERSHIP OF THE CAPITAL STOCK OF THE COMPANY
The following table sets forth information with respect to the number
of shares of Class A Common Stock and Class B Common Stock beneficially owned by
(i) each director of the Company, (ii) the executive officers of the Company
named in the table under "Compensation of Directors and Executive
Officers--Summary Compensation Table," (iii) all directors and executive
officers of the Company as a group, and (iv) based on information available to
the Company and a review of statements filed with the Commission pursuant to
Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), each person that owns beneficially (directly or together with
affiliates) more than 5% of the Class A Common Stock or Class B Common Stock, in
each case as of March 30, 2001, except as otherwise noted. The Company believes
that each individual or entity named has sole investment and voting power with
respect to shares of the Class A Common Stock or Class B Common Stock indicated
as beneficially owned by them, except as otherwise noted.
NUMBER (1)
--------------------------
NAME CLASS A CLASS B PERCENTAGE(2)
- ------------------------------------------------------------------ ---------- --------- -------------
Phillip C. Yeager(3)(4)........................................... 134,825 662,296 10.3%
David P. Yeager(3)(5)............................................. 316,975 662,296 12.6%
Thomas L. Hardin(6)............................................... 58,000 -- *
Donald G. Maltby(7)............................................... 7,150 -- *
Daniel L. Sellers(8).............................................. 26,000 -- *
Mark A. Yeager(3)(9).............................................. 335,675 662,296 12.9%
Gary D. Eppen(10)................................................. 17,000 -- *
Charles R. Reaves(10)............................................. 16,000 -- *
Martin P. Slark(11)............................................... 16,000 -- *
All directors and executive officers as a group (13 persons)(12) . 995,925 662,296 20.7%
Debra A. Jensen(3)(13)............................................ 71,825 662,296 9.5%
T. Rowe Price Associates, Inc.(14)................................ 472,900 -- 6.1%
Tweedy, Browne Company LLC(15).................................... 737,236 -- 9.6%
Dimensional Fund Advisors, Inc.(16)............................... 471,500 -- 6.1%
Capital Group International, Inc./ Capital Guardian Trust
Company(17)..................................................... 916,300 -- 11.9%
Liberty Wanger Asset Management, L.P./ WAM Acquisition,
GP, Inc./Liberty Acorn Trust(18)................................ 1,416,300 -- 18.4%
- ---------------------------
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Calculated pursuant to Rule 13d-3(d) under the Exchange Act. Under Rule
13d-3(d), shares not outstanding which are subject to options,
warrants, rights, or conversion privileges exercisable within 60 days
are deemed outstanding for the purpose of calculating the number and
percentage owned by such person, but not deemed outstanding for the
purpose of calculating the percentage owned by each other person
listed.
(2) Represents percentage of total number of outstanding shares of Class A
Common Stock and Class B Common Stock.
5
(3) The Yeager family members are parties to a stockholders' agreement (the
"Yeager Family Stockholder Agreement"), pursuant to which they have
agreed to vote all of their shares of Class B Common Stock in
accordance with the vote of the holders of a majority of such shares.
Except as provided in footnotes 5 and 9, each of the Yeager family
members disclaims beneficial ownership of the shares of Class B Common
Stock held by the other Yeager family members. The Class B Common Stock
represents approximately 65% of the total votes allocable to the Common
Stock. Members of the Yeager family own all of the Class B Common
Stock.
(4) Includes 563,934 shares of Class B Common Stock as to which Phillip C.
Yeager may be deemed to have shared voting discretion pursuant to the
Yeager Family Stockholder Agreement. See Note 3. Also includes 53,000
shares of Class A Common Stock issuable upon exercise of options.
(5) Includes 46,794 shares of Class B Common Stock owned by the Laura C.
Yeager 1994 GST Trust, 46,794 shares of Class B Common Stock owned by
the Matthew D. Yeager 1994 GST Trust and 46,794 shares of Class B
Common Stock owned by the Phillip D. Yeager 1994 GST Trust, for which
David P. Yeager serves as sole trustee and has sole investment and
voting discretion and 419,127 shares of Class B Common Stock as to
which David P. Yeager may be deemed to have shared voting discretion
pursuant to the Yeager Family Stockholder Agreement. See Note 3. Also
includes 38,000 shares of Class A Common Stock issuable upon exercise
of options.
(6) Includes 38,000 shares of Class A Common Stock issuable upon exercise
of options.
(7) Includes 5,000 shares of Class A Common Stock issuable upon exercise
of options.
(8) Includes 26,000 shares of Class A Common Stock issuable upon exercise
of options.
(9) Includes 43,758 shares of Class A Common Stock and 36,794 shares of
Class B Common Stock owned by the Alexander B. Yeager 1994 GST Trust
and 43,758 shares of Class A Common Stock and 36,794 shares of Class B
Common Stock owned by the Samantha N. Yeager 1994 GST Trust, for which
Mark A. Yeager serves as sole trustee and has sole investment and
voting discretion and 501,914 shares of Class B Common Stock as to
which Mark A. Yeager may be deemed to have shared voting discretion
pursuant to the Yeager Family Stockholder Agreement. See Note 3. Also
includes 26,500 shares of Class A Common Stock issuable upon exercise
of options.
(10) Includes 16,000 shares of Class A Common Stock issuable upon exercise
of options.
(11) Includes 12,000 shares of Class A Common Stock issuable upon exercise
of options.
(12) Includes 293,800 shares of Class A Common Stock issuable upon exercise
of options.
(13) Includes 25,000 shares of Class B Common Stock owned by the Elizabeth
A. Jensen 1994 GST Trust and 25,000 shares of Class B Common Stock
owned by the Patrick R. Jensen 1994 GST Trust and 501,913 shares of
Class B Common Stock as to which Debra Jensen may be deemed to have
shared voting discretion pursuant to the Yeager Family Stockholder
Agreement. See Note 3. Debra Jensen is the daughter of Phillip C.
Yeager.
(14) T. Rowe Price Associates, Inc. ("Price") filed a Schedule 13G with the
Commission indicating beneficial ownership of shares of Class A Common
Stock. According to the Schedule 13G, Price has sole dispositive power
with respect to all 472,900 shares of Class A Common Stock beneficially
owned and sole voting power with respect to 76,300 shares of Class A
Common Stock beneficially owned. These securities are owned by various
individual and institutional investors which Price serves as investment
advisor with power to direct investments and/or sole power to vote the
securities. For purposes of the Exchange Act, Price is deemed the
beneficial owner of such securities; however, Price expressly disclaims
that it is, in fact, the beneficial owner of such securities. The
number of shares beneficially owned by Price is indicated as of
February 14, 2001. The address of Price is 100 E. Pratt Street,
Baltimore, MD 21202.
(15) Tweedy, Browne Company LLC ("TBC") filed a Schedule 13G with the
Commission indicating beneficial ownership of shares of Class A Common
Stock. According to the Schedule 13G, TBC has sole dispositive power
with respect to all 737,236 shares of Class A Common Stock beneficially
owned and sole voting power with respect to 735,636 shares of Class A
Common Stock beneficially owned. The number of shares beneficially
owned by TBC is indicated as of February 28, 2001. The address of TBC
is 350 Park Avenue, New York, NY 10022.
6
(16) Dimensional Fund Advisors, Inc. ("Dimensional") filed a Schedule 13G
with the Commission indicating beneficial ownership of shares of Class
A Common Stock. According to the Schedule 13G, Dimensional has sole
dispositive power and sole voting power with respect to all 471,500
shares of Class A Common Stock beneficially owned. The number of shares
beneficially owned by Dimensional is indicated as of February 2, 2001.
The address of Dimensional is 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401.
(17) Capital Group International, Inc. and Capital Guardian Trust Company
(collectively, "Capital") filed a Schedule 13G with the Commission
indicating beneficial ownership of shares of Class A Common Stock.
Capital has sole dispositive power with respect to all 916,300 shares
of Class A Common Stock beneficially owned and sole voting power with
respect to 841,300 shares of Class A Common Stock beneficially owned.
The number of shares beneficially owned by Capital is indicated as of
February 9, 2001. The address of Capital is 11100 Santa Monica
Boulevard, Los Angeles, CA 90025.
(18) Liberty Wanger Asset Management, L.P., WAM Acquisition GP, Inc.
(collectively "Wanger") and Liberty Acorn Trust ("Acorn") filed a
Schedule 13G with the Commission indicating beneficial ownership of
shares of Class A Common Stock. According to the Schedule 13G, Wanger
has shared dispositive power and shared voting power with respect to
all 1,416,300 shares of Class A Common Stock beneficially owned. Acorn
has shared dispositive power with respect to 1,105,000 shares of Class
A Common Stock beneficially owned and has shared voting power with
respect to 1,105,000 shares of Class A Common Stock beneficially owned.
The number of shares beneficially owned by Wanger and Acorn are
indicated as of February 14, 2001. The address of Wanger and Acorn is
227 West Monroe Street, Suite 3000, Chicago, IL 60606.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors, and greater than
ten-percent stockholders are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the Company's 2000 fiscal year all applicable
Section 16(a) filing requirements were complied with by the officers, directors,
and greater than ten-percent beneficial owners except that Mr. Phillip Yeager
was late in filing one transaction on one Form 4.
7
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the annual, long-term and
other compensation for services rendered to the Company for the fiscal years
ended December 31, 1998, December 31, 1999 and December 31, 2000 paid or awarded
to those persons who were, at December 31, 2000: (i) the Company's chief
executive officer, and (ii) the Company's four most highly compensated executive
officers other than the chief executive officer (collectively, together with the
Company's chief executive officer, the "Named Executive Officers").
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------------- ------------
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND SALARY BONUS COMPENSATION SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- ------------------------- ---- ------- ------- ------------ ----------- ------------
David P. Yeager 2000 463,068 -- 9,266(1) -- 5,322(2)
Vice Chairman and 1999 364,000 500,000 3,438(1) -- 5,035(2)
Chief Executive Officer 1998 346,500 225,250 1,113(1) 5,000 5,062(2)
Thomas L. Hardin 2000 301,350 170,625 17,747(1) -- 5,322(2)
President and 1999 287,000 325,000 6,982(1) -- 5,035(2)
Chief Operating Officer 1998 273,000 225,250 1,500(1) 5,000 5,062(2)
Mark A. Yeager 2000 231,000 126,000 8,428(1) -- 5,322(2)
President-Field Operations 1999 208,500 210,000 2,805(1) 7,500 5,035(2)
1998 168,000 127,500 421(1) -- 5,062(2)
Donald G. Maltby 2000 224,303 263,412 520(1) 19,000 5,322(2)
President - Hub Online 1999 145,572 292,843 -- 6,000 5,035(2)
1998 141,258 288,441 -- -- 5,062(2)
Daniel L. Sellers 2000 240,000 120,000 685(1) -- 5,322(2)
V.P.- Information Systems 1999 200,000 110,000 -- 5,000 5,035(2)
and Chief Information Officer 1998 16,923 40,000 -- 35,000 5,062(2)
- ------------------
(1) Represents above market earnings on deferred compensation.
(2) Represents the Company's matching contribution to the Company's Section
401(k) deferred compensation plan of $5,200 in 2000 and $4,900 in 1999
and 1998, respectively, and represents the value of insurance premiums
paid by the Company with respect to term life insurance for the benefit
of each Named Executive Officer equal to $122 during 2000, $135 during
1999 and $162 during 1998.
CHANGE OF CONTROL AGREEMENTS
Mr. Sellers is party to an arrangement with the Company pursuant to
which he will be paid $200,000 should the Company be sold to a third party and
(i) he is terminated without cause or (ii) Mr. Phillip Yeager or his immediate
descendants cease to run the Company.
8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table summarizes the grants of stock options awarded to
the Named Executive Officers during the fiscal year ended December 31, 2000,
under the Company's 1999 Long-Term Incentive Plan.
INDIVIDUAL GRANTS
---------------------
POTENTIAL REALIZABLE VALUE
% OF AT ASSUMED ANNUAL RATES
OPTIONS/ TOTAL OF STOCK PRICE APPRECIATION
SARs OPTIONS/ FOR OPTION TERM (3)
GRANTED SARs EXERCISE EXPIRATION ---------------------------
NAME (#) GRANTED PRICE ($/SH)(1) DATE (2) 5%($) 10%($)
- ------------------------ -------- -------- --------------- ---------- --------- ---------
Donald G. Maltby........ 19,000 19.0% 13.88 5/17/10 165,852 420,302
- --------------------
(1) The exercise price equals the closing stock price on May 17, 2000.
(2) The options were granted on May 17, 2000 and vest ratably over a five-year
period, expiring ten years after their grant date.
(3) The potential realizable dollar value of a grant is the product of: (a) the
difference between (i) the product of the per-share market price at the
time of the grant and the sum of 1 plus the stock appreciation rate
compounded annually over the term of the option (here, 5% and 10%), and
(ii) the per-share exercise price of the option, and (b) the number of
securities underlying the grant at fiscal year-end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information concerning options exercised by
the Named Executive Officers during the fiscal year ended December 31, 2000, and
the value at December 31, 2000, of unexercised options.
NUMBER OF SHARES OF
CLASS A COMMON STOCK VALUE ($) OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-
SHARES OPTIONS AT MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 2000 DECEMBER 31, 2000
ON ---------------------- -------------------
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------- ---------- ------------ ---------------------- -------------------
David P. Yeager.................. 0 0 30,000/10,000 0/0
Thomas L. Hardin................. 0 0 30,000/10,000 0/0
Mark A. Yeager................... 0 0 21,500/11,000 0/0
Donald G. Maltby................. 0 0 1,200/23,800 0/0
Daniel L. Sellers................ 0 0 26,000/14,000 0/0
9
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company received $24,000 for
serving as a director during 2000. Directors who are employees of the Company do
not receive additional compensation for such services. Both employee and
non-employee directors are reimbursed for their travel and other expenses
incurred in connection with attending meetings of the Board of Directors or
committees thereof. In addition, simultaneously with the closing of the initial
public offering (the "Offering") of the Company, Messrs. Eppen, Reaves and Slark
each received options to purchase 12,000 shares of Class A Common Stock
exercisable at $14.00 per share. All of these options have now vested for each
director. On December 10, 1999, Messrs. Eppen, Reaves and Slark each received
additional options to purchase 12,000 shares of Class A Common Stock exercisable
at $18.75 per share. These options vest ratably over a three-year period.
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee approves the policies under which
compensation is paid or awarded to the Company's executive officers. The
Compensation Committee consists of the three independent members of the Board.
In October 1999, the Board of Directors commissioned a third party to
conduct a study of the Company's compensation program. This study included a
survey of compensation practices in the transportation industry using a broad
sample of companies within the industry. This independent study was used as the
benchmark to determine competitive compensation ranges for senior executives.
The Compensation Committee implemented certain recommendations from the
independent study and, using this study, determined the compensation structure
for 2000. An independent study of compensation practices in the transportation
industry will be conducted periodically by a third party to update the Company's
benchmark of competitive compensation ranges for senior executives.
The 2000 Compensation structure approved by the Compensation Committee
was based on the following philosophy:
COMPENSATION PHILOSOPHY
The Company's compensation philosophy is designed to link executive
performance to long-term stockholder value, connect pay with individual
performance, maintain a compensation system that is competitive with the
industry standards and attract and retain outstanding executives.
DESCRIPTION OF COMPENSATION PROGRAMS
The Company's executive compensation program has three components--base
salary, annual incentives, and long-term incentives. Base salary and annual
incentives are primarily designed to reward current and past performance.
Long-term incentives are primarily designed to provide strong incentives for
long-term future Company growth.
BASE SALARY To attract and retain qualified executives, base salary is
determined using competitive criteria within the transportation industry. Salary
increases are based on individual performance and, to a lesser extent, trends
within the industry.
ANNUAL INCENTIVE The Company's bonus plan recognizes and rewards
executives for taking actions that build the value of the Company, generate
competitive total returns for stockholders, and provide value-added solutions
for the Company's customers. For most executive officers, bonus compensation is
based on individual performance and Company performance. The component of the
bonus based on individual performance is conditioned on the individual meeting
certain pre-determined objectives and the component of the bonus based on
Company performance is based on the Company meeting certain performance goals.
10
LONG-TERM INCENTIVES The Company's Long-Term Incentive Program serves to
reward executive performance that successfully executes the Company's long-term
business strategy and builds stockholder value. The program allows for the
awarding of options and stock appreciation rights, restricted stock and
performance units. During fiscal year 2000, non-qualified stock options were
granted to one of the Company's executive officers. The grant was designed to
motivate the executive officer to continue the Company's growth.
SECTION 162(M) COMPENSATION COMMITTEE REPORT DISCLOSURE
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") limits the Company's deduction for compensation paid to the executive
officers named in the Summary Compensation Table to $1 million unless certain
requirements are met. The policy of the Committee with respect to section 162(m)
is to establish and maintain a compensation program which will optimize the
deductibility of compensation. In that regard, no executive officer received
compensation in excess of $1 million during fiscal year 2000. The Committee,
however, reserves the right to use its judgment, where merited by the
Committee's need to respond to changing business conditions or by an executive
officer's individual performance, to authorize compensation which may not, in a
specific case, be fully deductible to the Company.
COMPENSATION ADMINISTRATION
The Compensation Committee will follow an annual cycle to administer
each of the three components of executive compensation. The independent study of
competitive compensation practices within the transportation industry will
continue to be used as the benchmark to determine competitive compensation
ranges for senior executives. Individual performance and contribution to the
achievement of strategic objectives will be considered in the determination of
annual compensation for each executive. The integrity of the Company's
compensation program relies on an annual performance evaluation process.
DISCUSSION OF CEO COMPENSATION
Consistent with the Company's compensation philosophy, the Compensation
Committee approved Mr. David P. Yeager's total compensation during fiscal year
2000. Mr. Yeager's base salary was based on overall performance of the Company,
on relative levels of compensation for CEOs within the benchmark companies in
the transportation industry and on individual performance related to strategic
objectives. Mr. Yeager's incentive compensation was based on achievement of
goals relating to the Company's earnings per share target.
For 2000, the Compensation Committee decided to increase Mr. Yeager's
salary and reduce his bonus potential to reflect market practices. In 1999, Mr.
Yeager was paid $864,000, with $364,000 in the form of salary and $500,000 in
the form of bonus. For 2000, the Compensation Committee approved a package
allowing Mr.Yeager to earn $907,000, or five percent more than 2000, with
$463,068 in the form of salary and $444,132 in the form of bonus if the Company
met its goals for the year.
Mr. Yeager was paid his salary of $463,068 during 2000 but received no
bonus because the Company did not meet its earnings per share goal.
COMPENSATION COMMITTEE,
Gary D. Eppen
Charles R. Reaves
Martin P. Slark
11
AUDIT COMMITTEE REPORT
Each member of the Audit Committee is independent of the Company and its
management, as required of audit committee members by the National Association
of Securities Dealers listing standards. In June 2000 the Audit Committee
adopted and the Board approved a written charter, a copy of which is included
with this proxy statement. The charter specifies the scope of the Audit
Committee's responsibilities and how it carriers out those responsibilities.
The Audit Committee has reviewed and discussed the Company's quarterly
and annual audited financial statements with management and with Arthur Andersen
LLP, the Company's independent public accountants. The Company has also
discussed with Arthur Andersen LLP the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees, as
amended, by the Auditing Standards Board of the American Institute of Certified
Public Accountants. The Audit Committee has also received from Arthur Andersen
LLP the written disclosures required by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, by the Independence
Standards Board, regarding their independence. The Audit Committee has discussed
with Arthur Andersen LLP their independence and considered whether the provision
of non-audit services referred to under "Independent Public Accountants" on page
14 is compatible with maintaining their independence. Based on the review and
discussions referred to above, the Audit Committee recommended to the Board of
Directors that the December 31, 2000 audited financial statements be included in
the Company's Annual Report on Form 10-K for 2000.
AUDIT COMMITTEE
Gary D. Eppen
Charles R. Reaves
Martin P. Slark
12
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
stockholder return on its Class A Common Stock since March 13, 1996, the date
that the Class A Common Stock began trading, with the cumulative total return of
the Nasdaq Stock Market Index and the Nasdaq Trucking and Transportation Index.
These comparisons assume the investment of $100 on March 13,1996 in each index
and in the Company's Class A Common Stock and the reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
[GRAPH APPEARS HERE]
3/13/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
------- -------- -------- -------- -------- --------
Hub Group, Inc. 100 191 212 138 142 64
Nasdaq Stock Market 100 119 146 206 382 230
Nasdaq Trucking & Transp. 100 103 132 119 115 104
13
CERTAIN TRANSACTIONS
Mr. David P. Yeager is the owner of 20% of the Class A membership
interest of SmartOffices Services, LLC ("SmartOffices"). SmartOffices is in the
business of selling office supplies to various companies. The Company spent
$166,200 buying various office supplies from SmartOffices in 2000.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the
independent accountant of the Company. Representatives of Arthur Andersen LLP
will be present at the Annual Meeting and will be given the opportunity to make
a statement if they desire to do so. They will also be available to respond to
appropriate questions.
AUDIT FEES
Fees billed to the Company by Arthur Andersen LLP for the most recent
fiscal year for professional services rendered for the audit of the Company's
annual financial statements and the review of the financial statements including
in its quarterly reports were $370,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed to the Company by Arthur Andersen LLP for the
most recent fiscal year for professional services rendered for financial
information systems design and implementation.
ALL OTHER FEES
Fees billed to the Company by Arthur Andersen LLP for the most recent
fiscal year for professional services rendered for all other services were
$356,000.
PROXY SOLICITATION EXPENSE
The expense of any proxy solicitation will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation also
may be made by telephone, telegraph or personal interview by directors,
officers, and regular employees of the Company, none of whom will receive
additional compensation for any such solicitation. The Company will, upon
request, reimburse brokers, banks, and similar organizations for out-of-pocket
and reasonable clerical expenses incurred in forwarding proxy material to their
principals.
STOCKHOLDER PROPOSALS
Proposals of stockholders must be received in writing by the Secretary
of the Company at the principal executive offices of the Company no later than
December 13, 2001, in order to be considered for inclusion in the Company's
proxy statement and form of proxy relating to the next annual meeting of
stockholders.
14
The Company anticipates that its next annual meeting of stockholders
will be held in May 2002. If a stockholder desires to submit a proposal for
consideration at the next annual meeting of stockholders, written notice of such
stockholder's intent to make such a proposal must be given and received by the
Secretary of the Company at the principal executive offices of the Company
either by personal delivery or by United States mail no earlier than February
14, 2002 nor later than March 16, 2002. Each notice must describe the proposal
in sufficient detail for the proposal to be summarized on the agenda for the
annual meeting of stockholders and must set forth: (i) the name and address, as
it appears on the books of the Company, of the stockholder who intends to make
the proposal; (ii) a representation that the stockholder is a holder of record
of stock of the Company entitled to vote at such meeting and intends to appear
in person or by proxy at such meeting to present such proposal; and (iii) the
class and number of shares of the Company which are beneficially owned by the
stockholder. In addition, the notice must set forth the reasons for conducting
such proposed business at the annual meeting of stockholders and any material
interest of the stockholder in such business. The presiding officer of the
annual meeting of stockholders will, if the facts warrant, refuse to acknowledge
a proposal not made in compliance with the foregoing procedure, and any such
proposal not properly brought before the annual meeting of stockholders will not
be considered.
By order of the Board of Directors,
DAVID C. ZEILSTRA
Vice President, Secretary and General Counsel
Lombard, Illinois
April 12, 2001
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO BE PRESENT IN PERSON AT
THE ANNUAL MEETING, IS REQUESTED TO MARK, SIGN, DATE, AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. A STOCKHOLDER MAY
REVOKE HIS OR HER PROXY AT ANY TIME PRIOR TO VOTING.
15
EXHIBIT A
---------
HUB GROUP, INC.
AUDIT COMMITTEE CHARTER
The purpose of the Audit Committee is to be an informed, vigilant and
effective overseer of the internal controls of the Company and its subsidiaries.
The Audit Committee shall also assist the Board of Directors in fulfilling its
obligation to provide adequate and accurate financial reporting to shareholders
and potential shareholders. To achieve these objectives, the Audit Committee
shall be constituted and operated pursuant to the following requirements:
1. MEMBERSHIP OF COMMITTEE
The Audit Committee shall consist of three members of the Company's
Board of Directors who are approved by a majority vote of the Company's
Directors. The Audit Committee members shall not be employees or
officers of the Company or its subsidiaries and shall be Directors who
are independent of the management of the Company and free of any
relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgement in carrying out
their responsibilities as a director.
All three Directors must be financially literate. Financial literacy
shall include the ability to read and understand the Company's
financial statements, including the Company's balance sheet, income
statement and cash flow statement. At least one of the three Directors
must have past employment experience in finance or accounting,
requisite professional certification in accounting or comparable
experience, or background that results in the individual's financial
sophistication, including being or having been a Chief Executive
Officer, Chief Financial Officer, or other senior officer with
financial oversight responsibilities.
The Audit Committee shall consist of the three Directors selected at
the Board Meeting at which this charter is adopted. Such Directors
shall serve until the next annual Board meeting. Thereafter, members of
the Audit Committee shall be selected at the annual Board meeting and
shall serve one-year terms; provided, however, that the Board shall, if
possible, select at least one member of each year's audit committee to
continue on such committee for the following year. The Board of
Directors by majority vote shall appoint one of the three members of
the Audit Committee to serve as Chairman of the Audit Committee. The
Chairman of the Audit Committee shall serve in that capacity until the
Board of Directors appoints a new Chairman of the Audit Committee.
Except as expressly provided in this charter or the Company's Bylaws,
the Audit Committee shall fix its own rules of procedure.
2. DUTIES OF THE AUDIT COMMITTEE
The Audit Committee shall be responsible for the following matters:
(a) Oversight of the Company's internal control structure;
(b) Review of the operations of the Company's controller;
(c) Selection, evaluation or replacement of the independent
auditors for the Company and its subsidiaries;
(d) Review of the company's annual audit plan; and
(e) Ensure the independence of the outside auditor.
A-1
In overseeing the Company's internal control structure, Audit Committee
shall review all internal control evaluations performed by management,
the Controller and the independent auditors, with a view to determining
that the Company's assets are safeguarded and that transactions are
authorized and properly recorded. In addition, the Audit Committee
shall review evaluations of the company's electronic data processing
system to determine the adequacy of its related controls.
The Audit Committee shall annually review the Chief Financial Officer's
authority, the qualifications, experience and training of the Chief
Financial Officer's staff, and the reporting relationships between the
Chief Financial Officer and top management. The Chief Financial Officer
shall be entitled to directly contact the Audit committee without prior
approval of Company management.
The Audit Committee shall select and evaluate a nationally recognized
firm of certified public accountants to serve as auditors for the
Company and its subsidiaries, based upon such factors as the Audit
Committee deems relevant to assess the expertise, integrity and
effectiveness of such auditors. The Audit Committee has the authority
and responsibility to replace the independent auditor, as deemed
necessary. Different accounting firms may be chosen to audit the
Company or any subsidiary thereof. The independent auditors selected
shall be accountable to the Board of Directors and the Audit Committee.
The Audit Committee shall obtain from the auditors a formal written
statement delineating all relationships between the auditor and the
Company or any of its subsidiaries, consistent with Independence
Standards Board Standard 1. The Audit Committee shall actively discuss
with the auditor any disclosed relationships or services that may
impact the objectivity and independence of the auditor. The Audit
Committee shall take, or recommend that the full Board of Directors
take, appropriate action to oversee the independence of the auditor. No
accounting firm shall be selected or continue as an auditor of the
Company or any of its subsidiaries if members of such firm have
investments in, or relationships with, the audited entity which would
compromise the independence of the auditors. Performing management
advisory services for the audited entity shall not disqualify an
accounting firm unless the extent of such services and the amount of
compensation earned thereby is sufficient, in the judgement of the
Audit Committee, to compromise the independence of such accounting
firm.
The Audit Committee shall meet with the independent auditors prior to
the commencement of the annual audit to review the audit plan for such
year, written copies of which shall be provided to the committee
members a week prior to such meeting. The purpose of such meeting shall
be to evaluate the adequacy of the audit plan and to explore any
significant accounting and auditing problems that the auditors may
foresee. The Audit committee shall again meet with the independent
auditors, after the completion of the audit and before distribution of
the annual financial statement, to evaluate the accuracy of the
Company's financial reporting, the internal controls of the Company,
the nature of any disagreements or major issues discussed between the
independent auditors and management, the nature and resolution of any
significant or unusual accounting and auditing problems encountered in
the audit and such other matters as the committee deems appropriate.
Although the Audit Committee may request officers of the Company to
attend any of the foregoing meetings, the Audit Committee shall meet at
least once a year with the independent auditors in a private executive
session, without the attendance of any officers of the Company.
The Audit Committee shall also meet with the Controller and the
independent auditors to discuss the auditor's letter of recommendations
to management and any comments the auditors may have with respect to
improving controls.
The Audit Committee may meet at such other times as it deems
appropriate to effectively perform its duties.
A-2
3. REPORTING REQUIREMENTS
The Audit Committee shall have minutes taken of each meeting. Promptly
after the annual financial statements are released, the Audit Committee
shall provide the Board of Directors with a written report evaluating
the adequacy of the Company's internal controls and financial reporting
processes and evaluating the effectiveness of the independent auditor.
Such reports shall also contain any recommendations that the Audit
Committee wishes to make with respect to such matters.
4. ACCESS TO COMPANY RESOURCES
With reasonable advance notice, the Audit Committee may request any
accounting or legal officer of the Company to attend any meeting of the
Audit Committee or to otherwise provide assistance to the committee in
fulfilling its responsibilities. The Audit Committee shall endeavor to
avoid disruptions of the Company's normal operations in utilizing such
personnel. In the event that the Committee believes that any employee,
officer or director of the Company is engaging in fraudulent activities
involving the Company, the Committee shall be entitled to engage
outside legal counsel or other experts to assist the Committee in
investigating such matter.
5. ANNUAL REVIEW OF AUDIT COMMITTEE CHARTER
In recognition of the nature of the Company's growth, the Board of
Directors shall annually review the charter of the Audit Committee to
determine its adequacy in light of the Company's needs at the time of
the review.
A-3