hubgroupproxy2009.htm
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:
[ ]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material under Section 240.14a-12
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HUB GROUP, INC.
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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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):
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4)
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Proposed
maximum aggregate value of
transaction:
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[ ]
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Fee
paid previously with preliminary
materials
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[ ]
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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.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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March 25,
2009
Dear
Stockholder:
You are
cordially invited to attend the 2009 Annual Meeting of Stockholders of Hub
Group, Inc. This meeting will be held at The Hyatt Lodge on the
McDonald’s campus at 2815 Jorie Boulevard, Oak Brook, Illinois at 10:00 a.m.
Central time on Wednesday, May 6, 2009.
The
attached Notice of 2009 Annual Meeting of Stockholders and Proxy Statement
describe the matters to be acted upon. The Annual Report to
Stockholders on Form 10-K 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,
DAVID P.
YEAGER
Chairman
and Chief Executive Officer
HUB GROUP, INC.
NOTICE
OF 2009 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 at The Hyatt Lodge on the McDonald’s campus at 2815
Jorie Boulevard, Oak Brook, Illinois on Wednesday, May 6, 2009, at 10:00
a.m. Central time for the following purposes:
(1)
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To
elect five directors of the Company to hold office until the next annual
meeting of stockholders; and
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(2)
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To
transact such other business as may properly be presented at the Annual
Meeting or any
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A proxy
statement with respect to the Annual Meeting accompanies and forms a part of
this Notice. The Company’s Annual Report to Stockholders on Form 10-K
also accompanies this Notice.
The Board
of Directors has fixed the close of business on March 11, 2009, 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
Downers
Grove, Illinois
March 25,
2009
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.
Important
Notice Regarding the Availability of
Proxy
Materials for the Stockholders Meeting to be
Held
on May 6, 2009
The
Proxy Statement and Annual Report to Stockholders are
Available
at www.hubgroup.com/proxy.html
HUB
GROUP, INC.
3050
HIGHLAND PARKWAY, SUITE 100
DOWNERS
GROVE, ILLINOIS 60515
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 2009 Annual Meeting of Stockholders of the
Company to be held on Wednesday, May 6, 2009, and any adjournment thereof (the
“Annual Meeting”). This Proxy Statement and accompanying form of
proxy are first being sent to stockholders on or about March 25,
2009.
The
Company’s Class A common stock, $.01 par value (the “Class A Common Stock”), and
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 11, 2009 (the “Record Date”), are entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, the
Company had 37,163,886 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. If
your shares are held in a bank or brokerage account, you will receive proxy
materials from your bank or broker, which will include a voting instruction
form. If you would like to attend the Annual Meeting and vote these
shares in person, you must obtain a proxy from your bank or
broker. You must request this form from your bank or broker; they
will not automatically supply one to you.
Each
Class A Share is entitled to one (1) vote and each Class B Share is entitled to
approximately eighty (80) votes. The holders of Shares having a
majority of the votes that 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. As of March 11, 2009, the
Yeager family members own all 662,296 shares of Class B Common Stock and 858,003
shares of Class A Common Stock. Consequently, the Yeager family
controls approximately 60% 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. Election inspectors appointed
for the meeting will tabulate votes cast by proxy or in person at the Annual
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 2009 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 Downers Grove.
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 five. 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. Abstentions, withholding of authority to vote in
the election, or broker non-votes will not affect the outcome of the
election. Stockholders are not allowed to cumulate their votes in the
election of directors.
Nominees
for Election as Directors
Business Experience During the Past
Five Years
Name Age and Other
Information
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David
P. Yeager
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56
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David
P. Yeager has served as the Company’s Chairman of the Board since November
2008 and as Chief Executive Officer of the Company since March 1995. Mr.
Yeager was Vice Chairman of the Board from January 1992 through November
2008. 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 brother of Mark A.
Yeager.
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Mark
A. Yeager
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44
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Mark
A. Yeager has been the Company’s Vice Chairman since November 2008, has
served as President since January 2005 and has been the Chief Operating
Officer and a director since May 2004. From July 1999 through
December 2004, Mr. Yeager was President-Field Operations. From
November 1997 through June 1999 Mr. Yeager was Division President,
Secretary and General Counsel. From March 1995 to November
1997, Mr. Yeager was Vice President, Secretary and General
Counsel. From May 1992 to March 1995, Mr. Yeager served as the
Company’s Vice President-Quality. Prior to joining the Company in 1992,
Mr. Yeager was an associate at the law firm of Grippo & Elden from
January 1991 through May 1992 and an associate at the law firm of Sidley
& Austin from May 1989 through January 1991. Mr. Yeager received a
Juris Doctor degree from Georgetown University in 1989 and a Bachelor of
Arts degree from Indiana University in 1986. Mr. Yeager is the brother of
David P. Yeager.
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Gary
D. Eppen
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72
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Gary
D. Eppen has served as a director of the Company since February
1996. Currently retired, Mr. Eppen was the Ralph and Dorothy
Keller Distinguished Service Professor of Operations Management and Deputy
Dean for part-time programs in the Graduate School of Business at The
University of Chicago. 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.
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Charles
R. Reaves
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70
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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.
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Martin
P. Slark
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54
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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
publicly traded 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 Vice Chairman and Chief Executive Officer of Molex and is also a
Director of Liberty Mutual Insurance Company. Mr. Slark is a
companion of the British Institute of Management and received a Masters in
Business Administration degree from the University of East London in 1993
and a Post-Graduate Diploma in Management Studies from Portsmouth
University in 1981.
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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 an Audit Committee, a Compensation Committee and a Nominating
and Governance Committee. During the fiscal year ended December 31,
2008, the full Board of Directors met four times, the Audit Committee met nine
times, the Compensation Committee met five times and the Nominating and
Governance Committee met once. During 2008, all directors attended at
least 75% of the meetings of the Board of Directors and the committees thereof
on which they served. The Company encourages each member of the Board
of Directors to attend each annual meeting of stockholders. All
directors attended the Company’s 2008 annual meeting of stockholders held on May
14, 2008.
Audit
Committee
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 Audit
Committee has a written charter which is available on the Company’s website at
www.hubgroup.com. The
Committee annually reviews and assesses the adequacy of the
Charter.
The Board of Directors has
determined that Messrs. Eppen, Reaves and Slark are “independent” in
accordance with the applicable corporate governance listing standards of the
Nasdaq Stock Market. The Board of Directors has determined that the
Audit Committee does not have an “audit committee financial expert” as that term
is defined in the Securities and Exchange Commission
regulations. However, the Board of Directors has determined that all
of the members of the Audit Committee are able to read and understand
fundamental financial statements within the meaning of the Nasdaq Audit
Committee requirements and that at least one of its members has the financial
sophistication required by Nasdaq. The Board of Directors has
determined that by satisfying the requirements of the Nasdaq listing standards
with a member of the Audit Committee that has the requisite “financial
sophistication” qualifications, the Audit Committee has the financial expertise
necessary to fulfill the duties and the obligations of the Audit Committee. The
Board of Directors has concluded that the appointment of an “audit committee
financial expert” is not necessary at this time.
Compensation
Committee
The
Compensation Committee is responsible for providing assistance to the Board in
the discharge of its responsibilities relating to compensation and development
of the Company’s Chief Executive Officer and other executive officers. In
addition, the Compensation Committee reviews, adopts, terminates, amends or
recommends to the Board the adoption, termination or amendment of equity-based
employee plans, incentive compensation plans and employee benefit plans, as
further described in the Compensation Committee Charter. The
Compensation Committee may use a compensation consultant to assist in the
evaluation of Chief Executive Officer or executive officer compensation. The
Compensation Committee has the sole authority to retain and terminate any
compensation consultant and to approve the consultant’s fees and other retention
terms. The members of the Compensation Committee are Messrs. Eppen,
Reaves and Slark. The Compensation Committee has a written charter
which is available on the Company’s website at www.hubgroup.com. The
Committee annually reviews and assesses the adequacy of the
Charter.
Nominating
and Governance Committee
The
duties of the Nominating and Governance Committee are to identify individuals
qualified to become Board members and nominate the director nominees for the
next annual meeting of stockholders, assist the Board with succession planning
and develop and recommend to the Board the corporate governance guidelines
applicable to the Company. The members of the Nominating and
Governance Committee are Messrs. Eppen, Reaves and Slark. The
Nominating and Governance Committee has a written charter which is available on
the Company’s website at www.hubgroup.com. The
Committee annually reviews and assesses the adequacy of the
Charter.
Nominations
of Directors
Directors
may be nominated by the Board of Directors or by stockholders in accordance with
the Bylaws of the Company. As a matter of course, the Nominating and
Governance Committee will review the qualifications of various persons to
determine whether they might make good candidates for consideration for
membership on the Board of Directors. The Nominating and Governance
Committee will review all proposed nominees for the Board of Directors,
including those proposed by stockholders, in accordance with the mandate
contained in its charter. This will include a review of the person’s
judgment, experience, independence, understanding of the Company’s business or
other related industries and such other factors as the Nominating and Governance
Committee determines are relevant in light of the needs of the Board of
Directors and the Company. The Nominating and Governance Committee
will select qualified candidates and review its recommendations with the Board
of Directors, which will decide whether to invite the candidate to be a nominee
for election to the Board of Directors.
The
Company has not paid a fee to any third party to identify or assist in
identifying or evaluating potential nominees. Each nominee for
election as a director is standing for reelection.
For a stockholder to
submit a candidate for consideration by the Nominating and Governance Committee,
a stockholder must notify the Company’s Secretary. In addition, the
Bylaws permit stockholders to nominate directors at a stockholder
meeting. 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 3050 Highland Parkway, Suite 100,
Downers Grove, IL 60515, either by personal delivery or by United States mail
within the time period set forth below under “Stockholder
Proposals.” 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.
Controlled
Company
The Board of Directors has determined
that the Company is a “controlled company” as that term is defined by Nasdaq
since the Yeager family, pursuant to their ownership of all Class B Common
Stock, control 59% of the voting power of the Company as of March 11,
2009. Pursuant to the Yeager Family Stockholder Agreement, the Yeager
family members 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.
Code
of Ethics
The Company has adopted a Code of
Business Conduct and Ethics that applies to all employees. The
Company’s Code of Business Conduct and Ethics may be found on the Company’s
website, www.hubgroup.com.
Communicating
with the Board
Stockholders
may communicate directly with the Board of Directors. All
communications should be directed to the Company’s Secretary at the address set
forth above and should prominently indicate on the outside of the envelope that
it is intended for the Board of Directors or for non-management
directors. Each communication intended for the Board of Directors and
received by the Secretary which is not otherwise commercial in nature will be
forwarded to the specified party following its clearance through normal security
procedures.
Review
of Related Party Transactions
The Company does not employ specific
procedures for the review, approval or ratification of related party
transactions involving directors, nominees for directors, executive officers and
their immediate family members, but considers such transactions on a
case-by-case basis as they arise.
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 current 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 February 11, 2009, 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.
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Number
(1)
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Name
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Class A
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Class B
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Percentage(2)
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David
P. Yeager (3)(4)
|
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406,176 |
|
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662,296 |
|
|
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2.8 |
% |
Mark
A. Yeager (3)(5)
|
|
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686,933 |
|
|
|
662,296 |
|
|
|
3.6 |
% |
Terri
A. Pizzuto (6)
|
|
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81,110 |
|
|
|
-- |
|
|
|
* |
|
David
L. Marsh (7)
|
|
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68,039 |
|
|
|
-- |
|
|
|
* |
|
Christopher
R. Kravas (8)
|
|
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74,194 |
|
|
|
-- |
|
|
|
* |
|
Gary
D. Eppen (9)
|
|
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48,950 |
|
|
|
-- |
|
|
|
* |
|
Charles
R. Reaves (10)
|
|
|
67,303 |
|
|
|
-- |
|
|
|
* |
|
Martin
P. Slark (11)
|
|
|
64,415 |
|
|
|
-- |
|
|
|
* |
|
All
directors and executive officers (13 people) (12)
|
|
|
1,613,591 |
|
|
|
662,296 |
|
|
|
6.0 |
% |
Debra
A. Jensen (3)(13)
|
|
|
176,439 |
|
|
|
662,296 |
|
|
|
2.2 |
% |
Wellington
Management Company, LLP
(14)...............................
|
|
|
3,459,429 |
|
|
|
-- |
|
|
|
9.1 |
% |
T.
Rowe Price Associates, Inc.
(15)...............................
|
|
|
3,317,000 |
|
|
|
-- |
|
|
|
8.8 |
% |
Neuberger
Berman (16).......... .....................
|
|
|
3,334,113 |
|
|
|
-- |
|
|
|
8.8 |
% |
Barclays
(17).......... .....................
|
|
|
2,643,403 |
|
|
|
-- |
|
|
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________________________
* 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.
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(2)
|
Represents
percentage of total number of outstanding shares of Class A Common Stock
and Class B Common Stock.
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(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 4 and 5, 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 59% of the total votes allocable to the Common
Stock. Members of the Yeager family own all of the Class B
Common Stock.
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(4)
|
Includes
51,624 shares of Class B Common Stock owned by the Laura C. Yeager 1994
GST Trust, 51,624 shares of Class B Common Stock owned by the Matthew D.
Yeager 1994 GST Trust and 51,624 shares of Class B Common Stock owned by
the Phillip D. Yeager 1994 GST Trust and 386,341 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. Includes 41,962 shares of restricted
stock, as well as 29,334 shares of Class A Common Stock issuable upon
exercise of options. Also includes 176,439 shares of Class A
Common Stock held by the Phillip C. Yeager 1994 Trust as Mr. Yeager has
shared voting and dispositive power for these
shares.
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(5)
|
Includes
43,826 shares of Class A Common Stock and 44,040 shares of Class B Common
Stock owned by the Alexander B. Yeager 1994 GST Trust and 43,826 shares of
Class A Common Stock and 44,040 shares of Class B Common Stock owned by
the Samantha N. Yeager 1994 GST Trust and 19,907 shares of Class A Common
Stock owned by the Mark A. Yeager Perpetual Trust (for which Mark A.
Yeager serves as sole trustee and has sole investment and voting
discretion) and 469,126 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 36,761 shares of restricted stock, as well as
29,333 shares of Class A Common Stock issuable upon exercise of
options. Also includes 176,439 shares of Class A Common Stock
held by the Phillip C. Yeager 1994 Trust as Mr. Yeager has shared voting
and dispositive power with respect to these
shares.
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(6)
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Includes
24,639 shares of restricted stock and 6,800 shares of Class A Common Stock
issuable upon exercise of options.
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(7)
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Includes
19,366 shares of restricted stock.
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(8)
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Includes
18,381 shares of restricted stock and 12,000 shares of Class A Common
Stock issuable upon exercise of
options.
|
(9)
|
Includes
7,547 shares of restricted stock. 39,629 shares are held in the
Gary D. Eppen Trust dated April 22,
1996.
|
(10)
|
Includes
7,547 shares of restricted stock.
|
(11)
|
Includes
24,000 shares of Class A Common Stock issuable upon exercise of options
and 7,547 shares of restricted
stock.
|
(12)
|
Includes
136,467 shares of Class A Common Stock issuable upon exercise of options
and 251,507 shares of restricted
stock.
|
(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 469,125 shares of Class B Common
Stock as to which Debra A. Jensen may be deemed to have shared voting
discretion pursuant to the Yeager Family Stockholder
Agreement. See Note 3. Also includes 176,439 shares
of Class A Common Stock held by the Phillip C. Yeager 1994 Trust as Ms.
Jensen has shared voting and dispositive power with respect to these
shares. Debra A. Jensen is the sister of David P. Yeager and
Mark A. Yeager.
|
(14)
|
Wellington
Management Company, LLP (“Wellington”) filed an amendment to a Schedule
13G with the Commission indicating beneficial ownership of shares of Class
A Common Stock. According to the Schedule 13G, Wellington has
shared dispositive power with respect to all 3,459,429 shares of Class A
Common Stock beneficially owned and shared voting power with respect to
2,496,500 shares of Class A Common Stock beneficially owned. These
securities are owned by various individual and institutional investors,
which Wellington serves as investment advisor with power to direct
investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Exchange Act, Wellington is
deemed the beneficial owner of such securities; however, Wellington
expressly disclaims that it is, in fact, the beneficial owner of such
securities. The number of shares beneficially owned by
Wellington is indicated as of February 17, 2009. The address of Wellington
is 75 State Street, Boston, MA
02109.
|
(15)
|
T.
Rowe Price Associates, Inc. (“Price Associates”) filed an amendment to a
Schedule 13G with the Commission indicating beneficial ownership of shares
of Class A Common Stock. According to the Schedule 13G, Price
Associates has sole dispositive power with respect to all 3,317,000 shares
of Class A Common Stock beneficially owned and sole voting power with
respect to 851,500 shares of Class A Common Stock beneficially owned.
These securities are owned by various individual and institutional
investors which Price Associates serves as investment advisor with power
to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the
Exchange Act, Price Associates is deemed the beneficial owner of such
securities; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such securities. The number of
shares beneficially owned by Price Associates is indicated as of February
13, 2009. The address of Price Associates is 100 E. Pratt Street,
Baltimore, MD 21202.
|
(16)
|
Neuberger
Berman Inc., Neuberger Berman, LLC, Neuberger Berman Management LLC, and
Neuberger Berman Equity Funds (collectively “Neuberger Berman”) filed an
amendment to a Schedule 13G with the Commission indicating beneficial
ownership of shares of Class A Common Stock. According to the
Schedule 13G, Neuberger Berman has sole voting power with respect to 120
shares of Class A Common Stock, shared voting power with respect to
2,816,400 shares of Class A Common Stock and shared dispositive power with
respect to all 3,334,113 shares of Class A Common Stock. The
number of shares beneficially owned by Neuberger Berman is indicated as of
February 12, 2009. The address of Neuberger Berman is 605 Third
Avenue, New York, NY 10158.
|
(17)
|
Barclays
Global Investors, NA, Barclays Global Fund Advisors and Barclays Global
Investors, Ltd. (collectively “Barclays”) filed a Schedule 13G with the
Commission indicating beneficial ownership of shares of Class A Common
Stock. According to the Schedule 13G, Barclays has sole
dispositive power with respect to all 2,643,403 shares of Class A Common
Stock beneficially owned and sole voting power with respect to 2,061,016
shares of Class A Common Stock beneficially owned. Barclays has indicated
that the shares reported held by Barclays are held in trust accounts for
the economic benefit of the beneficiaries of those
accounts. The number of shares beneficially owned by Barclays
is indicated as of February 6, 2009. The address of the
business office of Barclays Global Investors, NA is 400 Howard Street, San
Francisco, CA 94105.
|
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 2008 fiscal year all applicable Section 16(a)
filing requirements were complied with by the officers, directors, and greater
than ten-percent beneficial owners.
COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
Overview
of Compensation Program
Our
Compensation Committee has the responsibility for determining the compensation
that is paid or awarded to our Company’s executive officers. Our
Compensation Committee consists of the three independent members of the
Board. Our Compensation Committee ensures that the total compensation
paid to our executive officers is fair, reasonable and competitive and drives
behavior that increases stockholder value over the long-term.
Compensation
Philosophy and Objectives
Our
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 industry standards and attract and
retain outstanding executives. We seek to incent our executives
through both short term and long term awards, with a goal of superior Company
performance. Our ultimate objective is to improve stockholder
value.
Our
Compensation Committee evaluates both performance and compensation to ensure
that our Company maintains its ability to attract and retain superior employees
in key positions and that compensation provided to key employees remains
competitive relative to the compensation paid to similarly situated executives
of our peer companies. To that end, our Compensation Committee believes
executive compensation packages provided to our executives should include both
cash and stock-based compensation that reward performance as measured against
pre-established goals.
Role
of Executive Officers in Compensation Decisions
Our
Compensation Committee, with input and recommendations from our Chief Executive
Officer and President, makes all compensation decisions for the executive
officers and approves recommendations of equity awards to all executive officers
of the Company. The Chief Executive Officer and President annually review the
performance of the executive officers. The conclusions reached and
recommendations based on these reviews, including salary adjustments and annual
stock and cash award amounts, are presented to the Compensation
Committee. Our Compensation Committee can exercise its discretion in
modifying any recommended adjustments of stock or cash awards to
executives.
Setting
Executive Compensation
Based on
the foregoing objectives, our Compensation Committee has structured the
Company’s annual and long-term incentive-based cash and non-cash executive
compensation to motivate executives to achieve the business goals set by the
Company and reward the executives for achieving such goals.
Compensation
Consultant. To help the Company achieve its compensation
objectives, our Compensation Committee engaged Hay Group, Inc. as its
independent compensation consultant for 2008. The consultant’s role
is to advise our Compensation Committee on all executive compensation matters.
The consultant assists by providing relevant market data and evaluating the
total compensation system relative to the compensation systems employed by
comparable companies in the transportation industry and the overall U.S.
industrial market. The consultant also provides an additional measure of
assurance that the Company’s executive compensation program is a reasonable and
appropriate means to achieve our objectives. Our Compensation
Committee reviews the performance and level of service provided by its
independent compensation consultant on an annual basis.
Market
Benchmarking. A benchmark group of publicly-traded companies
in the transportation industry is used annually by our Compensation Committee to
ensure that Hub Group’s compensation programs offer competitive total
compensation opportunities and reflect best practices in compensation plan
design. In 2008, the companies comprising the “Compensation Peer
Group” were:
CH
Robinson Worldwide, Inc.
Expeditors
International of Washington, Inc.
Forward
Air Corp.
J.B. Hunt
Transport Services, Inc.
Landstar
System, Inc.
Pacer
International, Inc.
UTI
Worldwide, Inc.
Werner
Enterprises, Inc.
In
addition, information on annual base salary increases and compensation data for
the U.S. general industrial markets is provided by our Compensation Committee’s
independent compensation consultant.
The
Company’s CEO and President develop pay recommendations for the Company’s
executives based on (i) the aforementioned market data, (ii) each executive’s
individual performance and functional responsibilities as determined by the CEO
and President; and (iii) Company performance, both financial and
non-financial. Our Compensation Committee reviews and approves these
pay recommendations with the advice of its independent compensation
consultant. Our Compensation Committee also sets the base salary and
incentive opportunities for the Company’s CEO based on (i) the aforementioned
market data, (ii) the CEO’s individual performance and responsibilities and
(iii) Company performance, both financial and non-financial.
Our
Compensation Committee generally seeks to set the base salary for executive
officers at the 50th
percentile of compensation paid to similarly situated executives according to
the general survey data. Our Compensation Committee also considers,
on a secondary basis, the proxy data of the companies comprising the
Compensation Peer Group. Variations to this objective do occur as dictated by
the experience level of the individual, personal performance and market
factors.
There is
no pre-established policy or target for the allocation between either cash and
non-cash or short-term and long-term incentive compensation. Rather, our
Compensation Committee reviews information provided by our compensation
consultant to determine the appropriate level and mix of incentive
compensation. Pay for such incentive compensation is awarded as a
result of the performance of the Company or the individual, depending on the
type of award, compared to pre-established goals.
2008
Executive Compensation Components
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 provided to our
executive officers. The base salary is determined based on position
and responsibility using competitive criteria within the transportation
industry. During its review of base salaries for the executives, our
Compensation Committee primarily considers (i) market data provided by our
outside consultants, (ii) an internal review of the executive’s compensation,
both individually and relative to other officers and (iii) individual
performance of the executive. Salary levels are typically
reviewed annually as part of our annual performance review process as well as
upon a promotion or other change in job responsibilities. Increases
are based on increases in the cost of living, individual performance and, to a
lesser extent, trends within the industry.
For both
2008 and 2009, management recommended that our executive officers receive no
increase in salary due to the challenging economic conditions. The
Compensation Committee agreed with this recommendation.
Annual Cash
Incentive. The Company’s annual cash incentive recognizes and
rewards executives for taking actions that build the value of the Company and
generate competitive total returns for stockholders. Our annual cash
incentive is determined with the assistance of the third party survey data
referred to above and the value of the target award is generally set at 60% of
the executive’s annual base salary. This incentive is based solely on
earnings per share (“EPS”) for our Chief Executive Officer and
President. For our other executive officers, this incentive is based
on a combination of EPS (80%) and on individual performance compared against
certain pre-determined personal goals (20%). The personal goals vary
by officer. For 2008, the personal goals for officers responsible for
each of our service lines were generally tied to specific financial metrics for
the service line managed by the executive. For our other
executives, the personal goals were generally tied to specific objectives within
their area of responsibility. The personal goals are generally set at
a level that are believed to be achievable with superior personal
performance.
Ms.
Pizzuto’s personal goals required her to maintain strong investor relations
(25%), assist with analysis and due diligence for acquisitions (25%) and
maintain strong financial processes, controls and team leaders
(50%). Ms. Pizzuto met or exceeded each of these goals and earned her
full annual cash incentive related to her personal goals of
$36,000.
Mr.
Marsh’s personal goals required him to meet a service line defined profitability
growth goal for intermodal, a service line defined profitability growth goal for
truck brokerage, a service line defined profitability growth goal for logistics
and an intermodal volume growth target. Each of these four goals had
a target incentive of $9,000, making Mr. Marsh’s total potential incentive
related to personal goals $36,000. The intermodal growth goal was
measured by a scale under which Mr. Marsh would not earn any incentive if
intermodal service line profitability did not grow by at least 6.5% (at which
75% of the incentive was earned) and 100% of his target incentive if the
intermodal service line defined profitability grew by 8.7%. The
intermodal service line profitability did not grow and therefore Mr. Marsh
earned nothing under this goal. The truck brokerage growth goal was
measured by a scale under which Mr. Marsh would not earn any incentive if truck
brokerage service line profitability did not grow by at least 7.5% (at which 50%
of the incentive was earned) and 100% of his target incentive if the truck
brokerage service line defined profitability grew by 15%. Truck
brokerage service line profitability did not grow by at least 7.5% and therefore
Mr. Marsh earned nothing under this goal. The logistics growth
goal was measured by a scale under which Mr. Marsh would not earn any incentive
if logistics service line profitability did not grow by at least 15% (at which
50% of the incentive was earned) and 100% of his target incentive if the
logistics service line defined profitability grew by 20.8%. Logistics
service line profitability grew by 19.6% and therefore Mr. Marsh earned 90% or
$8,100 of this logistics incentive. The intermodal volume growth goal
was measured by a scale under which Mr. Marsh would not earn any incentive if
intermodal volume did not grow by at least 2% (at which 80% of the incentive was
earned) and 100% of his target incentive if intermodal volume grew by
3%. Intermodal volume grew by 2% and therefore Mr. Marsh earned 80%
or $7,200 of this intermodal volume incentive. In total, Mr. Marsh
received $15,300 out of a potential $36,000 related to his personal
goals.
Mr.
Kravas’ personal goals required him to meet a service line defined profitability
growth goal for intermodal, an intermodal volume growth target and a goal
related to the amount of Hub Group drayage performed by our Comtrak
subsidiary. The service line defined profitability growth goal for
intermodal had a target incentive of $18,000 and the other two goals had a
target incentive of $9,000 each, making Mr. Kravas’ total potential incentive
related to personal goals $36,000. The intermodal service line
profitability growth goal was measured by a scale under which Mr. Kravas would
not earn any incentive if intermodal service line profitability did not grow by
at least 6.5% (at which 75% of the incentive was earned) and 100% of his target
incentive if the intermodal service line defined profitability grew by
8.7%. The intermodal service line profitability did not grow and
therefore Mr. Kravas earned nothing under this goal. The intermodal
volume growth goal was measured by a scale under which Mr. Kravas would not earn
any incentive if intermodal volume did not grow by at least 2% (at which 80% of
the incentive was earned) and 100% of his target incentive if intermodal volume
grew by 3%. Intermodal volume grew by 2% and therefore Mr. Kravas
earned 80% or $7,200 of this intermodal volume incentive. The Comtrak
drayage goal was measured by a scale under which Mr. Kravas would not earn any
incentive if Comtrak did not perform at least 30% of Hub Group’s drayage (at
which 40% of the incentive was earned) and 100% of his target incentive if
Comtrak performed 40% of Hub Group’s drayage. Comtrak performed approximately
30% of Hub Group’s drayage and therefore 40% or $3,600 of this incentive was
earned. However, the Compensation Committee, upon the recommendation
of the Chief Executive Officer, elected to pay 100% of this incentive, or
$9,000, due to the outstanding work Mr. Kravas did purchasing drayage services
for Hub Group. In total, Mr. Kravas received $16,200 out of a
potential $36,000 related to his personal goals.
Each year
our Compensation Committee sets an EPS target for our Company. Once
the year is completed, Hub Group’s earnings per share are compared against the
EPS target. If we meet the EPS target, we pay the EPS portion of the
award. If we do not meet our EPS target, we do not pay any cash
incentive related to EPS or we pay a reduced incentive based on a sliding
scale. In the same way, our executives can earn, also on a sliding
scale, up to twice their EPS target incentive if we substantially exceed our EPS
target. For 2008, our sliding scale started at $1.49 (“Adjusted 2007
EPS”), which equals our 2007 EPS after excluding the four cents of earnings per
share due to certain non-recurring tax benefits. Our EPS target for
2008 was set at $1.70, which represents a 14% increase over our Adjusted 2007
EPS. Our executives could earn twice their EPS target incentive if we
earned $1.91 per share, which represents a 28% increase over our Adjusted 2007
EPS. During 2008, we earned $1.58 per share. Based on our
pre-approved sliding scale, our executives therefore received 40% of their EPS
target incentive.
Mr. David
Yeager’s target incentive related to EPS was $344,920 for 2008. Mr.
Yeager received 40% of this targeted amount, or $137,968 in accordance with the
sliding scale previously approved by the Compensation Committee. Mr. Mark
Yeager’s target incentive related to EPS was $239,693 for 2008. Mr.
Mark Yeager received 40% of this targeted amount or $95,877. Ms.
Pizzuto’s target incentive related to EPS was $144,000 for 2008. Ms.
Pizzuto received 40% of this targeted amount or $57,600. Mr. Marsh’s
target incentive related to EPS was $144,000 for 2008. Mr. Marsh
received 40% of this targeted amount or $57,600. Mr. Kravas’ target
incentive related to EPS was $144,000 for 2008. Mr. Kravas received
40% of this targeted amount or $57,600.
All cash
compensation is approved by our Compensation Committee before it is paid to our
executive officers.
Long-Term Equity
Incentives. The Company’s Long-Term Equity 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. The Long-Term Equity Incentive Program
encourages participants to focus on long-term Company performance and provides
an opportunity for executive officers and certain designated key employees to
increase their ownership stake in the Company through grants of the Company’s
Class A Common Stock. The Company maintains the Hub Group, Inc.
1996 Long-Term Incentive Plan, 1997 Long-Term Incentive Plan, 1999 Long-Term
Incentive Plan and the Hub Group, Inc. 2002 Long-Term Incentive
Plan.
For the last few years, the Company has
made an annual grant of restricted stock to its executive
officers. The size of this grant was determined with the help of our
outside compensation consultant and was generally designed to be competitive
with the Compensation Peer Group. In October 2005, our Compensation
Committee discussed the proposed restricted stock grants which would be part of
the 2006 executive compensation package. After considering these
grants, our Compensation Committee approved the grants in late December
2005. Starting with this December 2005 grant, our Compensation
Committee agreed to keep the number of shares generally fixed for three years so
that executives, like stockholders, will be directly impacted by changes in our
stock price. For the 2007 compensation package and future years, our
Compensation Committee decided to make the annual restricted stock grants in
early January rather than in late December. For grants made in 2007
and prior years the restricted stock will vest over a period of three
years. For grants made in 2008, the restricted stock will vest over a
period of five years.
In
conducting the compensation review at the end of 2005, our outside consultants
and our Compensation Committee discussed the need for a substantial long-term
incentive grant to motivate superior long-term performance. After
discussing this issue for some time, on May 22, 2006, our Compensation Committee
granted performance units to certain of our executive officers. In
order for these performance units to be earned and converted to restricted stock
on a one for one basis, Hub Group’s combined operating income for 2006, 2007 and
2008 (the “Performance Period”) needed to total $254.7 million (the “Performance
Target”). No restricted stock was to be awarded and the performance
units were to be canceled and forfeited if we failed to meet the Performance
Target. If our Performance Target was met, but Hub Group’s operating
income for the Performance Period did not meet or exceed $283.0 million, the
performance units were to be earned, subject to our Compensation Committee
having the right to reduce to less than 100% the percentage of performance units
earned. If our operating income for the Performance Period equaled or
exceeded $283.0 million, then the performance units were to be fully earned and
not subject to a downward adjustment by the Compensation
Committee. Hub Group’s combined operating income for the Performance
Period was approximately $265.0 million. In February 2009, our
Compensation Committee reviewed Hub Group’s combined operating income for the
Performance Period and decided to exercise its downward discretion so that no
restricted stock was issued under this long-term incentive program.
Our Compensation Committee has
delegated to our Chief Executive Officer the ability to grant $500,000 of
restricted stock to non-executive officers each year. Our Chief
Executive Officer grants this stock from time to time to new hires or in
connection with a promotion or outstanding performance by current
employees. The Company has not granted any stock options since
2003.
Perquisites
and Other Compensation
Our
Company provides executive officers with perquisites and other personal benefits
that the Company and our Compensation Committee believe are reasonable and
consistent with its overall compensation program to better enable the Company to
attract and retain superior employees for key positions. Our Compensation
Committee periodically reviews the levels of perquisites and other personal
benefits provided to named executive officers.
The
perquisites and other compensation we provided in 2008 are as follows. All of
our named executive officers participated in our 401(k) plan and received
matching funds up to the federally allowed maximum match. We maintain
$50,000 of life insurance on all of our executive officers. The
Company maintains a non-qualified deferred compensation plan and provides a
matching contribution to participants. The Company also makes
available to its executive officers an annual physical at a local
hospital. The Company allows personal use of its fractional airplane
interests by certain executive officers. Personal use of our aircraft
interests requires approval by the Chief Executive Officer. Our
executives must reimburse the Company for their personal use of our aircraft
interests at the Standard Industry Fare Level plus either 20% or 30% depending
on the aircraft.
Retirement
and Other Benefits
Pension
Benefits
We do not
provide pension arrangements or subsidized post-retirement health coverage for
our executives or employees.
Non-Qualified
Deferred Compensation
Our
executive officers, in addition to certain other key managerial employees, are
entitled to participate in the Hub Group, Inc. Non-Qualified Deferred
Compensation Plan. Pursuant to this plan, eligible employees can
defer certain compensation on a pre-tax basis. The Hub Group, Inc.
Non-Qualified Deferred Compensation Plan is discussed in further detail under
the heading “Nonqualified Deferred Compensation” on page 22.
Other
Post-Employment Payments
All of
our executive officers are employees-at-will and as such do not have employment
contracts with us. Certain payments will be made upon a change of
control or the retirement of our executive officers. These payments
are discussed in further detail under “Potential Payouts upon Termination or
Change of Control” on page 24.
Ownership
Guidelines
To
directly align the interests of executive officers with the interests of the
stockholders, in the fall of 2006 our Board adopted a policy that requires each
executive officer to maintain a minimum ownership interest in the
Company. Each executive officer must own Company stock with a value
of at least two times their base annual salary. Each executive
officer has five years to meet this requirement. Until they do,
executive officers must retain a minimum of 25% of the stock granted to them in
any one year. Our independent directors have also agreed to maintain
stock valued at twice their annual retainer.
Tax
and Accounting Implications
Deductibility
of Executive Compensation
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 each unless certain requirements are
met. The policy of our Compensation Committee with respect to section
162(m) is to establish and maintain a compensation program which will optimize
the deductibility of compensation. Our Compensation Committee,
however, reserves the right to use its judgment, where merited by our
Compensation 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. For
2008, the amount of certain compensation in excess of $1 million for each of the
named executive officers was not deductible for federal income tax
purposes.
Section 274(e) of the Code limits
the Company's deduction for expenses allocated to certain personal use of its
fractional airplane interests. For 2008, such expenses, less amounts
reimbursed to the Company, were not deductible for federal income tax
purposes.
Compensation
Committee Report
This report is submitted by the
Compensation Committee of the Board of Directors.
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis and has recommended to the Board that it be
included in this Proxy Statement.
COMPENSATION
COMMITTEE
Gary D.
Eppen
Charles
R. Reaves
Martin P.
Slark, Chairman
2008
SUMMARY COMPENSATION TABLE
The
following table sets forth a summary of the annual, long-term and other
compensation for services rendered to the Company for the fiscal years ended
December 31, 2008, December 31, 2007 and December 31, 2006 paid or
awarded to those persons who were: (i) the Company’s chief executive officer at
December 31, 2008, (ii) the Company’s chief financial officer at December 31,
2008 and (iii) the Company’s three most highly compensated executive officers
other than the chief executive officer and chief financial officer
(collectively, together with the Company’s chief executive officer and chief
financial officer, the “Named Executive Officers”).
Name
and
Principal Position
|
Year
|
Salary($)
|
Bonus($)
|
Stock
Awards($)(1)
|
Option
Awards($)
|
Non-Equity
Incentive Plan Compensation(2) ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings(3)($)
|
All
Other Compen-sation (4)($)
|
Total($)
|
David
P. Yeager
Chairman
and Chief Executive Officer
|
2008
2007
2006
|
596,977(5)
574,867
558,123
|
--
--
--
|
410,096
306,690
219,351
|
--
--
--
|
137,968
500,134
669,748
|
--
51,229
43,204
|
173,442(6)
114,472
114,906
|
1,318,483
1,547,392 1,605,332
|
Mark
A. Yeager
Vice
Chairman, President and Chief Operating Officer
|
2008
2007
2006
|
414,854(5)
399,489
387,853
|
--
--
--
|
351,511
312,881
216,217
|
--
--
--
|
95,877
347,555
465,424
|
51,077
37,795
31,840
|
98,061(7)
72,175
46,743
|
1,011,380
1,169,895 1,148,077
|
Terri
A. Pizzuto
Executive
Vice President, CFO and Treasurer
|
2008
2007
|
311,538(5)
287,365
|
--
--
|
229,660
192,856
|
--
--
|
93,600
230,886
|
--
--
|
15,493(8)
14,984
|
650,291
726,091
|
David
L. Marsh
Chief
Marketing Officer
|
2008
2007
2006
|
311,538(5)
286,372
270,375
|
--
--
--
|
219,105
200,253
136,115
|
--
--
--
|
72,900
181,026
309,560
|
6,416
7,613
6,449
|
21,519(9)
19,104
19,451
|
631,478
94,368
741,950
|
Christopher
R. Kravas
Chief
Intermodal Officer
|
2008
|
311,538
(5)
|
--
|
175,755
|
--
|
73,800
|
1,876
|
16,828(10)
|
579,797
|
(1)
Consists of amounts expensed in 2008, 2007 and 2006 in accordance with FASB
Statement No. 123(R) with respect to restricted stock awards made by our Company
to our executives each with a vesting period of three years, except for awards
made in 2008 which vest over five years.
(2) In
addition to salary, our Compensation Committee provides an annual cash
incentive. Our annual cash incentive is determined with the
assistance of third party survey data and the value of the target award is
generally set at 60% of the executive’s annual salary. This incentive
is based solely on earnings per share (“EPS”) for our Chief Executive Officer
and President. For our other executive officers, this incentive is
based on a combination of EPS (80% in 2008 and 60% in 2007 and 2006) and on
individual performance compared against certain predetermined personal goals
(20% in 2008 and 40% in 2007 and 2006).
(3)
Represents above market earnings on deferred compensation.
(4)
Personal use of our aircraft requires approval by the Chief Executive
Officer. Our executives must reimburse the Company for their personal
use of our aircraft interest at the Standard Industry Fare Level plus either 20%
or 30% depending on the aircraft. We value the personal use of our
aircraft interests as the difference between the amount paid by the executive to
the Company for use of the plane and the aggregate incremental cost of using the
plane. The incremental cost includes the hourly flight fee, all fuel
charges, overnight fees, on-board catering, landing fees, parking fees, certain
taxes and passenger ground transportation. We do not include in
incremental costs the fixed costs that do not change based on personal usage,
such as monthly management fees or the purchase or lease costs of our fractional
interest in aircraft.
(5) None
of our executive officers received a salary increase for 2008. The
increase in salary is due to one additional pay period in 2008 versus 2007 and,
in the case of Ms. Pizzuto, Mr. Marsh and Mr. Kravas, due to a salary increase
during 2007 in connection with their promotions.
(6)
Represents our Company’s matching contribution to the Section 401(k) plan of
$6,545, the value of insurance premiums paid by the Company for term life
insurance equal to $48, the vested match made to Mr. Yeager’s account in our
original Deferred Compensation Plan equal to $29,560 and the match made to Mr.
Yeager’s account in our current Deferred Compensation Plan equal to
$17,246. Also represents Mr. Yeager’s personal use of our Company’s
fractional airplane interests equal to $120,043.
(7)
Represents our Company’s matching contribution to the Section 401(k) plan of
$6,545, the value of insurance premiums paid by the Company for term life
insurance equal to $48, the vested match made to Mr. Yeager’s account in our
original Deferred Compensation Plan equal to $9,450 and the match made to Mr.
Yeager’s account in our current Deferred Compensation Plan equal to
$11,985. Also represents Mr. Yeager’s personal use of our Company’s
fractional airplane interests equal to $70,033.
(8)
Represents our Company’s matching contribution to the Section 401(k) plan of
$6,445, the value of insurance premiums paid by the Company for term life
insurance equal to $48 and the match made to Ms. Pizzuto’s account in our
current Deferred Compensation Plan equal to $9,000.
(9)
Represents our Company’s matching contribution to the Section 401(k) plan of
$6,581, the value of insurance premiums paid by the Company for term life
insurance equal to $48, the vested match made to Mr. Marsh’s account in our
original Deferred Compensation Plan equal to $4,500, the match made to Mr.
Marsh’s account in our current Deferred Compensation Plan equal to $9,000 and
the value of an executive physical equal to $1,390.
(10)
Represents our Company’s matching contribution to the Section 401(k) plan of
$6,390, the value of insurance premiums paid by the Company for term life
insurance equal to $48, the match made to Mr. Kravas’s account in our current
Deferred Compensation Plan equal to $9,000 and the value of an executive
physical equal to $1,390.
2008
GRANTS OF PLAN-BASED AWARDS
|
|
|
Estimated
Future Payouts
Under
Non-Equity
Incentive Plan
Awards(1)
|
|
Estimated
Future Payouts Under Equity Incentive Plan
Awards
|
|
All
Other Stock Awards: Number of Shares of Stock or Units #
|
|
All
Other Option Awards: Number of Securities Underlying
|
|
Exercise
or Base Price of Option
|
|
Grant
Date Fair Value of Stock and Option Awards
|
|
Name
|
Grant Date
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
(2)
|
|
Options
(# )
|
|
Awards($/Sh)
|
|
($)
|
|
David
P. Yeager
|
1/2/2008
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
20,692
|
|
|
--
|
|
|
--
|
|
|
533,233
|
|
Mark
A. Yeager
|
1/2/2008
|
|
|
-- |
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
17,736
|
|
|
--
|
|
|
--
|
|
|
457,057
|
|
Terri
A. Pizzuto
|
1/2/2008
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
12,004 |
|
|
--
|
|
|
--
|
|
|
309,343
|
|
David
L. Marsh
|
1/2/2008
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
8,868
|
|
|
--
|
|
|
--
|
|
|
228,528
|
|
Christopher
R. Kravas
|
1/2/2008
|
|
|
-
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
8,868
|
|
|
--
|
|
|
--
|
|
|
228,528
|
|
(1) We do
not have any multi-year non-equity incentive plan awards. Our
non-equity incentive plan award is made on an annual basis based on a single
year’s performance. Please see Footnote 2 to the Summary Compensation
Table for a description of this plan.
(2)
Restricted stock that vests ratably annually on the date of grant over five
years.
Narrative
Description for Summary Compensation and Grants of Plan-Based Awards
Tables
On March
15, 2007, Ms. Pizzuto was appointed by the Board to the position of Executive
Vice President, Chief Financial Officer and Treasurer. In connection
with this promotion, and after considering compensation data provided by the Hay
Group, the Compensation Committee approved, upon the recommendation of Hub’s
CEO, an increase in Ms. Pizzuto’s base salary from $253,071 to $300,000 and an
increase in her annual cash incentive target from $151,843 to $180,000. Ms.
Pizzuto was also granted 2,004 shares of restricted stock on May 7, 2007 in
connection with her promotion. These restricted shares had a value of
$75,030 on the grant date. In late October 2007, Mr. Marsh was
promoted to our Chief Marketing Officer. In connection with this
promotion, the Compensation Committee approved, upon the recommendation of Hub’s
CEO, an increase in Mr. Marsh’s base salary from $283,894 to $300,000 and an
increase in his annual cash incentive target from $170,336 to $180,000,
pro-rated for 2007. In late October 2007, Mr. Kravas was promoted to
our Chief Intermodal Officer. In connection with this promotion, the
Compensation Committee approved, upon the recommendation of Hub’s CEO, an
increase in Mr. Kravas’ base salary from $273,182 to $300,000 and an increase in
his annual cash incentive target from $163,909 to $180,000, pro-rated for
2007.
As part
of the annual compensation package, our Compensation Committee grants restricted
Class A Common Stock to our executive officers. These awards are
generally based on merit and third party survey data.
In
October 2006, our Compensation Committee agreed to keep the number of shares
generally fixed for the 2006, 2007 and 2008 compensation packages so that
executives, like stockholders, will be directly impacted by changes in our stock
price. Consistent with this arrangement, all of the named executive
officers except for Ms. Pizzuto received the same number of restricted shares in
January 2007 as the prior year grant. Ms. Pizzuto received additional
shares due to her superior performance. In January 2008, Mr. David
Yeager, Mr. Mark Yeager and Mr. Kravas received the same number of shares as
2007. Ms. Pizzuto received additional shares due to her promotion to
Chief Financial Officer. Mr. Marsh received fewer shares, and a grant
more in line with his peers, as the truck brokerage service line did not grow as
substantially in 2007 as in prior years.
These
restricted shares are entitled to dividends to the same extent as ordinary
shares, but the dividends are restricted to the same extent as the underlying
security. Once the restricted stock vests, any dividends paid on that
stock also vest.
We do not
have employment agreements with our executive officers.
OUTSTANDING
EQUITY AWARDS AT DECEMBER 31, 2008
|
Option
Awards
|
Stock
Awards
|
|
Number
of
Securities
Underlying Unexercised Options
(#)
|
Number
of Securities Underlying Unexercised Options
(#)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
|
Option
Expiration
|
Number
of Shares or Units of Stock That Have Not Vested
|
Market
Value of Shares or Units of Stock That Have Not Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
|
Name
|
Exercisable
|
Unexercisable
|
(#)
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
David
P. Yeager
|
--
|
--
|
--
|
--
|
--
|
20,692(1)13,794
(2)
|
548,959
365,955
|
77,420
(4)
|
2,053,953
|
Mark
A. Yeager
|
--
|
--
|
--
|
--
|
--
|
17,736
(1)
11,824
(2)
|
470,536
313,691
|
64,516
(4)
|
1,711,609
|
Terri
A. Pizzuto
|
6,800
|
--
|
--
|
2.43
|
7/2/2012
|
12,004
(1)
6,666
(2)
1,336
(3)
|
318,466
176,849
35,444
|
43,010
(4)
|
1,141,055
|
David
L. Marsh
|
--
|
--
--
|
--
--
|
--
|
--
|
8,868
(1)
7,882
(2)
|
235,268
209,109
|
43,010
(4)
|
1,141,055
|
Christopher
R. Kravas
|
12,000
|
--
|
--
|
2.00
|
2/26/2012
|
8,868
(1)
5,912
(2)
|
235,268
156,845
|
43,010
(4)
|
1,141,055
|
(1)
Restricted stock remaining from a grant made on January 2, 2008 that vests
ratably annually on the date of grant over five years.
(2)
Restricted stock remaining from a grant made on January 2, 2007 that vests
ratably annually on the date of grant over three years.
(3)
Restricted stock remaining from a grant made on May 7, 2007 that vests ratably
annually on the date of grant over three years.
(4) On May 22, 2006, our
Compensation Committee granted performance units to certain of our executive
officers. In order for these performance units to be earned and
converted to restricted stock on a one for one basis, Hub Group’s combined
operating income for 2006, 2007 and 2008 (the “Performance Period”) needed to
total $254.7 million (the “Performance Target”). No restricted stock
was to be awarded and the performance units were to be canceled and forfeited if
we failed to meet the Performance Target. If our Performance Target
was met, but Hub Group’s operating income for the Performance Period did not
meet or exceed $283.0 million, the performance units were to be earned, subject
to our Compensation Committee having the right to reduce to less than 100% the
percentage of performance units earned. If our operating income for
the Performance Period equaled or exceeded $283.0 million, then the performance
units were to be fully earned and not subject to a downward adjustment by the
Compensation Committee. Hub Group’s combined operating income for the
Performance Period was approximately $265.0 million. In February
2009, our Compensation Committee reviewed Hub Group’s combined operating income
for the Performance Period and decided to exercise its downward discretion so
that no restricted stock was issued under this long-term incentive
program.
2008
OPTION EXERCISES AND STOCK VESTED
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number
of
Shares
Acquired
on
Exercise
|
|
Value
Realized
On
Exercise
|
|
|
Number
of
Shares
Acquired
on
Vesting
|
|
Value
Realized
on
Vesting
|
|
Name
|
|
|
(#) |
|
($)
|
|
|
|
(#) |
|
($)
|
|
David
P. Yeager
|
|
|
-- |
|
|
-- |
|
|
|
13,795 |
|
|
340,323 |
|
Mark
A. Yeager
|
|
|
-- |
|
|
-- |
|
|
|
11,824 |
|
|
291,698 |
|
Terri
A. Pizzuto
|
|
|
-- |
|
|
-- |
|
|
|
7,412 |
|
|
191,181 |
|
David
L. Marsh
|
|
|
-- |
|
|
-- |
|
|
|
7,883 |
|
|
194,474 |
|
Christopher
R. Kravas
|
|
|
-- |
|
|
-- |
|
|
|
5,912 |
|
|
145,849 |
|
2008
NONQUALIFIED DEFERRED COMPENSATION
Original
Deferred Compensation Plan
|
|
Executive
Contributions in Last FY
|
|
|
Registrant
Contributions in Last FY
|
|
|
Aggregate
Earnings in Last FY
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate
Balance
at
Last
FYE
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)(3)
|
|
David
P. Yeager
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
1,237,991 |
(2) |
|
|
-- |
|
Mark
A. Yeager
|
|
|
-- |
|
|
|
-- |
|
|
|
89,609 |
|
|
|
-- |
|
|
|
992,063 |
|
Terri
A. Pizzuto
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
David
L. Marsh
|
|
|
-- |
|
|
|
-- |
|
|
|
11,256 |
|
|
|
68,840 |
|
|
|
135,536 |
|
Christopher
R. Kravas
|
|
|
-- |
|
|
|
-- |
|
|
|
3,291 |
|
|
|
-- |
|
|
|
42,940 |
|
(1) That
portion of the interest that is above market is included in Change in Pension
Value and Nonqualified Deferred Compensation Earnings in the Summary
Compensation Table. A portion of the earnings is interest earned on a
matching contribution that has not yet vested and is subject to
forfeiture. The amount of interest reported that is subject to
forfeiture is $1,031 for Mr. Mark Yeager, $823 for Mr. Marsh and $759 for Mr.
Kravas.
(2)
Represents the total distribution of which $1,113,893 was transferred to our
current Deferred Compensation Plan and $124,098 was paid to Mr. David
Yeager.
(3) The
amount of compensation in the aggregate balance that was reported as
compensation in the 2008 Summary Compensation Table is $29,560 for Mr. David
Yeager, $60,527 for Mr. Mark Yeager, $10,916 for Mr. Marsh and $1,876 for Mr.
Kravas. The amount of compensation in the aggregate balance that was reported as
compensation in the 2007 Summary Compensation Table is $65,779 for Mr. David
Yeager, $43,072 for Mr. Mark Yeager and $11,696 for Mr. Marsh. The
amount of compensation in the aggregate balance that was reported as
compensation in the 2006 Summary Compensation Table is $59,378 for Mr. David
Yeager, $39,117 for Mr. Mark Yeager and $10,232 for Mr. Marsh.
Current
Deferred Compensation Plan
|
|
Executive
Contributions in Last FY
|
|
|
Registrant
Contributions in Last FY
|
|
|
Aggregate
Earnings in Last FY
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate
Balance
at
Last
FYE
|
|
Name
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
($)(4)
|
|
David
P. Yeager
|
|
|
1,443,026 |
(5) |
|
|
17,246 |
|
|
|
(772,450 |
) |
|
|
-- |
|
|
|
1,295,667 |
|
Mark
A. Yeager
|
|
|
114,361 |
|
|
|
11,985 |
|
|
|
(141,889 |
) |
|
|
-- |
|
|
|
352,581 |
|
Terri
A. Pizzuto
|
|
|
31,154 |
|
|
|
9,000 |
|
|
|
(29,726 |
) |
|
|
-- |
|
|
|
112,436 |
|
David
L. Marsh
|
|
|
110,090 |
|
|
|
9,000 |
|
|
|
(95,741 |
) |
|
|
-- |
|
|
|
180,938 |
|
Christopher
R. Kravas
|
|
|
47,247 |
|
|
|
9,000 |
|
|
|
(35,186 |
) |
|
|
-- |
|
|
|
151,170 |
|
(1)
Executive contributions (other than a transfer into this plan of $1,113,893 as
set forth in footnote 5) are included inSalary in the Summary Compensation
Table.
(2) Our
Company contributions are a match made subject to a cliff vesting requirement as
more fully explained below. Our Company contributions are included in
All Other Compensation in the Summary Compensation Table.
(3) None
of these earnings are included in the Summary Compensation Table as these are
earnings on investments made in various commonly available investment
vehicles.
(4) The
amount of compensation in the aggregate balance that was reported as
compensation in the 2008 Summary Compensation Table is $346,379 for Mr. David
Yeager, $126,346 for Mr. Mark Yeager, $40,154 for Ms. Pizzuto, $119,090 for Mr.
Marsh and $56,247 for Mr. Kravas. The amount of compensation in the
aggregate balance that was reported as compensation in the 2007 Summary
Compensation Table is $333,144 for Mr. David Yeager, $141,722 for Mr. Mark
Yeager, $37,737 for Ms. Pizzuto and $51,956 for Mr. Marsh. The amount
of compensation in the aggregate balance that was reported as compensation in
the 2006 Summary Compensation Table is $128,368 for Mr. David Yeager, $69,814
for Mr. Mark Yeager and $48,667 for Mr. Marsh.
(5)
$1,113,893 of this total represents a transfer of funds from the Original Plan
to the Current Plan. $329,133 of this total represents executive
contributions from salary and/or bonus.
We
maintain two non-qualified deferred compensation plans. Our
Compensation Committee adopted our first plan with an effective date of January
1, 2000 (the “Original Plan”). We allowed a select group of
management and highly compensated employees to make contributions to our
Original Plan through 2004. Our Compensation Committee adopted a new
non-qualified deferred compensation plan effective January 1, 2005 (the “Current
Plan”). We allowed a select group of management and highly
compensated employees to make contributions to our Current Plan beginning in
2005.
Our
Original Plan is not funded and provides for a fixed rate of return on our
employees’ deferrals and any match by our Company. We provided
participants with a fixed rate of return of 10% for contributions made in 2000
and 2001 and 8% for contributions made in 2002, 2003 and
2004. Participating employees could contribute up to 15% of their
cash compensation under the Original Plan. The Original Plan also
included a match by our Company. The match is equal to 50% of the
first 6% of contributions to the plan with a maximum match equivalent to 3% of
base salary. The match is subject to a five year cliff vest measured from the
date of the contribution. For example, if the employee made a
contribution in 2000, the match vested if the employee was still employed on
January 1, 2005. Subject to certain exceptions, we also pay interest
on the match at the same rate as the interest paid on the employees’
contribution. The interest on the match is subject to forfeiture if
the underlying match is forfeited and vests when our match vests. Any
deferral, including the match and all interest, made under the Original Plan
will be paid out upon the earlier of (i) the termination of such employee’s
employment or (ii) the payout date originally selected by the
employee.
Our
Current Plan is funded and does not provide for a fixed rate of
return. Each participating employee selects from a range of
investment options. We then provide an investment return equal to the
return from the selected investment options. The investment options
which may be selected by the participating employees track commonly available
investment vehicles, including mutual funds, bond funds and money market
funds. Participating employees can contribute up to 50% of their
salary and up to 100% of their annual cash incentive under the Current
Plan.
The
Current Plan also includes a match by our Company. The match is equal
to 50% of the first 6% of contributions to the plan with a maximum match
equivalent to 3% of base salary. The match for 2005, 2006 and 2007
has vested. The match for contributions made starting January 1, 2008
and future years will vest over three years on a cliff basis. For
example, an employee who contributed to the Current Plan in 2008 received a
match in early 2009 that will vest on January 1, 2011. The Company
match, if vested, and earnings thereon, is paid out seven months after
separation from service in either a lump sum or over a period of up to ten
years, at the employee’s election. The employee’s contributions, and
earnings thereon, are paid out upon separation from service or at a
predetermined date and may be paid out in a lump sum or over a period of up to
ten years. The match is subject to forfeiture if the participant
leaves the Company and goes to work for a competitor.
Potential
Payouts Upon Termination or Change of Control
As required, in the following section
we disclose the amount that would have been earned by our named executive
officers due to the vesting of our performance units assuming a change of
control on December 31, 2008. As we have elsewhere disclosed, in
February 2009 our Compensation Committee reviewed Hub Group’s combined operating
income for the three year performance period and decided to exercise its
downward discretion so that no restricted stock was issued under this long-term
incentive program.
David
P. Yeager, Chairman and CEO
Change
of Control
Mr.
Yeager has been granted performance units and various awards of restricted stock
under our Long-Term Incentive Plans. Pursuant to his award
agreements, this restricted stock vests upon a change of control and these
performance units will be fully earned and the corresponding restricted stock
will be granted and immediately vest upon a change of control. As of
December 31, 2008, Mr. Yeager owned 77,420 performance units and 34,486 shares
of restricted stock. Assuming the triggering event took place on the
last business day of 2008, the value of the performance units and restricted
stock would be $2,968,866.
Mr.
Yeager is a participant in our Current Deferred Compensation
Plan. Our Current Plan provides for the vesting of the Company match
and any earnings thereon upon a change of control. Assuming a change
of control as defined under this plan occurred on December 31, 2008, a total of
$17,246 worth of Company matching contributions and interest or earnings thereon
would have vested.
Mark
A. Yeager, Vice Chairman, President and COO
Change
of Control
Mr.
Yeager has been granted performance units and various awards of restricted stock
under our Long-Term Incentive Plans. Pursuant to his award
agreements, this restricted stock vests upon a change of control and these
performance units will be fully earned and the corresponding restricted stock
will be granted and immediately vest upon a change of control. As of
December 31, 2008, Mr. Yeager owned 64,516 performance units and 29,560 shares
of restricted stock. Assuming the triggering event took place on the
last business day of 2008, the value of the performance units and restricted
stock would be $2,495,836.
Mr.
Yeager is a participant in both of our non-qualified deferred compensation
plans. Our Original Plan provides for the vesting of the Company
match and any interest thereon upon a change of control. Our Current
Plan provides for the vesting of the Company match and any earnings thereon upon
a change of control. Assuming a change of control as defined under
these plans occurred on December 31, 2008, a total of $25,438 worth of Company
matching contributions and interest or earnings thereon would have
vested.
Retirement
Upon
retirement, which is defined as the termination of employment on or after the
age of 55, Mr. Yeager would be entitled to immediate vesting of any non-vested
employer match and interest thereon under our Original Deferred Compensation
Plan. As of December 31, 2008, Mr. Yeager was 44 years old and
therefore does not at this time qualify for this benefit.
Terri
A. Pizzuto, Executive Vice President, Treasurer and CFO
Change
of Control
Ms.
Pizzuto has been granted performance units and various awards of restricted
stock under our Long-Term Incentive Plans. Pursuant to her award
agreements, this restricted stock vests upon a change of control and these
performance units will be fully earned and the corresponding restricted stock
will be granted and immediately vest upon a change of control. As of
December 31, 2008, Ms. Pizzuto owned 43,010 performance units and 20,006 shares
of restricted stock. Assuming the triggering event took place on the
last business day of 2008, the value of the performance units and restricted
stock would be $1,671,814.
Ms.
Pizzuto is a participant in our Current Deferred Compensation
Plan. Our Current Plan provides for the vesting of the Company match
and any earnings thereon upon a change of control. Assuming a change
of control as defined under this plan occurred on December 31, 2008, a total of
$9,000 worth of Company matching contributions and interest or earnings thereon
would have vested.
David
L. Marsh, Chief Marketing Officer
Change
of Control
Mr. Marsh
has been granted performance units and various awards of restricted stock under
our Long-Term Incentive Plans. Pursuant to his award agreements, this
restricted stock vests upon a change of control and these performance units will
be fully earned and the corresponding restricted stock will be granted and
immediately vest upon a change of control. As of December 31, 2008,
Mr. Marsh owned 43,010 performance units and 16,750 shares of restricted
stock. Assuming the triggering event took place on the last business
day of 2008, the value of the performance units and restricted stock would be
$1,585,433.
Mr. Marsh
is a participant in both of our non-qualified deferred compensation
plans. Our Original Plan provides for the vesting of the Company
match and any interest thereon upon a change of control. Our Current
Plan provides for the vesting of the Company match and any earnings thereon upon
a change of control. Assuming a change of control as defined under
these plans occurred on December 31, 2008, a total of $19,745 worth of Company
matching contributions and interest or earnings thereon would have
vested.
Retirement
Upon
retirement, which is defined as the termination of employment on or after the
age of 55, Mr. Marsh would be entitled to immediate vesting of any non-vested
employer match and interest thereon under our Original Deferred Compensation
Plan. As of December 31, 2008, Mr. Marsh was 41 years old and
therefore does not at this time qualify for this benefit.
Christopher
R. Kravas, Chief Intermodal Officer
Change
of Control
Mr.
Kravas has been granted performance units and various awards of restricted stock
under our Long-Term Incentive Plans. Pursuant to his award
agreements, this restricted stock vests upon a change of control and these
performance units will be fully earned and the corresponding restricted stock
will be granted and immediately vest upon a change of control. As of
December 31, 2008, Mr. Kravas owned 43,010 performance units and 14,780 shares
of restricted stock. Assuming the triggering event took place on the
last business day of 2008, the value of the performance units and restricted
stock would be $1,533,169.
Mr.
Kravas is a participant in both of our non-qualified deferred compensation
plans. Our Original Plan provides for the vesting of the Company
match and any interest thereon upon a change of control. Our Current
Plan provides for the vesting of the Company match and any earnings thereon upon
a change of control. Assuming a change of control as defined under
these plans occurred on December 31, 2008, a total of $18,909 worth of Company
matching contributions and interest or earnings thereon would have
vested.
Retirement
Upon
retirement, which is defined as the termination of employment on or after the
age of 55, Mr. Kravas would be entitled to immediate vesting of any non-vested
employer match and interest thereon under our Original Deferred Compensation
Plan. As of December 31, 2008, Mr. Kravas was 43 years old and
therefore does not at this time qualify for this benefit.
Definition
of “Change of Control”
For purposes of the foregoing
discussion, a change of control under the Original Deferred Compensation Plan is
defined as a change in the ownership or effective control of the Company, or a
substantial portion of the Company’s assets as defined in section 409A of the
Internal Revenue Code of 1986, as amended from time to time. Under
all other plans described above a change of control is defined for these
purposes as a change in the beneficial ownership of the Company's voting stock
or a change in the composition of the Board which occurs as follows: (i) Any
“person” (as such term is used in Section 13(d) and 14(d)(2) of the Exchange
Act) who is not as of the date of this grant but later becomes a beneficial
owner, directly or indirectly, of stock of the Company representing 30 percent
or more of the total voting power of the Company's then outstanding stock; or
(ii) A tender offer (for which a filing has been made with the SEC which
purports to comply with the requirements of Section 14(d) of the Exchange Act
and the corresponding SEC rules) is made for the stock of the Company, which has
not been negotiated and approved by the Board. In case of a tender offer
described in this paragraph, the change in control will be deemed to have
occurred upon the first to occur of (A) any time during the offer when the
person (using the definition in (i) above) making the offer owns or has accepted
for payment stock of the Company with 25 percent or more of the total voting
power of the Company's stock, or (B) three business days before the offer is to
terminate unless the offer is withdrawn first, if the person making the offer
could own, by the terms of the offer plus any shares owned by this person, stock
with 50 percent or more of the total voting power of the Company's stock when
the offer terminates; or (iii) Individuals who were the Board’s nominees for
election as directors of the Company immediately prior to a meeting of the
stockholders of the Company involving a contest for the election of directors
shall not constitute a majority of the Board following the
election.
The following table sets forth a
summary of the compensation for services rendered to the Company for the fiscal
year ended December 31, 2008 for the Company’s independent
directors.
|
|
Fees
Earned or
Paid
in
Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive
Plan
Compensation
|
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
|
|
|
All
Other
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Earnings
|
|
|
($)
|
|
|
($)
|
|
Gary
D. Eppen
|
|
|
60,000 |
|
|
|
82,509 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
1,800 |
(1) |
|
|
144,309 |
|
Charles
R. Reaves
|
|
|
60,000 |
|
|
|
82,509 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
142,509 |
|
Martin
P. Slark
|
|
|
60,000 |
|
|
|
82,509 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
142,509 |
|
(1) Mr. Eppen
contributed to our Deferred Compensation Plan in 2008 and received a match of
$1,800 for 2008.
Mr. Eppen
has no options, 2,365 shares of restricted stock remaining from a grant made on
January 2, 2007 that vests ratably over three years and 3,548 shares of
restricted stock remaining from a grant made on January 2, 2008 that vests
ratably over three years. Mr. Reaves has no options, 2,365 shares of
restricted stock remaining from a grant made on January 2, 2007 that vests
ratably over three years and 3,548 shares of restricted stock remaining from a
grant made on January 2, 2008 that vests ratably over three years. Mr. Slark has
24,000 exercisable options, 2,365 shares of restricted stock remaining from a
grant made on January 2, 2007 that vests ratably over three years and 3,548
shares of restricted stock remaining from a grant made on January 2, 2008 that
vests ratably over three years.
Directors who are not our employees
received $60,000 for serving as a director during 2008. Directors who are our
employees 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 connection
with their 2008 compensation package, on January 2, 2008, Messrs. Eppen, Reaves
and Slark each received a grant of 3,548 shares of restricted Class A Common
Stock with a value on the date of grant of $91,432. This restricted
stock vests ratably over a three-year period.
Transactions
with Related Persons
We paid Systems Delivery, Inc., solely
owned by Mr. Timothy Wood, who is the brother-in-law of Mr. Mark Yeager,
approximately $160,561 in 2008 to provide information technology consulting
services. This transaction was approved in advance by our Nominating and
Governance Committee.
Audit
Committee Report
Management has primary
responsibility for the Company’s internal control and financial reporting
process, and for making an assessment of the effectiveness of the Company’s
internal control over financial reporting. Ernst & Young LLP is
responsible for performing an independent audit of the Company’s (i)
consolidated financial statements in accordance with the standards of the Public
Company Accounting Oversight Board (“PCAOB”) and (ii) the Company’s internal
control over financial reporting and to issue an opinion on those financial
statements and internal control over financial reporting. The Audit
Committee’s responsibility is to monitor and oversee these
processes.
The Audit Committee has reviewed and
discussed the Company’s quarterly and annual audited financial statements with
management and with Ernst & Young LLP, the Company’s independent public
accountants. The Company has also discussed with Ernst & Young
LLP the matters required to be discussed by Statement on Auditing Standards No.
61, Communication with Audit Committees, as amended, as adopted by the Auditing
Standards Board of the American Institute of Certified Public
Accountants. The Audit Committee has also received from Ernst &
Young LLP the written communication and the letter required by applicable
requirements of the PCAOB regarding Ernst & Young LLP’s communication with
the Audit Committee concerning independence. The Audit Committee has
discussed with Ernst & Young LLP their independence and considered whether
the provision of non-audit services referred to under “Independent Public
Accountants” on page 29 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,
2008 audited financial statements be included in the Company’s Annual Report on
Form 10-K for 2008.
AUDIT COMMITTEE
Gary D. Eppen, Chairman
Charles R. Reaves
Martin P. Slark
INDEPENDENT
PUBLIC ACCOUNTANTS
The Audit
Committee has selected Ernst & Young LLP as the independent accountant of
the Company. Representatives of Ernst & Young 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.
The fees billed by Ernst & Young in
2007 and 2008 for services provided to us were as follows:
|
|
2007
|
|
|
2008
|
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
|
$ |
826,400 |
|
|
$ |
805,328 |
|
Audit-Related
Fees (2)
|
|
|
161,900 |
|
|
|
-- |
|
Tax
Fees (3)
|
|
|
9,836 |
|
|
|
-- |
|
All
Other Fees (4)
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$ |
998,136 |
|
|
$ |
805,328 |
|
|
|
|
|
|
|
|
|
|
(1) “Audit
Fees” are the aggregate fees billed by Ernst & Young for professional
services rendered for the audit of the Company’s annual financial statements for
the years ended December 31, 2008 and December 31, 2007, the audit of the
effectiveness of the Company’s internal control over financial reporting as of
December 31, 2008 and December 31, 2007, the reviews of the financial statements
included in the Company’s quarterly reports on Form 10-Q during 2008 and 2007,
and consultation with respect to various accounting and financial reporting
matters during 2008 and 2007.
(2) “Audit-related
fees” include fees billed for assurance and related services that are reasonably
related to the performance of the audit and not included in the “audit fees”
described above. The 2007 Audit-related fees include audit services
performed in connection with potential acquisitions.
(3) “Tax
Fees” are fees billed by Ernst & Young in 2007 for review of deferred
compensation arrangements.
(4) “All
Other Fees” are fees billed by Ernst & Young in 2008 or 2007 that are not
included in the above classifications.
The Audit
Committee must pre-approve any audit or any permissible non-audit services to be
provided by the Company’s independent auditors, and has established pre-approval
policies and procedures for such services. Permissible non-audit services are
those allowed under the regulations of the Securities and Exchange Commission.
The Audit Committee may approve, at the beginning of each year, certain specific
categories of permissible non-audit services within an aggregated budgeted
dollar limit. The Audit Committee must approve on a project-by-project basis any
permissible non-audit services that do not fall within a pre-approved category,
or pre-approved permissible non-audit services that exceed the previously
approved fees. All services provided by Ernst & Young during 2008 were
approved by the Audit Committee and were permissible under applicable laws and
regulations and will continue to be pre-approved by the Audit
Committee.
PROXY
SOLICITATION EXPENSE
The
Company will pay the expense of any proxy solicitation. In addition
to the solicitation of proxies by use of the mail, 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 November 25, 2009,
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.
The
Company anticipates that its next annual meeting of stockholders will be held in
May 2010. 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 5,
2010 nor later than March 7, 2010. 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
Downers
Grove, Illinois
March 25,
2009
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.
HUB
GROUP, INC.
This
Proxy is Solicited on Behalf of the Board of Directors
for
the Annual Meeting of Stockholders to be held on May 6, 2009
The
undersigned appoints David P. Yeager and Mark A. Yeager, or either of them,
proxies for the undersigned, each with full power of substitution, to attend the
Annual Meeting of Stockholders of Hub Group, Inc., to be held on May 6, 2009 at
10:00 a.m., Chicago time, and at any adjournments or postponements of the Annual
Meeting, and to vote as specified in this Proxy all of the Class A Common Stock
of the Company which the undersigned would be entitled to vote if personally
present. This Proxy when properly executed will be voted in accordance with your
indicated directions. If no direction is made, this Proxy will be voted FOR the
election of each of the nominees for the Board of Directors.
The Board
of Directors recommends a vote FOR the election of each of the nominees for the
Board of Directors.
YOUR
VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND
RETURN
IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(Continued
and to be signed on reverse side)
FOLD
AND DETACH HERE
ANNUAL MEETING OF STOCKHOLDERS OF
HUB
GROUP, INC.
May 6, 2009
NOTICE
OF INTERNET AVALABILTY OF PROXY MATERIAL:
The Annual Report to Stockholders, Notice of
Meeting, Proxy Statement and Proxy Card
are available at
www.hubgroup.com/proxy.html
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
THIS
PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED
“FOR” THE PROPOSALS.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK
INK AS SHOWN HERE X
1.
Election of Directors
Nominees:
___ David
P. Yeager
___ Mark
A. Yeager
___ Gary
D. Eppen
___
Charles R. Reaves
___
Martin P. Slark
___ For All Nominees
___ Withhold Authority For All Nominees
___ For All Except (see instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and
fill in the circle next to each nominee you wish to withhold, as shown
here: X
The
undersigned hereby acknowledges receipt of the
Proxy Statement and Form 10-K.
Signature
of Stockholder________________________Date ______Signature of
Stockholder_____________________Date________
NOTE: Please sign exactly as your name or names
appear on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name by
authorized person.