0000790372-95-000008.txt : 19950815 0000790372-95-000008.hdr.sgml : 19950815 ACCESSION NUMBER: 0000790372-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MS CARRIERS INC CENTRAL INDEX KEY: 0000790372 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 621014070 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14781 FILM NUMBER: 95563305 BUSINESS ADDRESS: STREET 1: 3171 DIRECTORS ROW STREET 2: P O BOX 30788 CITY: MEMPHIS STATE: TN ZIP: 38131 BUSINESS PHONE: 9013322500 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1995 Commission file Number 0-14781 M.S. CARRIERS, INC. (Exact name of Registrant as specified in its charter.) Tennessee 62-1014070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3171 Directors Row, Memphis, TN 38131 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (901) 332-2500 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Outstanding common shares at August 1, 1995 - 12,878,300 M.S. Carriers, Inc. Index to Form 10-Q Contents Part I - Financial Information Item I - Financial Statements (Unaudited) Balance Sheets as of June 30, 1995 and December 31, 1994................. 3 Statement of Income for the Three Months Ended June 30, 1995 and 1994 and the Six Months Ended June 30, 1995 and 1994............... 5 Statement of Stockholders' Equity for the Six Months Ended June 30, 1995........................................................... 6 Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994.................................................. 7 Notes to Financial Statements............................................. 8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 9 Part II - Other Information Item 1 - Legal Proceedings................................................ * Item 2 - Changes in Securities............................................ * Item 3 - Defaults Upon Senior Securities.................................. * Item 4 - Submission of Matters to a Vote of Security Holders.............. 11 Item 5 - Other Information................................................ * Item 6 - Exhibits and Reports on Form 8-K................................. 12 Signatures................................................................ 13 * No Information Submitted Under This Caption. M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets
June 30 December 31 1995 1994 _________________________________________ (Unaudited) Assets Current assets: Cash and cash equivalents $ 15,996,585 $ 30,806,731 Accounts receivable: Trade, net 28,187,329 33,327,599 Officers and employees 728,194 457,165 ____________ ____________ 28,915,523 33,784,764 Recoverable income taxes 449,047 Deferred income taxes 5,250,000 4,774,000 Prepaid expenses and other 6,467,861 4,419,081 ____________ ____________ Total current assets 57,079,016 73,784,576 Property, plant and equipment: Land and land improvements 6,221,980 6,201,674 Buildings 24,042,742 23,393,800 Revenue equipment 249,581,427 232,771,820 Service equipment and other 31,699,238 28,531,425 Construction in progress 4,764,105 2,813,438 ____________ ____________ 316,309,492 293,712,157 Accumulated depreciation and amortization 99,414,857 95,019,410 ____________ ____________ 216,894,635 198,692,747 Other assets 3,862,070 3,595,196 ____________ ____________ Total assets $277,835,721 $276,072,519 ____________ ____________ ____________ ____________
M.S. Carriers, Inc. and Subsidiaries Consolidated Balance Sheets (continued)
June 30 December 31 1995 1994 _________________________________________ (Unaudited) Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 6,452,877 $ 6,341,525 Accrued expenses 8,084,231 8,277,724 Claims payable 13,435,756 12,325,226 Incomes taxes payable 1,256,186 Current maturities of long-term debt 17,120,458 16,693,512 ____________ ____________ Total current liabilities 45,093,322 44,894,173 Long-term debt, less current maturities 42,512,318 51,186,613 Deferred income taxes 34,716,045 32,068,000 Stockholders' equity: Common stock, $.01 par value, Authorized shares - 20,000,000 128,783 128,783 Issued and outstanding shares - 12,878,300 in 1995 and 1994 Additional paid-in capital 64,137,909 64,137,909 Retained earnings 92,630,469 84,842,041 Equity adjustment from foreign currency translation (1,383,125) (1,185,000) ____________ ____________ Total stockholders' equity 155,514,036 147,923,733 Total liabilities and stockholders' equity $277,835,721 $276,072,519 ____________ ____________ ____________ ____________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended June 30 June 30 1995 1994 1995 1994 ____________________________________________________________ Operating revenues $ 84,541,100 $ 69,558,611 $166,242,470 $129,991,031 Operating expenses: Salaries, wages and benefits 31,072,636 26,482,495 62,464,395 51,055,008 Operations and maintenance 16,798,796 15,786,300 33,865,691 31,372,304 Taxes and licenses 2,617,212 2,136,303 5,089,288 4,094,222 Insurance and claims 4,030,613 3,590,805 7,656,195 6,501,179 Communications and utilities 1,522,238 876,570 3,002,295 2,066,308 Depreciation and amortization 9,852,236 8,219,784 19,197,369 15,821,415 Rent and purchased transportation 10,825,064 4,283,171 19,771,690 6,114,328 Other 502,765 486,713 1,148,210 956,328 ____________ ____________ ____________ ____________ $ 77,221,560 $ 61,862,141 $152,195,133 $117,981,092 ____________ ____________ ____________ ____________ Operating income 7,319,540 7,696,470 14,047,337 12,009,939 Other expense (income): Interest expense 1,018,854 418,894 1,933,139 729,553 Other (35,176) (42,136) (100,353) (62,263) ____________ ____________ ____________ ____________ 983,678 376,758 1,832,786 667,290 ____________ ____________ ____________ ____________ Income before income taxes 6,335,862 7,319,712 12,214,551 11,342,649 Income taxes 2,311,123 2,901,000 4,426,123 4,503,000 ____________ ____________ ____________ ____________ Net income $ 4,024,739 $ 4,418,712 $ 7,788,428 $ 6,839,649 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ Earnings per share $0.31 $0.34 $0.59 $0.52 ____________ ____________ ___________ ___________ ____________ ____________ ___________ ___________
See accompaning notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statement of Stockholders' Equity (Unaudited) Six Months Ended June 30, 1995
Equity Adjustment From Additional Foreign Common Stock Paid-In Retained Currency Shares Amount Capital Earnings Translation Total __________________________________________________________________________ Balance at January 1, 1995 12,878,300 $128,783 $64,137,909 $84,842,041 $ (1,185,000) $147,923,733 Net Income 7,788,428 7,788,428 Equity Adjustment from Foreign Currency Translation (198,125) (198,125) __________________________________________________________________________ Balance at June 30, 1995 12,878,300 $128,783 $64,137,909 $92,630,469 $ (1,383,125) $155,514,036 __________________________________________________________________________ __________________________________________________________________________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30 1995 1994 ___________________________________________ Operating activities Net income $ 7,788,428 $ 6,839,649 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,197,369 15,821,415 Loss on disposals of property and equipment 97,015 Provision for losses on accounts receivable 111,354 Other 107,874 Provision for deferred income taxes 2,172,045 2,650,000 Changes in operating assets and liabilities: Accounts receivable 4,869,241 (4,501,812) Current and other assets (3,113,001) (872,817) Trade accounts payable 111,352 1,649,621 Other current liabilities (339,149) 1,947,945 _____________ ____________ 23,005,731 16,902,721 _____________ ____________ Net cash provided by operating activities 30,794,159 23,742,370 Investing activities Purchases of property, plant and equipment (37,742,895) (33,486,830) Proceeds from disposals of property and equipment 385,939 4,623 _____________ ____________ Net cash used in investing activities (37,356,956) (33,482,207) Financing activities Proceeds from revolving line of credit and long-term debt 44,653,716 Proceeds from issuance of Common Stock 19,183 Principal payments on revolving line of credit and long-term debt (8,247,349) (34,840,716) _____________ _____________ Net cash provided by (used in) financing activities (8,247,349) 9,832,183 _____________ _____________ Increase (decrease) in cash and cash equivalents (14,810,146) 92,346 Cash and cash equivalents at beginning of period 30,806,731 110,080 _____________ _____________ Cash and cash equivalents at end of period $ 15,996,585 $ 202,426 _____________ ______________ _____________ ______________
See accompanying notes. M.S. Carriers, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) June 30, 1995 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information and a listing of the Company's significant accounting policies, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. 2. Net Income Per Common Share
Three Months Ended Six Months Ended June 30 June 30 1995 1994 1995 1994 _________________________________________________________ Average common shares outstanding 12,878,300 12,878,300 12,878,300 12,877,327 Common stock equivalents 201,208 190,033 212,362 222,050 ____________ ____________ ____________ ___________ Average common shares and common stock equivalents 13,079,508 13,068,333 13,090,662 13,099,377 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________ Net income $ 4,024,739 $ 4,418,712 $ 7,788,428 $ 6,839,649 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________ Net income per common and equivalent share $0.31 $0.34 $0.59 $0.52 ____________ ____________ ____________ ___________ ____________ ____________ ____________ ___________
M.S. Carriers, Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations June 30, 1995 Results of Operations Operating revenues for the first six months of 1995 increased 28% over the same period in the prior year. For the quarter ended June 30, 1995, operating revenues increased 22% over the same quarter of 1994. The Company's increased revenues reflect additional volume from existing customers as well as new volume from the expansion of the Company's customer base. The operating ratio (operating expenses as a percent of operating revenues) for the first six months of 1995 was 92% compared to 91% for the same period in 1994 and was 91% for the second quarter of 1995 compared to 89% for the same period in 1994. Operating expenses generally reflect increases proportionate to the increased level of operations except as explained below. Salaries, wages and benefits decreased from 38% and 39%, respectively, of operating revenues for the three and six-month periods ended June 30, 1994 to 37% and 38%, respectively, for the same periods in 1995, due primarily to the increased use of owner operators. Amounts paid to owner operators are recorded as purchased transportation. Operations and maintenance decreased from 23% and 24%, respectively, of operating revenues for the three and six-month periods ended June 30, 1994 to 20% for the three and six-month periods ended June 30, 1995, due primarily to the increased use of owner operators. Rent and purchased transportation increased from 6% of operating revenues for the three-month period ended June 30, 1994 to 13% for the same period in 1995 and from 5% of operating revenues for the six-month period ended June 30, 1994 to 12% for the same period in 1995. These increases reflect increased expenses incurred related to the Company's logistics operations and expenses incurred in conjunction with the increased use of owner operators. The increase in interest expense is due to the increase in outstanding debt during the six-months ended June 30, 1995 compared to the same period in 1994. The effective tax rates were 36.2% and 39.7% for the six-month period ended June 30, 1995 and 1994, respectively. This decrease was due to reduced state income taxes and tax benefits from leasing transactions. Liquidity and Capital Resources The continued growth of the Company's business has required significant investments in new revenue equipment and office and terminal facilities, historically financed through cash from operations, secured borrowings, unsecured credit facilities, and capital markets. During the six-month period ending June 30, 1995, the Company expended in excess of $37,000,000 for purchases of property, plant and equipment funded solely through cash from operations and cash on hand at December 31, 1994. At June 30, 1995, the Company had obligations of approximately $60,000,000 related to purchases of revenue equipment. The Company has a bank line of credit providing for borrowings of up to $10,000,000, with interest at the lower of the bank's corporate prime rate or the 30-day LIBOR rate plus .45%. At June 30, 1995 there were no amounts outstanding under this line of credit. Management expects to maintain this line of credit for an indefinite period. The Company expects to finance its normal operating requirements and future revenue equipment purchases through cash from operations and secured borrowings. PART II - Other Information Item 4 - Submission of Matters to a Vote of Security Holders At the Company's annual meeting of shareholders on May 5, 1995, Michael S. Starnes, Carl J. Mungenast, James W. Welch, M.J. Barrow, Robert P. Hurt, Gary S. Hardeman, Morris H. Fair and Jack H. Morris, III, were re-elected as directors upon a vote of 9,805,188 for, 2,900 against and 99,200 abstaining. The Non-Employee Director's Stock Option Plan was approved at the meeting upon a vote of 9,793,308 for, 93,590 against and 20,340 abstaining. No other matters were submitted to a vote of security holders during the second quarter of 1995. PART II - Other Information Item 6 - Exhibits and Reports on Form 8-K (a) The exhibits filed as a part of this report are listed below: Exhibit Number Description of Exhibit _____________________________________________________________________________ 3A Restated Charter of M.S. Carriers, Inc.* 3B Articles of Amendment to Charter of M.S. Carriers, Inc.** 3C Amended and Restated By-Laws of M.S. Carriers, Inc.** 10A Incentive Stock Option Plan* 10B Amendment to Incentive Stock Option Plan* 10C 1993 Stock Option Plan** 10D Non-Employee Directors Stock Option Plan*** 10E Employment Agreements with James W. Welch, M.J. Barrow and Robert P. Hurt* 10F Employment Agreement with Michael S. Starnes 10G Employment Agreement with Carl J. Mungenast 10H 1993 Incentive Plan for Designated Key Employees 11 Statement regarding computation of per share earnings 27 Financial Data Schedule * Incorporated by references from exhibits to the Registrant's Registration Statement on Form S-1 (Registration Number 33-12070). ** Incorporated by references from exhibits to the Registrant's Registration Statement on Form S-3 (Registration Number 33-63280). *** Incorporated by reference from Registrant's Proxy Statement dated March 31, 1995. (b) The Company did not file any reports on Form 8-K during the three months ended June 30, 1995. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. M.S. Carriers, Inc. (Registrant) August 14, 1995 Dwight Bassett Date Dwight Bassett, Controller (Principal Financial Officer of the Company) INDEX TO EXHIBITS Exhibit Sequential Number Description Page Number __________________________________________________________________________ 10F Employment Agreement with 15 Michael S. Starnes 10G Employment Agreement with 19 Carl J. Mungenast 10H 1993 Incentive Plan for 24 Designated Key Employees 11 Statement regarding computation 8 of per share earnings -- See Note 2 of the notes to financial statements included in Part I
EX-10 2 EMPLOYMENT AGREEMENT WITH MICHAEL S. STARNES EMPLOYMENT AGREEMENT -------------------- THIS AGREEMENT, made and entered into this 31st day of May, 1987, by and between M.S. CARRIERS, INC., a Tennessee corporation (the "Company"), and MICHAEL S. STARNES, a resident of Memphis, Tennessee (the "Employee"); W I T N E S S E T H: WHEREAS, the Company has employed the Employee as its Chairman of the Board, President and Chief Executive Officer; and WHEREAS, the Company desires to continue to employ Employee and Employee desires to remain in the Company's employment, all in accordance with the terms, provisions, conditions and covenants herein contained; and WHEREAS, the Company desires to protect its business by having Employee enter into this Agreement, and Employee by the execution of this Agreement acknowledges the reasonableness thereof and his willingness to be bound by the terms and conditions hereof; NOW, THEREFORE, in consideration of the premieses and of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties do agree as follows: 1. EMPLOYMENT. The Company agrees to employ Employee, and Employee ---------- accepts employment by the Company and agrees to perform such duties as may, from time to time, be assigned to Emploee by Company. Employee agrees to devote his full time, attention and best efforts in the faithful discharge of such duties and in the devlopment and furtherance of Company's business. Employee agrees that, as long as he is employed by Company, he will not undertake the planning or organizing of any business activity competitive with the Company's nor engage in any such activity. The term of Employee's employment hereunder shall commence on the date hereof and shall continue thereafter until either party shall have given the other party at least thirty (30) days prior written notice that the party giving such notice wishes to terminate Employee's employment hereunder. 2. COMPENSATION. ------------ (a) Base Salary. ----------- (1) Company agrees to accrue compensation to Employee until January 1, 1988, at the rate of $23314.28/100 Dollars ($23314.28) per month. Such accrue compensation shall be paid to Employee on February 1, 1988; provided, however, in the event that Employee dies prior to February 1, 1988, such accrue compensation shall be paid to his wife, NANCY B. STARNES, if she is living, or to Employee's estate if his wife is not then living. (2) Commencing January 1, 1988, the Employee's annual base salary shall be determined by the Company, and shall be paid to Employee in regular installments in accordance with the Company's usual payroll procedures. (b) Discretionary Bonus. In addition to the base salary, Employee ------------------- shall be eligible to receive such bonus, from time to time, as the Board of Directors of the Company, in the Board's sole discretion, shall determine. Payment of such discretionary bonus, if any, shall be made at such time as the Board shall determine, provided, that nothing herein shall be construed to grant the Employee a right to a bonus. (c) Employee Benefits. Employee shall be eligible to participate in ----------------- such employee benefit plans as the Company may make available to its employees in general from time to time, provided that the Employee shall meet the eligibility requirements of such plans. In addition to participation in such employee benefit plans, Employee shall be eligible for such further benefits as the Board of Directors shall determine. (d) Expense Reimbursement. Company shall reimburse to Employee all --------------------- ordinary and necessary business expenses incurred directly in connection with his employment duties hereunder, provided Employee shall satisfactorily substantiate, in such detail as reasonably necessary, the business relationship of such expenses. 3. NOTICE. All notices and other communications provided for by this ------ Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by United States certified or registered mail, postabe prepaid, return receipt requested; If to Company: M.S. Carriers, Inc. 3150 Starnes Cove Memhis, Tennessee 38116 Attention: Secretary If to Employee: Michael S. Starnes 1450 Massey Road, West Memphis, Tennessee 38119 Or such other address as either party may be hereafter from time to time specify in writing to the other party. 4. ASSIGNMENT. This Agreement shall not be assignable by Employee. ---------- 5. BINDING EFFECT. This Agreement shall incure to the benefit of and be binding upon the Company, its sucessors and assigns, including without limitation, any person, partnership, company or corporation which may acquire substantially all of the Company's assets or business or with or into which the Company may be liquidated, consolidated, merged or otherwise combined, and shall inure to the benefit of and be binding upon Employee and his heirs, beneficiaries, executors and administrators. 6. VALIDITY. The validity, instruction, interpretation or performance -------- of this Agreement shall be governed by the laws of the State of Tennessee. 7. ENTIRE AGREEMENT. This Agreement supercedes all previous agreements ---------------- between Employee and Company and contains the entire understanding and agreement between the parties with respect to the subject matter hereof. The Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by both parties. IN WITNESS WHEREOF, the parties have executed this Agreement, in duplicate, the day and year first above written. COMPANY: M.S. CARRIERS, INC. By: Michael S. Starnes MICHAEL S. STARNES, Chairman of the Board ATTEST: EMPLOYEE: M.J. Barrow By: Michael S. Starnes Secretary MICHAEL S. STARNES EX-10 3 EMPLOYMENT AGREEMENT WITH CARL J. MUNGENAST EMPLOYMENT AGREEMENT This Agreement, made and entered into this 1st day of April, 1994, by and between M.S. CARRIERS, INC., a Tennessee corporation (the "Company") and CARL J. MUNGENAST, a resident of Memphis, Tennessee (the "Employee"): W I T N E S S E T H: WHEREAS, the Company has agreed to employ the Employee as its Executive Vice President; and WHEREAS, the Company desires to continue to employ Employee and Employee desires to remain in the Company's employment, all in accordance with the terms, provisions, conditions and covenants herein contained; and WHEREAS, the Company desires to protect its business by having Employee enter into this Agreement, and Employee by the execution of this Agreement acknowledges the reasonableness thereof and his willingness to be bound by the terms and conditions hereof; and NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties do agree as follows: 1. EMPLOYMENT. The Company agrees to employ Employee, and Employee accepts employment by the Company and agrees to perform such duties as may, from time to time, be assigned to Employee by Company. Employee agrees to devote his full time, attention and best efforts in the faithful discharge of such duties and in the development and furtherance of Company's business. Employee agrees that, as long as he is employed by Company, he will not undertake the planning or organizing of any business activity competitive with the Company's nor engage in any such activity. The term of Employee's employment hereunder shall commence on the date hereof and shall be one (1) year. Employee's term of employment shall continue thereafter until terminated by the first to occur of the following events: (a) Employee's Death, Disability or Retirement. "Disability," for purposes of this Agreement, shall mean the inability of Employee due to illness, accident or other physical or mental incapacity, to perform his usual duties and services provided hereunder, for a period of ninety (90) days or such longer period under the Company's short-term disability policy, as it applies to Employee, at the time of his termination hereunder. "Retirement," for purposes of this Agreement, shall mean termination in accordance with the Company's retirement policy generally applicable to its salaried employees. (b) The discharge of Employee for cause, which, as used herein, shall mean if Employee: (i) deliberately performs any act intended to inflict damage on the Company, (ii) violates any provision of this Agreement, (iii) commits a felony or dishonest act, (iv) refuses or fails to carry out resolutions of the Board of Directors of the Company, other than for reasons set forth in paragraph (a) hereinabove. (c) At any time on or after one (1) year from the effective date of this Agreement, if either party shall have given the other party at least thirty (30) days prior written notice that the party giving such notice wishes to terminate Employee's employment hereunder. 2. COMPENSATION. (a) Base Salary. Company agrees to pay Employee an annual base salary to be paid to him in regular installments in accordance with the Company's usual payroll procedures. The annual base salary to be paid Employee for the period commencing April 1, 1994, and ending December 31, 1994, is $200,000 which shall be paid on a pro rata basis. Thereafter, the Employee's annual base salary shall be determined by the Company. (b) Incentive Plan. Employee may be entitled to additional compensation pursuant to the terms and provisions of the Company's 1993 Incentive Plan. (c) Employee Benefits. Employee shall be eligible to participate in such employee benefit plans as the Company may make available to its employees in general from time to time, provided that Employee shall meet the eligibility requirements of such plans. Notwithstanding anything contained herein to the contrary, Employee acknowledges that he has been advised of the following specific benefits and/or benefit plans and, nonetheless, declines to accept such benefits or be covered by such benefit plans: (i) all medical and dental benefits; (ii) all group life insurance benefits; (iii) all split-dollar insurance benefits; and (iv) all long term disability benefits. Employee shall be entitled to the use of a Company automobile in accordance with the Company guidelines for executive officers. (d) Expense Reimbursement. Company shall reimburse to Employee all ordinary and necessary business expenses incurred directly in connection with his employment duties hereunder, provided Employee shall satisfactorily substantiate, in such detail as reasonably necessary, the business relationship of such expenses. 3. NONCOMPETITION. For a period of two (2) years after the termination of his employment with the Company: (a) If Employee voluntarily terminates his employment or if the Company terminates Employee for cause: (i) he will not for any reason, directly or indirectly, either on his own account or as a partner or joint venturer or as an employee or a consultant for any other person, firm or corporation, solicit, service, market, direct, accept or handle any trucking transportation business originating or terminating within a 250-mile radius of Shelby County, Tennessee, for customers of the Company who were such at the time of his termination; (ii) he will not for any reason, directly or indirectly, either on his own account or as a partner or joint venturer or as an employee or a consultant for any other person, firm or corporation, solicit, service, market, direct, accept or handle any trucking transportation business for customers of the Company who were such at the time of his termination and who have shipping business which is transported on shipping lanes used by the Company, without limitation as to distance; provided, that this restriction shall be limited to customers from whom, during the calendar year preceding this termination, the Company received revenues that were at least three percent (3%) of the Company's total revenues from all customers for such year. (b) If Employee voluntarily terminates his employment or if the Company terminates Employee for cause, he will not for any reason, directly or indirectly, in the area within a 250-mile radius of Shelby County, Tennessee, engage in any trucking transportation business either on his own account or as a partner or joint venturer or as an employee or consultant for any other person, firm or corporation. (c) Employee will not induce any person employed by the Company to leave his employment with the Company. (d) Employee will not use or divulge any confidential information or trade secrets of the Company relating to customers or prospects of the Company, all of which information Employee agrees is gathered at the expense of and owned by the Company. The above covenants are intended to be separate and divisible covenants and, if for any reason, any one or more thereof shall be held to be invalid or unenforceable, in whole or in part, the parties agree that the same shall not be held to affect the validity or enforceability of any other such covenant of this Agreement. 4. NOTICES. All notices and other communications provided for by this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by United States certified or registered mail, postage prepaid, return receipt requested. If to Company: M.S. Carriers, Inc. 3171 Directors Row Memphis, TN 38116 ATTN: Chairman of the Board If to Employee: Carl J. Mungenast 9490 Gotten Way Germantown, TN 38139 Or such other address as either party may hereafter from time to time specify in writing to the other party. 5. ENFORCEMENT. This Agreement may be enforced by an injunction by any competent court enjoining and restraining any violation or threatened violation hereof without the Company being required to show any actual damage or to post any bond or other security. 6. ASSIGNMENT. This Agreement shall not be assignable by Employee. 7. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the Company, its successors and assigns, including, without limitation, any person, partnership, company or corporation which may acquire substantially all of the Company's assets or business or with or into which the Company may be liquidated, consolidated, merged or otherwise combined. This Agreement shall inure to the benefit of and be enforceable by the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amount would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there be no such designee, to his estate. 8. VALIDITY. The validity, construction, interpretation or performance of this Agreement shall be governed by the laws of the State of Tennessee. This invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect. 9. ENTIRE AGREEMENT. This Agreement contains the entire understanding and agreement between the parties with respect to the subject matter hereof. The Agreement cannot be amended, modified or supplemented in any respect except by a subsequent written agreement entered into by both parties. IN WITNESS WHEREOF, the parties have executed this Agreement, in duplicate, on the day and year first above written. COMPANY: M.S. CARRIERS, INC. By: Michael S. Starnes Michael S. Starnes, Chairman of the Board EMPLOYEE: Carl J. Mungenast Carl J. Mungenast EX-10 4 1993 INCENTIVE PLAN FOR DESIGNATED KEY EMPLOYEES M.S. CARRIERS, INC. 1993 INCENTIVE PLAN GROUND RULES FOR MSC INCENTIVE PLAN FOR DESIGNATED KEY EMPLOYEES March 1, 1993 I. General Introduction -------------------- A. The 1993 Incentive Plan is designed to be consistent ------------------- with the M.S. Carriers Incentive Philosophy, (Appendix A) and will be improved periodically as the needs of the company change. B. The incentive plan is desinged to (1) promote team- work in all areas of the company, (2) get people to look at the "big picture", and (3) focus those managers and key employees able to affect the bottom line on actual profitability results for the purpose of improving shareholder value. The quarterly OR will establish the amount of incentive a participant can receive. The objective is to tie the management group together as a team which will result in higher net income to the company. Participants will focus on activities which affect profitability (things that matter) rather than just activities (things that keep us busy but have little botton line value.) C. Eligibility: All executive, middle management department heads ----------- and other key employees approved by executive management incentive bounus plan. II. Description of Incentive Plan ----------------------------- A. Participation Criteria: To participate, an employee must: ---------------------- 1. Be assigned to a position selected by executive management. 2. Be designated a member of the plan for the full quarter. 3. If you are absent for an extended period of time, such as a leave of absence or protracted illness, your bonus will be prorated, provided you work sometime during the quarter. You will receive a percent of the bonus equal to the number of work days you were present during the quarter, divided by the total work days in the quarter 4. If you reach age 65 and retire before the quarter is completed, you will receive a bonus computed as in 3 above. B. Mangers will be expected to hold monthly meetings with incentive participants to discuss profitablity opportunities and to analyze the quarterly results to identify ways improvements can be made. C. The incentive plan system will be evaluated by executive management each year so that improvements can be made to meet the needs of the company through time. D. The following scale will determine quarterly payout: Operating % of Base Salary Ratio Achieved Paid Incentive -------------- ---------------- 90.0% 4% 89.5% 6% 89.0% 12% 88.5% 15% 88.0% 18% 87.5% 21% 87.0% 24% 86.5% 27% 86.0% 30% 85.5% 33% 85.0% 36% 84.5% 39% 84.0% 40% E. The projected incentive based on 1993 Plan for a participant salary level of $30,000 is as follows: Projected OR Projected By Qtr. Incentive ------------ --------- 1 91.0% 0 2 86.1% 2,025 3 86.6% 1,800 4 87.3% 1,575 ----- 5,400 (18% of base salary) APPENDIX A ---------- M.S. CARRIERS' INCENTIVE PHILOSOPHY ----------------------------------- . We will not allow external business or economic factors to influence positively or negatively the company's incentive plan. The incentive plan will be reviewed annually to reflect realistic changing business conditions. . We will emphasize to participants that payments earned from the incentive plan will vary and should not become a factor in establishing an individual's or family's standard of living. . We will pay incentives to participants to reflect the groups' impact on operating ratio so that everyone's efforts will be focused toward failure cost elimination and continous improvement in customer and employee satisfaction. EX-27 5 ART. 5 FINANCIAL DATA SCHEDULES FOR 2ND QTR 10-Q FOR 1995
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF JUNE 30, 1995, AND THE RELATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 1995, AND THE NOTES RELATED THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1995 APR-01-1995 JUN-30-1995 15,996,585 0 28,915,523 594,900 0 57,079,016 316,309,492 99,414,857 277,835,721 45,093,322 42,512,318 128,783 0 0 155,385,253 277,835,721 0 84,541,100 0 77,221,560 0 0 1,018,854 6,335,862 2,311,132 4,024,739 0 0 0 4,024,739 .31 .31