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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JKia0Ry6oXilY+tChAY5IsSHO/gUxZNahIoF534UtDIYbZuWTCKAPEAabDM3cN31 xzWRxtbuo6gKQDekl735uA== 0000912057-00-013639.txt : 20000328 0000912057-00-013639.hdr.sgml : 20000328 ACCESSION NUMBER: 0000912057-00-013639 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000327 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARTEN TRANSPORT LTD CENTRAL INDEX KEY: 0000799167 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 391140809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-15010 FILM NUMBER: 579078 BUSINESS ADDRESS: STREET 1: 129 MARTEN ST CITY: MONDOVI STATE: WI ZIP: 54755 BUSINESS PHONE: 7159264216 MAIL ADDRESS: STREET 1: 3400 PLAZA VII STREET 2: 45 SOUTH SEVENTH ST CITY: MINNEAPOLIS STATE: MN ZIP: 55402 10-K 1 10-K Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks -- Click here to rapidly navigate through this document

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the year ended:		Commission file number:
December 31, 1999		0-15010

MARTEN TRANSPORT, LTD.
(Exact name of registrant as specified in its charter)

Delaware		39-1140809
(State of incorporation)		(I.R.S. Employer Identification No.)

129 Marten Street
Mondovi, Wisconsin 54755
(Address of principal executive offices)

Registrant's telephone number:
(715) 926-4216

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share

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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / /

As of March 22, 2000, 4,300,145 shares of Common Stock of the Registrant were deemed outstanding, and the aggregate market value of the Common Stock of the Registrant (based upon the closing price of the Common Stock at that date as reported by The Nasdaq Stock Market), excluding outstanding shares beneficially owned by directors and executive officers, was approximately $26,393,866.

Part II of this Annual Report on Form 10-K incorporates by reference information (to the extent specific pages are referred to in this Report) from the Registrant's Annual Report to Shareholders for the year ended December 31, 1999 (the "1999 Annual Report"). Part III of this Annual Report on Form 10-K incorporates by reference information (to the extent specific sections are referred to in this Report) from the Registrant's Proxy Statement for the annual meeting to be held May 9, 2000 (the "2000 Proxy Statement").

FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K contains certain forward-looking statements. Any statements not of historical fact may be considered forward-looking statements. Written words such as "may," "expect," "believe," "anticipate" or "estimate," or other variations of these or similar words, identify such statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially, depending on a variety of factors, such as the industry driver shortage, the market for revenue equipment, fuel prices and general weather and economic conditions.

PART I

ITEM 1. BUSINESS

(a) General Development of Business.

Marten Transport, Ltd. is a long-haul truckload carrier providing protective service and time- sensitive transportation. "Protective service transportation" means temperature controlled or insulated carriage of temperature-sensitive materials and general commodities. We have operating authority, both contract and common, granted by the Interstate Commerce Commission ("ICC") and are currently regulated by the United States Department of Transportation ("DOT") and the Federal Highway Administration ("FHWA").

As of December 31, 1999, we operated a fleet of 1,633 tractors and 2,305 trailers. Most of our trailers are protective service trailers. As of December 31, 1999, 1,084 tractors and 2,303 trailers in our fleet were company-owned and 549 tractors and 2 trailers were under contract with independent contractors. As of December 31, 1999, we had 1,492 employees, including 1,178 drivers. Our employees are not represented by a collective bargaining unit.

Organized under Wisconsin law in 1970, we are a successor to a sole proprietorship Roger R. Marten founded in 1946. In 1988, we reincorporated under Delaware law. Our executive offices are located at 129 Marten Street, Mondovi, Wisconsin 54755. Our telephone number is (715) 926-4216.

(b) Financial Information About Segments.

Since our inception, substantially all of our revenue, operating profits and assets have related primarily to one business segment—long-haul truckload carriage providing protective service and time-sensitive transportation.

(c) Narrative Description of Business.

We specialize in protective service transportation of foods and other products requiring temperature-controlled carriage or insulated carriage. We also provide dry freight carriage. In 1999, we earned approximately 78% of our revenue from hauling protective service products and 22% of our revenue from hauling dry freight. Most of our dry freight loads require the special services we offer or allow us to position our equipment for hauling protective service loads. The specialized transportation services we offer include:

•: dependable, late-model tractors allowing timely deliveries;
•: late-model, temperature controlled trailers;
•: scheduled pickups and deliveries;
•: assistance in loading and unloading;
•: availability of extra trailers placed for customers' convenience;
•: sufficient equipment to respond promptly to customers' varying needs; and
•: an on-line computer system, which is used to obtain information on the status of deliveries.

Marketing and Customers

Our senior management and marketing personnel seek customers whose products require protective or other specialized services and who ship multiple truckloads per week. To minimize empty miles, we also solicit customers whose shipping requirements allow us to balance the number of loads originating and terminating in any given area.

Our marketing strategy emphasizes service. A key element of this strategy is our strong commitment to satisfying the individualized requirements of our customers. In addition, we have developed an electronic data interchange ("EDI") system. We use this system to provide customers with current information on the status of shipments in transit. Customers also place orders, and we bill customers, electronically using this system. We also use a satellite tracking system to enhance monitoring of shipment locations.

We maintain marketing offices in our Mondovi, Wisconsin headquarters, as well as in other locations throughout the United States. Marketing personnel travel in their regions to solicit new customers and maintain contact with customers. Once we establish a customer relationship, the customer's primary contact is one of our customer service managers. Working from our terminal in Mondovi, the customer service managers regularly contact customers to solicit additional business on a load-by-load basis. Each customer service manager is assigned to particular customers and takes responsibility for monitoring overall transportation, service requirements and shipments for each customer. These efforts to coordinate shipper needs with equipment availability have been instrumental in maintaining an average empty mile rate of 6.6% in 1999.

We set our own freight rates instead of using those published by tariff publishing bureaus. This allows us to offer rates that are more responsive to market conditions and the level of service required by particular customers. We have designed our rate structure to compensate us for the cost of protective service revenue equipment as well as for hauling loads into areas generating empty miles.

We derived approximately 15% of our revenue in 1999 from The Procter & Gamble Company. The Pillsbury Company accounted for approximately 12% of our revenue in 1999, 11% of our revenue in 1998 and 13% of our revenue in 1997.

Operations

Our operations are designed to efficiently use our equipment while emphasizing individualized service to customers. Our EDI system provides real-time and on-line shipment tracking information, increases equipment utilization and assists management in long-range planning and trend analysis. In 1999, we implemented an optimization system which is designed to effectively meet the routing needs of drivers while satisfying customer and company requirements.

We maintain our dispatch operations in our Mondovi, Wisconsin headquarters. We assign customer service managers to particular customers and regions. Customer service managers work closely with our fleet managers, marketing personnel and drivers. Customer service managers also coordinate with our marketing personnel to match customer needs with our capacity and location of revenue equipment. Fleet managers, who are assigned a group of drivers regardless of load destination, use our optimization system in dispatching loads. After dispatching a load, a fleet manager takes responsibility for its proper and efficient delivery and tracks the status of that load through daily contact with drivers. During these daily contacts, fleet managers and drivers discuss the driver's location, load temperature and any problems. We constantly update this information, along with information concerning available loads, on our EDI computer system. We use this computer-generated information to meet delivery schedules, respond to customer inquiries and match available equipment with loads.

Our primary traffic lanes are between the Midwest and the following regions: West Coast, Pacific Northwest, Southwest, Southeast and the East Coast; and from California to the Pacific Northwest and

the Midwest. The average length of a trip (one-way) was 1,069 miles during 1999, 1,081 miles during 1998 and 1,092 miles during 1997. Our loads generally move directly from origin to destination, which eliminates the need for freight terminals. We operate maintenance facilities in Mondovi, Wisconsin; Ontario, California; Forest Park, Georgia; and Wilsonville, Oregon.

We have agreements with various fuel distributors which allow our drivers to purchase fuel at a discount while in transit. We also purchase fuel in bulk in Mondovi and at our maintenance facilities.

Drivers

As of December 31, 1999, we employed 1,178 drivers and had contracts with independent contractors for the services of 549 tractors. Independent contractors provide both a tractor and a qualified driver for our use. We recruit drivers from throughout the United States. The ratio of drivers to tractors as of December 31, 1999, was approximately 1 to 1. Our drivers are not represented by a collective bargaining unit. Our turnover of drivers and independent contractors was approximately 53% in 1999. Based on industry surveys, we believe our driver turnover rate is in line with the industry.

We select drivers, including independent contractors, using our specific guidelines for safety records, driving experience and personal evaluations. We maintain stringent screening, training and testing procedures for our drivers to reduce the potential for accidents and the corresponding costs of insurance and claims. We train new drivers at our Wisconsin terminal in all phases of our policies and operations, as well as in safety techniques and fuel-efficient operation of the equipment. All new drivers must also pass DOT required tests prior to assignment to a vehicle. We maintain a toll-free number, satellite tracking and a staff of fleet managers to communicate and support drivers while on the road for extended periods.

To retain qualified drivers and promote safe operations, we purchase premium quality tractors and equip them with optional comfort and safety features. These features include air ride suspension on the chassis and cab, air conditioning, high-quality interiors, power steering, anti-lock brakes, engine brakes and double sleeper cabs.

We pay company-employed drivers a fixed rate per mile. The rate increases based on length of service. Drivers are also eligible for bonuses based upon safe, efficient driving. We believe that our compensation program provides an important incentive to attract and retain qualified drivers. We pay independent contractors a fixed rate per mile. Independent contractors pay for their own fuel, insurance, maintenance and repairs. Drivers that have been with us for at least six months and independent contractors that have been under contract with us for at least six months are also eligible to purchase shares of our Common Stock under a stock purchase plan we sponsor. We pay the brokerage commissions on purchases of our Common Stock and the plan's administrative costs.

Revenue Equipment

The trucking industry requires significant capital investment in revenue equipment. We finance a portion of our revenue equipment purchases using long-term debt. We purchase tractors and trailers manufactured to our specifications. Freightliner or Peterbilt manufacture most of our tractors. Most of our tractors are equipped with 435/500 or 370/435 horsepower Detroit Diesel or Cummins engines. These engines enable the equipment to maintain constant speed with optimum fuel economy under conditions often encountered by our equipment, such as mountainous terrain and maximum weight loads. Utility, Great Dane or Wabash manufacture most of our single van trailers. Most of our trailers are equipped with Thermo-King cooling and heating equipment, air ride suspensions and anti-lock brakes. Our single van refrigerated trailers are either 53 feet long (2,265 trailers) or 48 feet long (38 trailers). All of our trailers are 102 inches wide and have at least 106 inches of inside height. We standardize equipment to simplify driver training, control the cost of spare parts inventory, enhance our preventive maintenance program and increase fuel economy.

The following table shows the type and age of equipment we own as of December 31, 1999:

Model Year	Tractors	Single Van Trailers
2000	327	389
1999	254	507
1998	184	591
1997	229	373
1996	87	417
1995	2	24
1994	—	1
1992	1	—
1990	—	1

Total	1,084	2,303

We replace our tractors and trailers based on factors such as age, the market for used equipment and improvements in technology and fuel efficiency. We have a comprehensive maintenance program for our company-owned tractors and trailers to minimize equipment downtime and enhance resale or trade-in value. We regularly perform inspections, repairs and maintenance at our facilities in Mondovi, Wisconsin; Ontario, California; Forest Park, Georgia; and Wilsonville, Oregon, and at independent contract maintenance facilities.

Employees

As of December 31, 1999, we employed 1,492 people. This total consists of 1,178 drivers, 103 mechanics and maintenance personnel, and 211 support personnel. Support personnel includes management and administration. Our employees are not represented by a collective bargaining unit. We consider relations with our employees to be good.

Competition

The trucking industry is highly competitive. Our primary competitors are other protective service truckload carriers and private carriage fleets. For freight not requiring protective service trailers, our competitors also include dry freight truckload carriers and railroads. To compete, we rely primarily on our quality of service and our ability to provide protective service and other specialized services. We have less financial resources, own less equipment and carry less freight than several other truckload carriers offering protective service.

Regulation

We are a motor common and contract carrier. The DOT and the FHWA, along with various state agencies, regulate our operations. These regulatory authorities have broad powers, generally governing activities such as authority to engage in motor carrier operations, rates and charges, and certain mergers, consolidations and acquisitions. The Motor Carrier Act of 1980 (the "MCA") substantially increased competition among motor carriers and limited the level of regulation in the industry. The MCA allowed applicants to obtain ICC operating authority more easily and allowed interstate motor carriers to change their rates without ICC approval. The law also removed many route and commodity restrictions. The Trucking Industry Regulatory Reform Act of 1994 (the "TIRRA") has further increased industry competition and limited industry regulation. The TIRRA repealed tariff filing for individually determined rates, simplified the granting of operating authority, and pre-empted price, route and service regulation by the states. The ICC Termination Act of 1995 abolished the ICC and transferred its regulatory authority to the DOT and the FHWA.

Motor carrier operations are subject to the DOT's safety requirements governing interstate operations. Matters such as weight and dimensions of equipment are also regulated by federal and state authorities.

We also have operating authority between the United States and the Canadian Provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan.

ITEM 2. PROPERTIES

Our executive offices and principal terminal are located on approximately seven acres in Mondovi, Wisconsin. This facility consists of approximately 28,000 square feet of office space and approximately 21,000 square feet of equipment repair and maintenance space. Originally constructed in 1965, these facilities were expanded in 1971, 1980, 1987 and 1993.

We maintain a maintenance facility in Ontario, California. We purchased this facility in 1997 for $1.5 million from R & R Properties, a sole-proprietorship owned by Randolph L. Marten. From 1985 through 1997, we leased this facility from R & R Properties. Total rental expense for this lease was $126,000 in 1997. This facility includes approximately 2,700 square feet of office space, 8,000 square feet of equipment repair and maintenance space and a parking lot of 150,000 square feet.

We purchased a maintenance facility in Jonesboro, Georgia in 1993. The building at this facility is approximately 12,500 square feet and consists of office space and a two and one-half bay service and repair space. This facility also has parking for up to forty tractors and trailers. In 2000, we sold the facility in Jonesboro, Georgia and purchased a maintenance facility in Forest Park, Georgia. The building in Forest Park is approximately 11,000 square feet and consists of office space and a five-bay service and repair space. This facility also has parking for up to sixty-five tractors and trailers.

We purchased a maintenance facility in Wilsonville, Oregon in 1995. The building at this facility is approximately 20,000 square feet and consists of office space and an eight-bay service and repair space. This facility also has an eight-acre paved and fenced yard area.

ITEM 3. LEGAL PROCEEDINGS

We periodically are a party to routine litigation incidental to our business. Primarily, this litigation involves claims for personal injury and property damage caused while transporting freight. There are currently no material pending legal, governmental, administrative or other proceedings to which we are a party or of which any of our property is the subject which are unreserved.

We partially self-insure for losses relating to workers' compensation, auto liability, general liability and cargo claims, along with employees' group health benefits. We self-insure for property damage claims. We also maintain an insurance policy that limits annual total losses to $7.5 million for auto liability, workers' compensation and general liability claims. We believe that our current liability limit is reasonable. However, we could suffer losses over our policy limits. Losses in excess of our policy limits could negatively affect our financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 1999.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers, with their ages and the offices held as of March 1, 2000, are as follows:

Name	Age	Position
Randolph L. Marten	47	Chairman of the Board, President and Director
Darrell D. Rubel	54	Executive Vice President, Chief Financial Officer, Treasurer, Assistant Secretary and Director
Robert G. Smith	56	Chief Operating Officer
Timothy P. Nash	48	Vice President of Sales
Franklin J. Foster	43	Vice President of Finance

Randolph L. Marten has been a full-time employee of ours since 1974. Mr. Marten has been a Director since October 1980, our President since June 1986 and our Chairman of the Board since August 1993. Mr. Marten also served as our Chief Operating Officer from June 1986 until August 1998 and as a Vice President from October 1980 to June 1986.

Darrell D. Rubel has been a Director since February 1983, our Chief Financial Officer since January 1986, our Treasurer since June 1986, our Assistant Secretary since August 1987 and our Executive Vice President since May 1993. Mr. Rubel also served as a Vice President from January 1986 until May 1993 and as our Secretary from June 1986 until August 1987.

Robert G. Smith has been our Chief Operating Officer since August 1998. Mr. Smith also served as our Vice President of Operations from June 1993 until May 1999 and as our Director of Operations from September 1989 to June 1993. Mr. Smith served as director of operations for Transport Corporation of America, an irregular-route truckload carrier, from January 1985 to September 1989.

Timothy P. Nash has been our Vice President of Sales since November 1990 and served as our Regional Sales Manager from July 1987 to November 1990. Mr. Nash served as a regional sales manager for Overland Express, Inc., a long-haul truckload carrier, from August 1986 to July 1987.

Franklin J. Foster has been our Vice President of Finance since December 1991 and served as our Director of Finance from January 1991 to December 1991. Mr. Foster served as a vice president in commercial banking for First Bank National Association from October 1985 to January 1991.

Our executive officers are elected by the Board of Directors to serve one-year terms.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information in the "Common Stock Data" section of our 1999 Annual Report on page 12 is incorporated in this Report by reference.

We had no unregistered sales of equity securities during the fourth quarter of the year ended December 31, 1999.

ITEM 6. SELECTED FINANCIAL DATA

The financial information in the "Five-Year Financial Summary" section of our 1999 Annual Report on the inside front cover thereof is incorporated in this Report by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our 1999 Annual Report on pages 3 and 4 is incorporated in this Report by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our credit facility described in Note 2 to the financial statements carries interest rate risk. Amounts borrowed under this agreement are subject to interest charges at a rate equal to either the London Interbank Offered Rate plus applicable margins, or the bank's Reference Rate. The Reference Rate is generally the prime rate. Should the lender's Reference Rate change, or should there be changes to the London Interbank Offered Rate, our interest expense will increase or decrease accordingly. As of December 31, 1999, we had borrowed approximately $36.9 million subject to interest rate risk. On this amount, a 1% increase in the interest rate would cost us $369,000 in additional gross interest cost on an annual basis.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our Financial Statements and the Report of Independent Public Accountants on pages 5 through 12 of our 1999 Annual Report are incorporated in this Report by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. Directors of the Registrant.

The information in the "Election of Directors—Information About Nominees" and "Election of Directors—Other Information About Nominees" sections of our 2000 Proxy Statement is incorporated in this Report by reference.

B. Executive Officers of the Registrant.

Information about our executive officers is included in this Report under Item 4A, "Executive Officers of the Registrant."

C. Compliance with Section 16(a) of the Exchange Act.

The information in the "Section 16(a) Beneficial Ownership Reporting Compliance" section of our 2000 Proxy Statement is incorporated in this Report by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information in the "Election of Directors—Director Compensation" and "Compensation and Other Benefits" sections of our 2000 Proxy Statement is incorporated in this Report by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information in the "Principal Stockholders and Beneficial Ownership of Management" section of our 2000 Proxy Statement is incorporated in this Report by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information in the "Certain Transactions" section of our 2000 Proxy Statement is incorporated in this Report by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. Financial Statements:

The following Financial Statements are incorporated in this Report by reference from the pages noted in our 1999 Annual Report:

Report of Independent Public Accountants—page 12

Balance Sheets as of December 31, 1999 and 1998—page 5

Statements of Operations for the years ended December 31, 1999, 1998 and 1997—page 6

Statements of Changes in Shareholders' Investment for the years ended December 31, 1999, 1998 and 1997—page 6

Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997—page 7

Notes to Financial Statements—pages 8 through 12

2. Financial Statement Schedules:

None.

3. Exhibits:

The exhibits to this Report are listed in the Exhibit Index on pages 11 through 13. A copy of any of the exhibits listed will be sent at a reasonable cost to any shareholder as of March 22, 2000. Requests should be sent to Darrell D. Rubel, Executive Vice President and Chief Financial Officer, at our corporate headquarters.

The following is a list of each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Report under Item 14(c):

(1): Marten Transport, Ltd. 1986 Incentive Stock Option Plan, as amended.
(2): Marten Transport, Ltd. 1986 Non-Statutory Stock Option Plan, as amended.
(3): Employment Agreement, dated May 1, 1993, with Darrell D. Rubel.
(4): Marten Transport, Ltd. 1995 Stock Incentive Plan.
(5): Amendment to Employment Agreement, dated January 27, 1999, with Darrell D. Rubel

(b) Reports on Form 8-K filed in the fourth quarter of 1999:

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Marten Transport, Ltd., the Registrant, has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 27, 2000		MARTEN TRANSPORT, LTD.
		By		/s/ RANDOLPH L. MARTEN Randolph L. Marten Chairman of the Board and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on March 27, 2000 by the following persons on behalf of the Registrant and in the capacities indicated.

Signature		Title
/s/ RANDOLPH L. MARTEN Randolph L. Marten		Chairman of the Board, President (Principal Executive Officer) and Director
/s/ DARRELL D. RUBEL Darrell D. Rubel		Executive Vice President, Chief Financial Officer, Treasurer, Assistant Secretary (Principal Financial and Accounting Officer) and Director
/s/ LARRY B. HAGNESS Larry B. Hagness		Director
/s/ THOMAS J. WINKEL Thomas J. Winkel		Director
/s/ JERRY M. BAUER Jerry M. Bauer		Director
/s/ CHRISTINE K. MARTEN Christine K. Marten		Director

MARTEN TRANSPORT, LTD.
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
For the Year Ended December 31, 1999

Item No.	Item	Filing Method
3.1	Certificate of Incorporation of the Company	Incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-8 (File No. 33-75648).
3.2	Bylaws of the Company	Incorporated by reference to Exhibit 4.2 of the Company's Registration Statement on Form S-8 (File No. 33-75648).
4.1	Specimen form of the Company's Common Stock Certificate	Incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1 (File No. 33-8108).
4.2	Certificate of Incorporation of the Company	See Exhibit 3.1 above.
4.3	Bylaws of the Company	See Exhibit 3.2 above.
9.1	Voting Trust Agreement dated February 14, 1983, as amended	Incorporated by reference to Exhibit 9.1 of the Company's Registration Statement on Form S-1 (File No. 33-8108).
9.2	Agreement regarding Voting Trust Agreement, dated May 4, 1993	Incorporated by reference to Exhibit 19.2 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 0-15010).
10.1	Marten Transport, Ltd. 1986 Incentive Stock Option Plan, as amended	Incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1986 (File No. 0-15010).
10.2	Marten Transport, Ltd. 1986 Non-Statutory Stock Option Plan, as amended	Incorporated by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1987 (File No. 0-15010).
10.3	Stock Restriction Agreement among Roger R. Marten, Randolph L. Marten and Darrell D. Rubel	Incorporated by reference to Exhibit 10.5 of the Company's Registration Statement on Form S-1 (File No. 33-8108).

10.4	Agreement on Credit Terms dated January 5, 1990 between the Company and First Bank National Association	Incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the year ended December 31, 1989 (File No. 0-15010).
10.5	Amendment to Agreement on Credit Terms dated July 31, 1990 between the Company and First Bank National Association	Incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the year ended December 31, 1990 (File No. 0-15010).
10.6	Security Agreement dated January 12, 1990, as amended, between the Company and First Bank National Association	Incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 0-15010).
10.7	Second Amendment to Agreement on Credit Terms dated May 31, 1991 between the Company and First Bank National Association	Incorporated by reference to Exhibit 10.16 of the Company's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 0-15010).
10.8	Amendment No. 3 to Agreement on Credit Terms dated May 17, 1993 between the Company and First Bank National Association	Incorporated by reference to Exhibit 19.3 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 0-15010).
10.9	Employment Agreement dated May 1, 1993 between the Company and Darrell D. Rubel	Incorporated by reference to Exhibit 19.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 (File No. 0-15010).
10.10	Stock Redemption Agreement dated June 21, 1994 between the Company and Darrell D. Rubel, as Personal Representative of the Estate of Roger R. Marten	Incorporated by reference to Exhibit 10.16 of the Company's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 0-15010).

10.11	Marten Transport, Ltd. 1995 Stock Incentive Plan	Incorporated by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 0-15010).
10.12	Note Purchase and Private Shelf Agreement dated October 30, 1998, between the Company and The Prudential Insurance Company of America	Incorporated by reference to Exhibit 10.12 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 0-15010).
10.13	Credit Agreement dated October 30, 1998, between the Company and U.S. Bank National Association	Incorporated by reference to Exhibit 10.13 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 0-15010).
10.14	Amendment to Employment Agreement, dated January 27, 1999, between the Company and Darrell D. Rubel	Incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 0-15010).
10.15	Stock Redemption Agreement, dated June 30, 1999, between the Company and Darrell D. Rubel, as Personal Representative of the Estate of Roger R. Marten	Incorporated by reference to Exhibit 10.15 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-15010).
10.16	First Amendment to Credit Agreement, dated January 3, 2000, between the Company, U.S. Bank National Association and The Northern Trust Company	Filed with this Report.
10.17	Second Amendment to Credit Agreement, dated January 19, 2000, between the Company, U.S. Bank National Association and The Northern Trust Company	Filed with this Report.
13.1	1999 Annual Report to Shareholders	Filed with this Report.
23.1	Consent of Arthur Andersen LLP	Filed with this Report.
27.1	Financial Data Schedule	Filed with this Report.

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FORWARD-LOOKING INFORMATION
PART I

ITEM 1. BUSINESS

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

ITEM 6. SELECTED FINANCIAL DATA

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

EX-10.16 2 EXHIBIT 10.16 Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks -- Click here to rapidly navigate through this document

EXECUTION COPY

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and entered into as of January 3, 2000, is by and between MARTEN TRANSPORT, LTD., a Delaware corporation (the "Borrower"), the banks which are signatories hereto (individually, a "Bank" and, collectively, the "Banks"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent for the Banks (in such capacity, the "Agent").

RECITALS

1. The Borrower and U.S. Bank National Association, in its capacity as a Bank and the Agent, entered into a Credit Agreement dated as of October 30, 1998 (the "Credit Agreement");

2. U.S. Bank National Association, in its capacity as a Bank, has extended to the Borrower, pursuant to the terms of the Credit Agreement, a revolving loan in the amount of $40,000,000. The Borrower has requested, among other things, that the Revolving Commitment Amount under the Credit Agreement be increased to $50,000,000, and The Northern Trust Company is willing to extend a $10,000,000 revolving loan to the Borrower and become a Bank under Section 9.6 of the Credit Agreement; and

3. The Borrower desires to amend certain other provisions of the Credit Agreement, and the Banks and Agent have agreed to make such amendments, subject to the terms and conditions set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby covenant and agree to be bound as follows:

Section 1. Capitalized Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement, unless the context shall otherwise require.

Section 2. Amendments. The Credit Agreement is hereby amended as follows:

2.1 Definitions. (a) The definition of Applicable Margin, contained in Section 1.1 of the Credit Agreement, is amended to read in its entirety as follows:

"Applicable Margin": With respect to Eurodollar Rate Advances, the rate per annum corresponding with the Cash Flow Leverage Ratio as of the last day of the preceding fiscal quarter:

Cash Flow Leverage Ratio	Applicable Margin
>3.00	1.500	%
>2.25 and <=3.00	1.250	%
>1.75 and <=2.25	0.875	%
>1.00 and <=1.75	0.750	%
<=1.00	0.625	%

(b) Section 1.1 of the Credit Agreement is further amended by adding the following definition of "Fee Letter":

"Fee Letter": The confidential letter, dated as of January 3, 2000, from the Agent to the Borrower.

(c) The definition of Revolving Commitment Amount, contained in Section 1.1 of the Credit Agreement, is amended to read in its entirety as follows:

"Revolving Commitment Amount": With respect to a Bank, initially the amount set forth with respect to that Bank on Schedule I, as the same may be amended from time to time, but as the same may be reduced from time to time pursuant to Section 2.13.

2.2 Required Banks. The Credit Agreement is amended by replacing the term "Majority Banks" in all instances in which it appears in the Credit Agreement with the term "Required Banks", and Section 1.1 of the Credit Agreement is further amended by adding the following definition of "Required Banks":

"Required Banks": At any time there are one or two Banks, both such Banks; at any time there are three or more Banks, Banks holding at least 66²/3% of the aggregate unpaid principal amount of the Revolving Notes or, if no Revolving Loans are at the time outstanding hereunder, Banks holding at least 66²/3% if the Aggregate Revolving Commitment Amounts.

2.3 Agreement to Repay Letter of Credit Drawings. The first sentence of Section 2.11 of the Credit Agreement is deleted and replaced with the following two sentences:

If the Agent has received documents purporting to draw under a Letter of Credit that the Agent believes conform to the requirements of the Letter of Credit, it shall honor such drawing and provide Borrower with notice of such drawing. If the Agent has received documents purporting to draw under a Letter of Credit that the Agent believes does not conform to the requirements of the Letter of Credit, it shall notify the Borrower of such fact and, if Agent nevertheless is authorized to honor such draw by the Borrower, the Agent may honor such nonconforming draw, provided, however, if a Default has occurred and is continuing, the Agent may do so only with the consent of all of the Banks

2.4 Revolving Commitment Fee. Section 2.15 of the Credit Agreement is amended by deleting the revolving commitment fee table as it appears therein and inserting in lieu thereof the following table:

Cash Flow Leverage Ratio	Rate Per Annum
>3.00	0.3750	%
>2.25 and <=3.00	0.3125	%
>1.75 and <=2.25	0.2500	%
>1.00 and <=1.75	0.1875	%
<=1.00	0.1500	%

2.5 Letter of Credit Fees. Section 2.16 of the Credit Agreement is amended by deleting the letter of credit fee table as it appears therein and inserting in lieu thereof the following table:

Cash Flow Leverage Ratio	Rate Per Annum
>3.00	1.500	%
>2.25 and <=3.00	1.250	%
>1.75 and <=2.25	0.875	%
>1.00 and <=1.75	0.750	%
<=1.00	0.625	%

2.6 Financial Statements and Reports. Section 5.1(d) and Section 5.1(e) of the Credit Agreement are amended by deleting the phrase "chief financial officer of the Borrower" as it appears therein and inserting in lieu thereof the phrase "either the chief financial officer of the Borrower or the vice president of finance of the Borrower".

2.7 Inspection. Section 5.5 of the Credit Agreement is amended to read in its entirety as follows:

The Borrower shall permit any Persons designated by the Agent or any Bank to visit and inspect any of the properties, corporate books and financial records of the Borrower and Subsidiaries, to examine and to make copies of the books of accounts and other financial records of the Borrower and the Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and the Subsidiaries with, and to be advised as to the same by, its officers at such reasonable times and intervals as the Agent or any such Bank may designate. So long as No Event of Default exists, the expenses of the Agent or any such Bank for such visits, inspections and examinations shall be at the expense of the Agent or any such Bank, but such visits, inspections and examinations made while any Event of Default is continuing shall be at the expense of the Borrower.

2.8 Year 2000. Section 5.12 of the Credit Agreement is amended to read in its entirety as follows:

The Borrower has (a) reviewed and assessed its business operations, equipment and machinery and computer systems and applications to address the "year 2000 problem" (that is, that computer applications and other equipment used by the Borrower, directly or indirectly through third parties, may be unable to perform properly date-sensitive functions before, during and after January 1, 2000); (b) developed a plan and contingency plan which included expense estimates to address the year 2000 problem and remediated any material year 2000 problem; and (c) substantially completed implementation and testing of the plan as of the date hereof.

2.9 Transferees. The second sentence of Section 9.6 of the Credit Agreement is amended to read in its entirety as follows:

Each Bank may at any time sell, assign, transfer, grant participations in, or otherwise dispose of any portion (in a minimum amount of $10,000,000) of its Revolving Commitments, the Revolving Loans and/or Advances (each such interest so disposed of being herein called a "Transferred Interest") to banks or other financial institutions ("Transferees"); provided, however, that a Bank may dispose of a Transferred Interest only with the consents of the Agent and the Borrower (which consents shall not be unreasonably withheld) and only upon payment to the Agent by the parties to such disposition of a processing and recording fee in the amount of $3,000 for each party. Notwithstanding the preceding sentence, a Bank may dispose of a Transferred Interest without consent of the Borrower if an Event of Default has occurred and is continuing.

Section 3. Schedule I. The Credit Agreement is hereby amended to include Schedule I in the form attached hereto.

Section 4. Effectiveness of Amendments. The amendments contained in this Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following:

4.1 This Amendment and a new Revolving Note payable to The Northern Trust Company in the principal amount of $10,000,000 in the form of Exhibit 4.1 hereto (the "Northern Trust Revolving Note") duly executed by the Borrower.

4.2 A copy of the resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Amendment and the Revolving Note certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary (i) certifying that there has been no amendment to the Certificate of Incorporation or Bylaws of the Borrower since true and accurate copies of the same were delivered to the Lender with a certificate of the Secretary of the Borrower dated October 30, 1998,

and (ii) identifying each officer of the Borrower authorized to execute this Amendment, the Northern Trust Revolving Note, and any other instrument or agreement executed by the Borrower in connection with this Amendment (collectively, the "Amendment Documents"), and certifying as to specimens of such officer's signature and such officer's incumbency in such offices as such officer holds.

4.3 Certified copies of all documents evidencing any necessary corporate action, consent or governmental or regulatory approval (if any) with respect to this Amendment.

4.4 An opinion of counsel to the Borrower in the form of Exhibit 4.4 attached to this Amendment, duly executed by said counsel.

4.5 A copy of the Fee Letter, dated as of the date hereof, duly executed by the Borrower.

4.6 A good standing certificate for the Borrower from the States of Delaware, Wisconsin, California, Oregon, and Georgia issued not more than 30 days prior to the date of this Amendment.

4.7 All fees, costs and expenses due and payable pursuant to the Fee Letter, payable in Immediately Available Funds on the date hereof.

4.8 The Borrower shall have satisfied such other conditions as specified by the Agent and the Banks, including payment of all unpaid legal fees and expenses incurred by the Agent through the date of this Amendment in connection with the Credit Agreement and the Amendment Documents.

Section 5. Representations, Warranties, Authority, No Adverse Claim.

5.1 Reassertion of Representations and Warranties, No Default. The Borrower hereby represents that on and as of the date hereof and after giving effect to this Amendment (a) all of the representations and warranties contained in the Credit Agreement are true, correct and complete in all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of the Credit Agreement, and (b) there will exist no Default or Event of Default under the Credit Agreement as amended by this Amendment on such date which has not been waived by the Agent and the Banks.

5.2 Authority, No Conflict, No Consent Required. The Borrower represents and warrants that the Borrower has the power and legal right and authority to enter into the Amendment Documents and has duly authorized as appropriate the execution and delivery of the Amendment Documents and other agreements and documents executed and delivered by the Borrower in connection herewith or therewith by proper corporate, and none of the Amendment Documents nor the agreements contained herein or therein contravenes or constitutes a default under any agreement, instrument or indenture to which the Borrower is a party or a signatory or a provision of the Borrower's Certificate of Incorporation, Bylaws or any other agreement or requirement of law in which the consequences of such default or violation could have a material adverse effect on the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole, or result in the imposition of any Lien on any of its property under any agreement binding on or applicable to the Borrower or any of its property except, if any, in favor of the Agent on behalf of the Banks. The Borrower represents and warrants that no consent, approval or authorization of or registration or declaration with any Person, including but not limited to any governmental authority, is required in connection with the execution and delivery by the Borrower of the Amendment Documents or other agreements and documents executed and delivered by the Borrower in connection therewith or the performance of obligations of the Borrower therein described, except for those which the Borrower has obtained or provided

and as to which the Borrower has delivered certified copies of documents evidencing each such action to the Agent.

5.3 No Adverse Claim. The Borrower warrants, acknowledges and agrees that no events have taken place and no circumstances exist at the date hereof which would give the Borrower a basis to assert a defense, offset or counterclaim to any claim of the Agent or the Banks with respect to the Obligations or the Borrower's obligations under the Credit Agreement as amended by this Amendment.

Section 6. Affirmation of Credit Agreement, Further References. The Agent, the Banks, and the Borrower each acknowledge and affirm that the Credit Agreement, as hereby amended, is hereby ratified and confirmed in all respects and all terms, conditions and provisions of the Credit Agreement, except as amended by this Amendment, shall remain unmodified and in full force and effect. All references in any document or instrument to the Credit Agreement are hereby amended and shall refer to the Credit Agreement as amended by this Amendment. All of the terms, conditions, provisions, agreements, requirements, promises, obligations, duties, covenants and representations of the Borrower under such documents and any and all other documents and agreements entered into with respect to the obligations under the Credit Agreement are incorporated herein by reference and are hereby ratified and affirmed in all respects by the Borrower.

Section 7. Merger and Integration, Superseding Effect. This Amendment, from and after the date hereof, embodies the entire agreement and understanding between the parties hereto and supersedes and has merged into this Amendment all prior oral and written agreements on the same subjects by and between the parties hereto with the effect that this Amendment, shall control with respect to the specific subjects hereof and thereof.

Section 8. Severability. Whenever possible, each provision of this Amendment and the other Amendment Documents and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted in such manner as to be effective, valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment, the other Amendment Documents or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under the applicable law, such provision shall be ineffective in such jurisdiction only to the extent of such prohibition, invalidity or unenforceability, without invalidating or rendering unenforceable the remainder of such provision or the remaining provisions of this Amendment, the other Amendment Documents or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto in such jurisdiction, or affecting the effectiveness, validity or enforceability of such provision in any other jurisdiction.

Section 9. Successors. The Amendment Documents shall be binding upon the Borrower, the Banks, and the Agent and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Banks, and the Agent and the successors and assigns of the Banks and the Agent.

Section 10. Legal Expenses. As provided in Section 9.2 of the Credit Agreement, the Borrower agrees to reimburse the Agent, upon execution of this Amendment, for all reasonable out-of-pocket expenses (including attorney' fees and legal expenses of Dorsey & Whitney LLP, counsel for the Agent) incurred in connection with the Credit Agreement, including in connection with the negotiation, preparation and execution of the Amendment Documents and all other documents negotiated, prepared and executed in connection with the Amendment Documents, and in enforcing the obligations of the Borrower under the Amendment Documents, and to pay and save the Agent and the Banks harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of the Amendment Documents, which obligations of the Borrower shall survive any termination of the Credit Agreement.

Section 11. Headings. The headings of various sections of this Amendment have been inserted for reference only and shall not be deemed to be a part of this Amendment.

Section 12. Counterparts. The Amendment Documents may be executed in several counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that all such counterparts shall be regarded as one and the same document, and either party to the Amendment Documents may execute any such agreement by executing a counterpart of such agreement.

Section 13. Governing Law. THE AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written.

	MARTEN TRANSPORT, LTD.
	By:

	Title:

	Address:	129 Marten Street Mondovi, Wisconsin 54755
Revolving Commitment Amount:	U.S. BANK NATIONAL ASSOCIATION In its individual corporate capacity and as Agent
$40,000,000	By:

	Title:

	Address:	601 Second Avenue South, MPFP0602 Minneapolis, MN 55402-4302 ATTN: Michael J. Reymann
Revolving Commitment Amount:	THE NORTHERN TRUST COMPANY
$10,000,000	By:

	Title:

	Address:	50 South LaSalle Street Chicago, IL 60675 ATTN: Daniel Hintzen

SCHEDULE I
TO THE CREDIT AGREEMENT

Name and Notice Address of Bank		Revolving Commitment Amount
U.S. Bank National Association 601 Second Avenue South, MPFP0602 Minneapolis, MN 55402-4302 ATTN: Michael J. Reymann		$	40,000,000
The Northern Trust Company 50 South LaSalle Street Chicago, IL 60675 ATTN: Daniel Hintzen		$	10,000,000

EXHIBIT 4.1 TO FIRST AMENDMENT
TO CREDIT AGREEMENT

REVOLVING NOTE

$10,000,000 January 3, 2000

Minneapolis, Minnesota

FOR VALUE RECEIVED, MARTEN TRANSPORT LTD., a Delaware corporation, hereby promises to pay to the order of The Northern Trust Company (the "Bank") at the main office of U.S. Bank National Association, as Agent for the Bank, in Minneapolis, Minnesota, in lawful money of the United States of America in Immediately Available Funds (as such term and each other capitalized term used herein are defined in the Credit Agreement hereinafter referred to) on the Revolving Commitment Ending Date, the principal amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000) or, if less, the aggregate unpaid principal amount of the Revolving Loans made by the Bank under the Credit Agreement, and to pay interest (computed on the basis of actual days elapsed and a year of 360 days) in like funds on the unpaid principal amount hereof from time to time outstanding at the rates and times set forth in the Credit Agreement.

This note is one of the Revolving Notes referred to in the Credit Agreement dated as of October 30, 1998, as amended by that certain First Amendment to Credit Agreement dated as of January 3, 2000 (as the same may hereafter from time to time be further amended, restated or otherwise modified, the "Credit Agreement") among the undersigned, the Bank and the other banks named therein. This note is subject to certain permissive and mandatory prepayments and its maturity is subject to acceleration, in each case upon the terms provided in said Credit Agreement.

In the event of default hereunder, the undersigned agrees to pay all costs and expenses of collection, including reasonable attorneys' fees. The undersigned waives demand, presentment, notice of nonpayment, protest, notice of protest and notice of dishonor.

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

		MARTEN TRANSPORT LTD.
		By:

		Its:

STATE OF		)
		) ss.
COUNTY OF		)

On this day of January, 2000, before me, the undersigned, a Notary Public, appeared who being by me duly sworn, did say that he is the of MARTEN TRANSPORT LTD. and that the foregoing instrument was signed on behalf of the corporation by authority of its Board of Directors, and said officer acknowledged the foregoing instrument to be executed for the purposes therein stated and as the free act and deed of the corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.

Notary Public

EXECUTION COPY

SECRETARY'S CERTIFICATE

I, , hereby certify to U.S. Bank National Association, as "Agent" on behalf of the "Banks" (as such terms are defined in the Credit Agreement), on behalf of Marten Transport, Ltd., a Delaware corporation (the "Company"), as follows:

1. I am the duly elected and acting Secretary of the Company.

2. Attached hereto as Exhibit A is a true, complete, and correct copy of resolutions duly adopted by the Board of Directors of the Company. Such resolutions are in conformity with the provisions of the Articles of Incorporation and the Bylaws, as amended, of the Company, and such resolutions are in full force and effect as of the date hereof.

3. There has been no amendment to the Articles of Incorporation or Bylaws of the Company since true and accurate copies of the same were delivered to the Bank with a certificate of the Secretary of the Company dated October 30, 1998.

4. The following persons are duly elected and acting incumbents in the corporate offices indicated, and the signature set forth opposite the name of each such person is the true and genuine specimen signature of such person:

Name and Title		Signature

IN WITNESS WHEREOF, I have executed this Secretary's Certificate this day of January, 2000.


		Name:
		Title: Secretary

I, , being the duly elected and acting Executive Vice President, Chief Financial Officer and Treasurer to the Company, do hereby certify to U.S. Bank National Association, as Agent, that is the duly elected and acting Secretary of the Company and that the signature set forth above is his genuine signature.


		Name:
		Title:		Executive Vice President, Chief
				Financial Officer and Treasurer

EXHIBIT A
TO SECRETARY'S CERTIFICATE

WHEREAS, the Company, the banks which are signatories to the Credit Agreement (individually, a "Bank" and, collectively, the "Banks") and U.S. Bank National Association, as agent for the Banks (in such capacity, the "Agent") entered into a Credit Agreement dated as of October 30, 1998 (the "Credit Agreement").

WHEREAS, the Board of Directors of the Company has determined that it is in the Company's best interests to enter into that certain First Amendment to Credit Agreement to be dated as of December , 1999 (the "First Amendment"), the terms of which will increase to $50,000,000 the Revolving Commitment Amount under the Credit Agreement and the terms of which will change the pricing of the loan as set forth in the First Amendment.

NOW, THEREFORE, BE IT:

RESOLVED, that the form, terms, conditions, and provisions of that certain First Amendment between the Company, the Banks, and the Agent as heretofore presented to the Board of Directors of the Company be, and said First Amendment hereby is, approved and adopted in all respects.

RESOLVED FURTHER, that the consummation of each of the transactions contemplated by and in the First Amendment be, and said transactions hereby are authorized, approved, and adopted in all respects.

RESOLVED FURTHER, that the Chairman of the Board of Directors, the President, each Vice President and Assistant Vice President, and the Secretary of the Company, or any one of them, be, and said officers, or any one of them, hereby are authorized to execute and deliver any and all documents and instruments and to take any and all such actions as he or she may deem necessary or desirable in order to carry out the intent and purposes of the foregoing resolutions, the execution and delivery of such documents or instruments or the taking of such action to be conclusive evidence that such execution and delivery or the taking of such action was authorized by this resolution.

EXHIBIT 4.4 TO
FIRST AMENDMENT TO CREDIT AGREEMENT

MATTERS TO BE COVERED BY
OPINION OF COUNSEL
TO THE BORROWER

The opinion of counsel to the Borrower which is called for by Article III of the First Amendment to Credit Agreement (the "First Amendment") shall be addressed to the Agent and the Banks and dated the date of the First Amendment. It shall be satisfactory in form and substance to the Agent and the Banks and shall cover the matters set forth below, subject to such assumptions, exceptions and qualifications as may be acceptable to the Agent, the Banks and counsel to the Agent and the Banks. Capitalized terms used herein have the respective meanings given such terms in the Credit Agreement dated as of October 30, 1998 (the "Credit Agreement") and the First Amendment.

(i) The Borrower is a corporation duly incorporated and validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted, to enter into the First Amendment and to perform all of its obligations under the Credit Agreement, as amended by the First Amendment. The Borrower is duly qualified and in good standing as a foreign corporation in all of the jurisdictions in which the character of the properties owned or leased by it or the business conducted by it makes such qualification necessary and the failure to so qualify would permanently preclude the Borrower from enforcing its rights with respect to any material asset or expose the Borrower to any material liability.

(ii) The execution, delivery and performance by the Borrower of the First Amendment have been duly authorized by all necessary corporate action by the Borrower.

(iii) The Credit Agreement, as amended by the First Amendment, constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its respective terms.

(iv) The execution and delivery of the First Amendment and the performance by the Borrower of the Credit Agreement, as amended by the First Amendment, will not (i) violate any provision of any law, statute, rule or regulation or, to the best knowledge of such counsel, any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to the Borrower, (ii) violate or contravene any provision of the Articles of Incorporation or bylaws of the Borrower, or (iii) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which the Borrower is a party or by which it or any of its properties may be bound or result in the creation of any Lien thereunder.

(v) No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority is required on the part of the Borrower to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, the Credit Agreement, as amended by the First Amendment.

(vi) To the best knowledge of such counsel, there are no actions, suits or proceedings pending or threatened against or affecting the Borrower or any of its properties before any court or arbitrator, or any governmental department, board, agency or other instrumentality which (i) challenge the legality, validity or enforceability of the Credit Agreement, as amended by the First Amendment, or (ii) if determined adversely to the Borrower, would have a material adverse effect on the business, operations, property or condition (financial or otherwise) of the Borrower and the Subsidiaries as a consolidated enterprise or on the ability of the Borrower to perform its obligations under the Credit Agreement, as amended by the First Amendment.

QuickLinks

FIRST AMENDMENT TO CREDIT AGREEMENT
AGREEMENT
SCHEDULE I TO THE CREDIT AGREEMENT
REVOLVING NOTE
SECRETARY'S CERTIFICATE
EXHIBIT A TO SECRETARY'S CERTIFICATE
MATTERS TO BE COVERED BY OPINION OF COUNSEL TO THE BORROWER
EX-10.17 3 EXHIBIT 10.17 Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks -- Click here to rapidly navigate through this document

EXECUTION COPY

SECOND AMENDMENT TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and entered into as of January 19, 2000, is by and between MARTEN TRANSPORT, LTD., a Delaware corporation (the "Borrower"), the banks which are signatories hereto (individually, a "Bank" and, collectively, the "Banks"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent for the Banks (in such capacity, the "Agent").

RECITALS

1. The Borrower and U.S. Bank National Association, in its capacity as a Bank and the Agent, entered into a Credit Agreement dated as of October 30, 1998, as amended by that certain First Amendment to Credit Agreement dated as of January 3, 2000 (as amended, the "Credit Agreement"); and

2. The Borrower desires to amend certain other provisions of the Credit Agreement, and the Banks and Agent have agreed to make such amendments, subject to the terms and conditions set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby covenant and agree to be bound as follows:

Section 2. Amendments. The Credit Agreement is hereby amended as follows:

2.1 Restricted Payments. Section 6.7 of the Credit Agreement is amended to read in its entirety as follows:

Section 6.7 Restricted Payments. The Borrower will not make any Restricted Payments, except that (i) during Fiscal Year 2000 of the Borrower, the Borrower may make Restricted Payments in an aggregate amount not exceeding $5,000,000, and (ii) during any other fiscal year of the Borrower, the Borrower may pay dividends or make distributions on or with respect to its capital stock in an aggregate amount not exceeding 25% of the Borrower's total consolidated net income as shown on its audited income statement for its most recent prior fiscal year.

2.2 Year 2000. Section 5.12 of the Credit Agreement is amended to read in its entirety as follows:

The Borrower has reviewed and assessed its business operations and computer systems and applications to address the "year 2000 problem" (that is, that computer applications and equipment used by the Borrower, directly or indirectly through third parties, may have been or may be unable to properly perform date-sensitive functions before, during and after January 1, 2000). The Borrower represents and warrants that the year 2000 problem has not resulted in and will not result in a material adverse change in the Borrower's business condition (financial or otherwise), operations, properties or prospects or ability to repay the Banks. The Borrower agrees that this representation and warranty will be true and correct on and shall be deemed made by the Borrower on each date Borrower requests any advance under this Agreement or Note or delivers any information to the Agent or the Banks. The Borrower will promptly deliver to the Agent or the Banks such information relating to this representation and warranty as the Agent or the Banks request from time to time.

Section 3. Effectiveness of Amendments. The amendments contained in this Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following:

4.1 This Amendment duly executed by the Borrower.

4.2 A copy of the resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Amendment certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary (i) certifying that there has been no amendment to the Certificate of Incorporation or Bylaws of the Borrower since true and accurate copies of the same were delivered to the Lender with a certificate of the Secretary of the Borrower dated October 30, 1998, and (ii) identifying each officer of the Borrower authorized to execute this Amendment and any other instrument or agreement executed by the Borrower in connection with this Amendment (collectively, the "Amendment Documents"), and certifying as to specimens of such officer's signature and such officer's incumbency in such offices as such officer holds.

4.3 The Borrower shall have satisfied such other conditions as specified by the Agent and the Banks, including payment of all unpaid legal fees and expenses incurred by the Agent through the date of this Amendment in connection with the Credit Agreement and the Amendment Documents.

Section 5. Representations, Warranties, Authority, No Adverse Claim.

Section 11. Headings. The headings of various sections of this Amendment have been inserted for reference only and shall not be deemed to be a part of this Amendment.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written.

	MARTEN TRANSPORT, LTD.
	By:

	Title:

	Address:	129 Marten Street Mondovi, Wisconsin 54755
Revolving Commitment Amount:	U.S. BANK NATIONAL ASSOCIATION In its individual corporate capacity and as Agent
$40,000,000	By:

	Title:

	Address:	601 Second Avenue South, MPFP0602 Minneapolis, MN 55402-4302 ATTN: Michael J. Reymann
Revolving Commitment Amount:	THE NORTHERN TRUST COMPANY
$10,000,000	By:

	Title:

	Address:	50 South LaSalle Street Chicago, IL 60675 ATTN: Daniel Hintzen

EXECUTION COPY

SECRETARY'S CERTIFICATE

1. I am the duly elected and acting Secretary of the Company.

Name and Title		Signature

IN WITNESS WHEREOF, I have executed this Secretary's Certificate this day of January, 2000.

		Name:
		Title: Secretary

		Name:
		Title:		Executive Vice President, Chief
				Financial Officer and Treasurer

EXHIBIT A
TO SECRETARY'S CERTIFICATE

WHEREAS, the Board of Directors of the Company has determined that it is in the Company's best interests to enter into that certain Second Amendment to Credit Agreement to be dated as of January , 2000 (the "Second Amendment"), the terms of which will change the terms of the Company's permitted Restricted Payments, as defined in the Credit Agreement.

NOW, THEREFORE, BE IT:

RESOLVED, that the form, terms, conditions, and provisions of that certain Second Amendment between the Company, the Banks, and the Agent as heretofore presented to the Board of Directors of the Company be, and said Second Amendment hereby is, approved and adopted in all respects.

RESOLVED FURTHER, that the consummation of each of the transactions contemplated by and in the Second Amendment be, and said transactions hereby are authorized, approved, and adopted in all respects.

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SECOND AMENDMENT TO CREDIT AGREEMENT
EX-13.1 4 EXHIBIT 13.1 Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks -- Click here to rapidly navigate through this document

To Our Stockholders and Employees

[PHOTO]

1999 was a year of continued growth and progress for Marten Transport—growth in revenue and net income, which both set new annual records for us—and progress in positioning our business for future success. We continued with the aggressive replacement and modernization of our fleet, implemented new systems for optimizing equipment utilization and driver scheduling, and further built our reputation for superior service by meeting the expectations of our existing customers and providing new customers with swift responses to their needs for our services.

1999 Financial Results

Revenue totaled $219.2 million, an increase of 13 percent over revenue of $193.6 million in 1998. Our growth continues to be driven by increased revenue from existing customers as well as business from new customers. Operating income in 1999 was $17.7 million, compared with $16.3 million in 1998. Marten's operating ratio, which compares operating costs to revenue, increased slightly to 91.9 percent in 1999 from 91.6 percent in 1998. Increased revenue per tractor, along with effective control of expenses, offset the significant rise in diesel fuel prices, particularly during the second half of the year.

Net income for 1999 increased 12 percent to $8.5 million, or $1.92 per diluted share, up from $7.6 million, or $1.67 per diluted share, in 1998.

A Strong Foundation for the Future

As Marten Transport enters the new millennium, we have a strong foundation to support our future growth. At the core of this foundation is our strong financial position, an unbroken record of annual increases in revenue over the past two decades, and our reputation, throughout the temperature-controlled transportation industry, for superior service. Additionally, we have solid and well-established customer relationships with a diverse group of quality companies, a team comprised of highly qualified and experienced people in the transportation industry, leading-edge technology and a premium fleet of modern equipment.

Customer relationships are at the heart of Marten's past success and the focus of our plans for the future. By concentrating on an in-depth understanding of our customers' unique transportation requirements, we become their partners and are able to maximize the quality of our service. Although the freight we transport for our customers is varied and diverse—ranging from perishable food products to sensitive electronics and green plants—the common denominator of our service offering is timeliness, dependability and protecting the valuable cargo entrusted to our drivers.

Quality people—drivers, independent contractors, fleet managers, customer service managers, maintenance, sales and administrative personnel—remain one of Marten's key strategic strengths. Enhancing the overall quality of our team is Marten's driver retention rate, giving our customers the benefit of significant experience, high safety standards and ongoing training programs. We remain focused on seeking ways to overcome the industry-wide challenge of retaining and recruiting sufficient numbers of qualified drivers while maintaining the high level of service that our customers expect and deserve. During 1999, consistent with our goal of being the best transportation company to work for, we improved driver compensation, strengthened recruiting efforts and applied new systems and technology to enhance driver productivity and further improve working conditions.

Leading-edge technology, one of our keys to success, was enhanced in 1999 with the implementation of a new optimization system which is designed to effectively meet the routing needs of drivers while satisfying customer and company requirements. This added system, together with our long history of networked computer systems and full satellite communications and global positioning equipment on

each tractor, not only enables us to better serve the needs of our drivers, but allows us to provide premier service to our customers.

Premium equipment is another key strategic strength in serving our customers. In 1999, we invested more than $40 million in our business, the majority of which was invested in new revenue equipment. At year end, the average age of our more than 1,000 company-owned tractors was 1.6 years, with our trailer fleet—now comprised almost entirely of 53-foot temperature-controlled vans—averaging just two years old. Supporting our fleet, in addition to our headquarters facility in Mondovi, Wisconsin, are three service centers—Ontario, California; Forest Park, Georgia; and Wilsonville, Oregon. Early in 2000, we moved to a larger and enhanced maintenance facility in Forest Park to service our fleet operations in the southeastern United States.

Opportunities for Growth Abound

Capitalizing on the strengths that have been at the heart of our past success is Marten's formula for taking advantage of the opportunities that we see ahead. One such opportunity is offered in the continuing consolidation of the transportation industry. Marten is well situated to take advantage of this consolidation by offering new customers the service, equipment and technology that will serve their needs.

Another area of significant opportunity is our dedicated operations, which provide customers with dedicated capacity, including experienced drivers as well as tractors, trailers, and management services, for a broad spectrum of companies for their exclusive use. We convert private fleets, create new fleets for our customers, or supplement existing private fleets. We expect dedicated operations to increase as a percent of our business mix in the future.

A third area of opportunity for Marten is the continuing, steady increase in customer expectations for premier service and dependable on-time delivery. These expectations provide a competitive advantage for Marten, based on our state-of-the-art technology, and our proven dependability. Increasingly, shippers will continue to migrate to those transportation providers that keep up with expectations and technology. Our customers expect to know where their shipments are, want to be certain that their freight is protected and that delivery appointments are kept, without exception. The explosion of the internet, electronic data interchange and full information interconnectivity is also adding to the increase in customer expectations, and we are continuing to respond to this trend. The new tools that are becoming available—for information flow, scheduling, fleet optimization, even artificial intelligence—will help to further differentiate Marten from many of its competitors and provide additional opportunities for growth. For each of the key areas of opportunity we see, as well as for other sources of increased revenue, we are well-positioned to grow with our customers. We have demonstrated our ability to keep up with their growth, and are committed to cementing our strong customer relationships with steadily expanding fleet size and capacity.

As we look to the future, we are very optimistic in our preparedness to achieve continued profitable growth. We gratefully acknowledge the continuing support of our employees, our stockholders and our valued customers, and are committed to achieving another successful and profitable year for Marten Transport.

		Sincerely,
		/s/ Randolph L. Marten
		[PHOTO]		Randolph L. Marten President and Chairman of the Board March 15, 2000

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations Operating revenue for the year ended December 31, 1999, increased 13 percent over 1998. This compares with increases of 12 percent in 1998 and 18 percent in 1997. These increases were primarily the result of transporting additional freight associated with increases in our fleet each of the last three years. Average freight rates increased over the last three years due to stronger customer demand. Fourth quarter 1999 customer demand was particularly strong due to concerns with the Year 2000 problem and industry-wide capacity. These concerns caused freight rates in 1999 to increase at a slightly higher rate than in 1998 and 1997. Equipment utilization, measured by average miles traveled per tractor, declined slightly in 1999 and increased slightly in 1998 and 1997. Our contracts with customers require fuel surcharges and rebates based on significant fluctuations in the price of diesel fuel. Diesel fuel prices were low in the first half of 1999, resulting in rebates to our customers during the first half of 1999. Diesel fuel prices significantly increased in the second half of 1999, resulting in fuel surcharge assessments. The net impact of our fuel surcharge and rebate program in 1999 was an increase in revenue of $352,000. Operating revenue in 1998 was reduced by fuel rebates of $496,000, while revenue in 1997 was increased by fuel surcharges of $1.2 million. We expect operating revenue in 2000 to exceed 1999 levels due to continued customer demand and planned revenue equipment additions.

Operating expenses were 91.9 percent of operating revenue in 1999, compared with 91.6 percent in 1998 and 92.5 percent in 1997. This ratio in 1999 remained relatively flat in comparison with the 1998 ratio due to a continued increase in the revenue generated per tractor. This ratio improved in 1998 and 1997 due to increases in revenue generated per tractor along with efficient control of expenses.

The transportation of additional freight and growth of our fleet caused most expense categories to increase during the last three years. Purchased transportation expense increased to 26.3 percent of revenue in 1999, compared with 24.2 percent in 1998 and 20.8 percent in 1997. We have increased the number of independent contractor-owned vehicles in our fleet during the last three years, which has caused these percentages to increase. Independent contractors assume responsibility for their own salaries, wages and benefits expense, fuel and fuel tax expense, and supplies and maintenance expense. As a result, our expenses in these categories have been reduced relative to revenue during the last three years. The price of diesel fuel significantly increased throughout 1999, negatively impacting fuel and fuel tax expense. The price of diesel fuel significantly declined in 1998, causing a reduction in fuel and fuel tax expense. Insurance and claims expense as a percent of revenue was 2.1 percent in 1999, 1.9 percent in 1998 and 2.0 percent in 1997. Our continued focus on driver safety, training and claims management has caused our insurance premiums to decrease and insurance and claims expense to remain relatively stable over the last three years. Our gain on disposition of revenue equipment has increased over the last three years due to an increase in the market value received for used revenue equipment along with additional planned revenue equipment trades. We anticipate our 2000 operating expenses as a percent of revenue will remain at current levels.

Interest expense as a percent of revenue has declined over the last three years to 1.8 percent in 1999 from 2.0 percent in 1998 and 2.4 percent in 1997. The improvement in 1999 reflects the lower interest rates associated with our Series A Senior Unsecured Notes and our unsecured committed credit facility entered into during our fourth quarter of 1998. The improvement in 1998 was primarily caused by a decrease in our average long-term debt during 1998. We anticipate interest expense in 2000 as a percent of revenue will remain at 1999 levels.

Our effective tax rate was 39 percent in 1999 and 40 percent in 1998 and 1997. We anticipate our effective income tax rate will be approximately 38 percent in 2000.

In 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as discussed in Note 1 to the financial statements. This statement, effective in our first quarter of 2001, is expected to

have minimal impact on our results of operations and financial position because we did not hold significant derivative instruments as of December 31, 1999.

Inflation can be expected to affect most of our operating expenses. The impact of inflation, however, was minimal during the three years ended December 31, 1999.

Capital Resources and Liquidity Our operating activities in 1999 provided net cash of $28,327,000. Our business requires significant capital expenditures to maintain and update our fleet with new, more efficient tractors and trailers. In 1999, we invested net cash of $40,440,000 in revenue equipment additions and other capital expenditures, while financing activities provided $10,997,000. We repurchased 177,500 shares of our common stock during our second quarter of 1999 from the estate of our former chairman and chief executive officer, Roger R. Marten, for $12 per share. These shares have been retired, reducing shareholders' investment by $2,130,000. We paid for these purchases using cash flows from operations and proceeds from long-term debt.

In 2000, we sold our maintenance facility in Georgia and purchased a new maintenance facility, which is also in Georgia. These two transactions required a net cash outlay of approximately $900,000, which we funded using cash flows from our operations.

Our current cash management practice minimizes both cash and debt balances by utilizing our unsecured committed credit facility. In January 2000, we entered into an agreement with an additional bank, increasing our committed credit facility from $40 million to $50 million. Our receivables balance at December 31, 1999, increased due to an increase in revenue during the fourth quarter of 1999 and an increase in the disposition of revenue equipment. We have historically met our working capital requirements by effectively utilizing our operating profits, short turnover in accounts receivable and cash management practices. We have not used and do not expect to use short-term borrowings to meet working capital needs. We believe our liquidity will adequately satisfy expected near-term operating requirements.

Seasonality Historically, the trucking industry has experienced seasonal fluctuations in revenue and expenses. We experience revenue declines after the winter holiday season as customers reduce shipments. Operating expenses temporarily increase in the winter due to reduced fuel efficiency and additional maintenance costs.

Impact of Year 2000 The "Year 2000 problem" refers to the potential for computational errors or system malfunctions by computer hardware or software that fail to properly recognize dates beginning with January 1, 2000, or which fail to recognize the year 2000 as a leap year. In anticipation of this problem, we instituted and followed a Year 2000 readiness program intended to identify, evaluate and address our Year 2000 exposure.

We have experienced no significant issues relating to the Year 2000 problem. We are aware of no further significant contingencies relating to the Year 2000 problem existing internally or with our significant vendors and third parties with whom we do business. The cost to address Year 2000 issues was approximately $100,000, which is in line with our previous estimates.

Forward-Looking Information This annual report contains certain forward-looking statements. Any statements not of historical fact may be considered forward-looking statements. Written words such as "may," "expect," "believe," "anticipate" or "estimate," or other variations of these or similar words, identify such statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially, depending on a variety of factors, such as the industry driver shortage, the market for revenue equipment, fuel prices and general weather and economic conditions.

Balance Sheets

	December 31,
	1999			1998
	(In thousands, except share information)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	1,116
Receivables:
Trade, less allowances of $855 and $751		22,984			17,129
Other		4,689			2,625
Prepaid expenses and other		7,471			7,850
Deferred income taxes		4,166			3,265

Total current assets		39,310			31,985

Property and equipment:
Revenue equipment		180,395			160,600
Buildings and land		6,440			6,320
Office equipment and other		6,196			5,351
Less accumulated depreciation		(47,311	)		(48,514	)

Net property and equipment		145,720			123,757
Other assets		889			967

	$	185,919		$	156,709

LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Accounts payable	$	6,316		$	3,687
Insurance and claims accruals		12,680			10,529
Accrued liabilities		8,159			8,090
Current maturities of long-term debt		5,659			8,899

Total current liabilities		32,814			31,205
Long-term debt, less current maturities		63,599			47,232
Deferred income taxes		29,901			24,994

Total liabilities		126,314			103,431

Commitments (Notes 1 and 7)
Shareholders' investment:
Common stock, $.01 par value per share, 10,000,000 shares authorized, 4,300,145 and 4,477,645 shares issued and outstanding		43			45
Additional paid-in capital		9,934			9,934
Retained earnings		49,628			43,299

Total shareholders' investment		59,605			53,278

	$	185,919		$	156,709

The accompanying notes are an integral part of these balance sheets.

Statements of Operations

	For the years ended December 31,
	1999			1998			1997
	(In thousands, except share information)
Operating revenue	$	219,200		$	193,648		$	172,412

Operating expenses:
Salaries, wages and benefits		64,123			58,798			52,917
Purchased transportation		57,637			46,833			35,914
Fuel and fuel taxes		26,962			23,328			25,642
Supplies and maintenance		16,808			15,633			14,359
Depreciation		20,622			18,724			17,239
Operating taxes and licenses		4,467			3,809			3,531
Insurance and claims		4,630			3,681			3,364
Communications and utilities		2,667			2,524			2,152
Gain on disposition of revenue equipment		(2,067	)		(935	)		(242	)
Other		5,665			4,908			4,689

		201,514			177,303			159,565

Operating income		17,686			16,345			12,847

Other expenses (income):
Interest expense		4,042			3,964			4,205
Interest income and other		(220	)		(243	)		(203	)

		3,822			3,721			4,002

Income before income taxes		13,864			12,624			8,845
Provision for income taxes		5,407			5,050			3,538

Net income	$	8,457		$	7,574		$	5,307

Basic earnings per common share	$	1.93		$	1.69		$	1.19

Diluted earnings per common share	$	1.92		$	1.67		$	1.19

The accompanying notes are an integral part of these statements.

Statements of Changes in Shareholders' Investment

	Common Stock
	Common Stock					Additional Paid-In Capital		Retained Earnings
	Shares		Amount			Additional Paid-In Capital		Retained Earnings			Total
	(In thousands, except share information)
Balance at December 31, 1996	2,959,616		$	30		$	9,581	$	30,433		$	40,044
Net income	—			—			—		5,307			5,307
Issuance of common stock	25,500			—			353		—			353
Stock split	1,492,529			15			—		(15	)		—

Balance at December 31, 1997	4,477,645		$	45		$	9,934	$	35,725		$	45,704
Net income	—			—			—		7,574			7,574

Balance at December 31, 1998	4,477,645		$	45		$	9,934	$	43,299		$	53,278
Net income	—			—			—		8,457			8,457
Repurchase of common stock	(177,500	)		(2	)		—		(2,128	)		(2,130	)

Balance at December 31, 1999	4,300,145		$	43		$	9,934	$	49,628		$	59,605

The accompanying notes are an integral part of these statements.

Statements of Cash Flows

	For the years ended December 31,
	1999			1998			1997
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income	$	8,457		$	7,574		$	5,307
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation		20,622			18,724			17,239
Gain on disposition of revenue equipment		(2,067	)		(935	)		(242	)
Deferred tax provision		4,006			3,311			1,970
Changes in other current operating items:
Receivables		(7,919	)		(882	)		561
Prepaid expenses and other		379			(929	)		(582	)
Accounts payable		2,629			(785	)		650
Other current liabilities		2,220			(1,592	)		(549	)

Net cash provided by operating activities		28,327			24,486			24,354

CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue equipment additions		(63,226	)		(43,172	)		(32,598	)
Revenue equipment dispositions		23,827			14,932			10,698
Buildings and land, office equipment and other additions, net		(1,119	)		(630	)		(1,894	)
Net change in other assets		78			(392	)		(575	)

Net cash used for investing activities		(40,440	)		(29,262	)		(24,369	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings		87,366			63,540			22,469
Repayment of long-term borrowings		(74,239	)		(59,700	)		(23,783	)
Common stock repurchased		(2,130	)		—			—
Issuance of common stock		—			—			353

Net cash provided by (used for) financing activities		10,997			3,840			(961	)

DECREASE IN CASH AND CASH EQUIVALENTS		(1,116	)		(936	)		(976	)
CASH AND CASH EQUIVALENTS:
Beginning of year		1,116			2,052			3,028

End of year	$	—		$	1,116		$	2,052

CASH PAID FOR:
Interest	$	4,008		$	3,675		$	4,211

Income taxes	$	854		$	2,171		$	534

The accompanying notes are an integral part of these statements.

Notes to Financial Statements

1. Summary of Significant Accounting Policies

Nature of business: Marten Transport, Ltd. is a long-haul truckload carrier providing protective service transportation of time- and temperature-sensitive materials and general commodities. We earned approximately 15 percent and 12 percent of our revenue from two single customers in 1999, 11 percent from a single customer in 1998 and 13 percent from a single customer in 1997.

Cash equivalents: We invested available funds in short-term cash equivalents. These investments were primarily mutual funds with U.S. government-backed securities having original maturities of three months or less. These investments were stated at cost, which approximated market value.

Prepaid expenses and other: As of December 31, prepaid expenses and other consisted of the following:

	1999		1998
	(In thousands)
License fees	$	2,933	$	2,829
Tires in service		1,941		1,941
Parts and tires inventory		1,142		1,697
Insurance		423		407
Other		1,032		976

	$	7,471	$	7,850

Property and equipment: Additions and improvements to property and equipment are capitalized at cost. Maintenance and repair expenditures are charged to operations. Gains and losses on disposals of revenue equipment are included in operations.

Depreciation is computed based on the cost of the asset, reduced by its estimated salvage value, using the straight-line method for financial reporting purposes. Accelerated methods are used for income tax reporting purposes. Following is a summary of estimated useful lives for financial reporting purposes:

		Years
Revenue equipment:
Tractors		5
Trailers		7
Satellite tracking		7
Buildings		20
Office equipment and other		3-15

Tires in service: The cost of original equipment and replacement tires placed in service is capitalized. Amortization is calculated based on cost, less estimated salvage value, using the straight-line method over 24 months. The current portion of capitalized tires in service is included in prepaid expenses in the balance sheets. The long-term portion of capitalized tires in service and the estimated salvage value are included in revenue equipment in the balance sheets. The cost of recapping tires is charged to operations.

Insurance and claims: We self-insure, in part, for losses relating to workers' compensation, auto liability, general liability and cargo claims, along with employees' group health benefits. We self-insure

for property damage claims. We maintain insurance coverage for per-incident and total losses in amounts we consider adequate based upon ongoing review and historical experience. We reserve currently for anticipated losses. The insurance and claims reserves are continuously evaluated and adjusted to reflect our experience. Under agreements with our insurance carriers and regulatory authorities, we have arranged for approximately $2.2 million in letters of credit to guarantee settlement of claims. We are involved in legal actions that arise in the ordinary course of business. Although the outcomes of any such legal actions cannot be predicted, in the opinion of management, the resolution of any currently pending or threatened actions will not have a material adverse effect upon our consolidated financial position or results of operations.

Revenue recognition: We record revenue and related expenses on the date shipment of freight is completed.

Accounting for derivative instruments and hedging activities: Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (Statement No. 133) was issued in June 1998 and will be effective in our first quarter of 2001. Statement No. 133 requires companies to record the fair value of derivatives as either assets or liabilities on the balance sheet. The accounting for gains or losses from changes in the fair value of derivatives depends on the intended use of the derivatives and whether the criteria for hedge accounting have been satisfied. We have entered into commodity swap agreements to partially hedge our exposure to diesel fuel price fluctuations. Statement No. 133 is expected to have minimal impact on our results of operations and financial position because we did not hold significant derivative instruments as of December 31, 1999.

Use of estimates: We must make estimates and assumptions to prepare the financial statements using generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities in the financial statements. The reported amounts of revenue and expenses in the financial statements are also affected. These estimates are primarily related to insurance and claims accruals and depreciation. Actual results could differ from these estimates.

2. Long-Term Debt

As of December 31, long-term debt consisted of the following:

	1999		1998
	(In thousands)
Unsecured committed credit facility with a bank maturing in October 2001 and bearing variable interest based upon either the London Interbank Offered Rate plus applicable margins or the bank's Reference Rate (7.5% weighted average rate at December 31, 1999)	$	36,916	$	14,800
Series A Senior Unsecured Notes maturing in October 2008 and bearing fixed interest at 6.78%		25,000		25,000
Notes payable to banks collateralized by specific revenue equipment maturing through December 2001 (8.2% weighted average interest rate at December 31, 1999)		7,342		16,331

Total long-term debt		69,258		56,131
Less current maturities of long-term debt		5,659		8,899

Long-term debt, less current maturities	$	63,599	$	47,232

In January 2000, we entered into an agreement with an additional bank which increased our unsecured committed credit facility from $40 million to $50 million.

The debt agreements contain restrictive covenants which, among other matters, require us to maintain certain financial ratios. We satisfied all debt covenants at December 31, 1999.

Maturities of long-term debt at December 31, 1999, are as follows:

	Amount
	(In thousands)
2000	$	5,659
2001		38,600
2002		3,571
2003		3,571
2004		3,571
Thereafter		14,286

	$	69,258

3. Related Party Transactions

The following related party transactions occurred during the three years ended December 31, 1999:

(a) We repurchased 177,500 shares of our common stock from the estate of our former chairman and chief executive officer, Roger R. Marten, on June 30, 1999, for $12 per share. The shares have been retired, reducing shareholders' investment by $2,130,000.

(b) We paid approximately $1.6 million in 1999, $1.5 million in 1998 and $1.6 million in 1997 to purchase fuel and tires from a company in which one of our directors is the president and a stockholder.

(c) We purchased an office and terminal facility in 1997 for $1.5 million from an entity owned by our chairman of the board. We leased the facility under a non-cancelable operating lease with the same entity before it was purchased. Total rental expense charged to operations for this lease was $126,000 during 1997.

(d) We have had checking, savings and investment accounts at banks which are controlled by one of our directors and officers. We closed all of our accounts at these banks in 1999.

We believe that these transactions with related parties are on reasonable terms which are comparable to terms available from unaffiliated third parties.

4. Income Taxes

We use the liability method of accounting for income taxes. Deferred taxes are calculated based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given current tax laws.

The components of the provision for income taxes consisted of the following:

	1999		1998		1997
	(In thousands)
Current:
Federal	$	1,173	$	1,480	$	1,271
State		228		259		297

		1,401		1,739		1,568

Deferred:
Federal		3,317		2,963		1,739
State		689		348		231

		4,006		3,311		1,970

Total provision	$	5,407	$	5,050	$	3,538

The statutory federal income tax rate is reconciled to the effective income tax rate as follows:

	1999		1998		1997
Statutory federal income tax rate	34	%	34	%	34	%
Increase in taxes arising from:
State income taxes, net of federal income tax benefit	4		4		6
Other, net	1		2		—

Effective tax rate	39	%	40	%	40	%

As of December 31, the net deferred tax liability consisted of the following:

	1999		1998
	(In thousands)
Deferred tax assets:
Reserves and accrued liabilities for financial reporting in excess of tax	$	6,059	$	5,081
State income tax deduction for financial reporting in excess of tax		1,397		1,162
Alternative minimum tax credit		701		322

		8,157		6,565

Deferred tax liabilities:
Tax depreciation in excess of depreciation for financial reporting		31,989		26,470
Prepaid licenses and use tax expensed for income tax purposes and capitalized for financial reporting		1,287		1,239
Other		616		585

		33,892		28,294

Net deferred tax liability	$	25,735	$	21,729

5. Stock Split

In 1997, our board of directors authorized a three-for-two stock split of our common stock, $.01 par value. Each stockholder of record received an additional one-half share for each share of common stock held as of the close of business on December 15, 1997. The additional shares were distributed on January 5, 1998. The stock split was effected in the form of a dividend, using authorized but unissued shares of our common stock. All per share amounts for 1997 and prior years have been retroactively adjusted to reflect the stock split.

6. Earnings Per Common Share

Basic and diluted earnings per common share were computed as follows:

	1999		1998		1997
	(In thousands, except per-share amounts)
Numerator:
Net income	$	8,457	$	7,574	$	5,307

Denominator:
Basic earnings per common share—weighted-average shares		4,388		4,478		4,446
Effect of dilutive stock options		10		46		22

Diluted earnings per common share—weighted-average shares and assumed conversions		4,398		4,524		4,468

Basic earnings per common share	$	1.93	$	1.69	$	1.19

Diluted earnings per common share	$	1.92	$	1.67	$	1.19

The following options were outstanding but were not included in the calculation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares and, therefore, including the options in the denominator would be antidilutive, or decrease the number of weighted-average shares.

	1999		1998		1997
Number of option shares		356,250		11,250		315,000
Weighted-average exercise price	$	13.64	$	17.25	$	13.50

7. Employee Benefits

Stock Incentive Plans: Under our Stock Incentive Plan adopted in 1995, officers, directors and employees may be granted incentive and non-statutory stock options. Incentive stock option prices must be at least the fair market value of our common stock on the date of grant. Non-statutory stock option prices must be at least 85 percent of the fair market value of our common stock on the date the option is granted. Stock options expire within 10 years after the date of grant. The plan also allows for stock appreciation rights, restricted stock awards, performance units and stock bonuses, none of which have been awarded as of December 31, 1999. The maximum number of shares of common stock available for issuance under the plan is 750,000 shares.

In 1986, we adopted an Incentive Stock Option Plan and a Non-Statutory Stock Option Plan allowing for the grant of options. The option prices must be at least the fair market value of our common stock on the date of grant. In these plans, 375,000 shares of common stock are available for issuance to officers, directors and employees. Options under the Incentive Stock Option Plan expire within 10 years after the date of grant. Options under the Non-Statutory Stock Option Plan expire within 10 years and one month after the date of grant. As of December 31, 1999, there were 29,250 shares reserved for issuance under the 1986 plans. No additional options will be granted under the 1986 plans.

We account for these plans under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," under which compensation cost is not recorded. If compensation cost had been recorded consistent with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (Statement No. 123), our net income and earnings per common share would have been the following pro forma amounts:

	1999		1998		1997
	(In thousands, except per-share amounts)
Net income:
As reported	$	8,457	$	7,574	$	5,307
Pro forma		8,132		7,272		5,130
Basic earnings per common share:
As reported		1.93		1.69		1.19
Pro forma		1.85		1.62		1.15
Diluted earnings per common share:
As reported		1.92		1.67		1.19
Pro forma		1.85		1.62		1.15

Because the Statement No. 123 method of accounting has only been applied to options granted in 1995 or after, the pro forma comparison above may not be representative of the impact of compensation cost in future years.

As of December 31, stock option activity under our plans was as follows:

	1999			1998			1997
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding, beginning of year	378,000	$	13.22	344,250	$	13.07	270,000		$	12.18
Granted	22,500		13.04	33,750		14.78	112,500			12.63
Exercised	—		—	—		—	(38,250	)		5.50

Outstanding, end of year	400,500		13.21	378,000		13.22	344,250			13.07

Exercisable, end of year	274,500		13.20	186,500		13.22	105,750			13.03

The weighted-average fair value as of the date of grant was $6.08 per share for options granted during 1999, $7.05 per share for options granted during 1998 and $5.96 per share for options granted during 1997. The fair value was estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	1999		1998		1997
Expected option life in years	7		7		7
Risk-free interest rate	5.2	%	5.3	%	6.1	%
Expected stock price volatility	34.0	%	35.0	%	31.9	%
Expected dividend payments	—		—		—

The following table summarizes information regarding stock options outstanding and exercisable as of December 31, 1999:

	Range of Exercise Price
	$8.08 to $8.83		$12.33 to $14.00		$17.25
Options outstanding:
Number of shares		29,250		360,000		11,250
Weighted-average remaining contractual life		5.3 years		6.3 years		8.4 years
Weighted-average exercise price	$	8.45	$	13.48	$	17.25
Options exercisable:
Number of shares		24,250		239,000		11,250
Weighted-average exercise price	$	8.52	$	13.48	$	17.25

Retirement Savings Plan: We sponsor a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. Employees are eligible for the plan after one year of service. Each participant can contribute up to 15 percent of compensation. We contribute 25 percent of each participant's contribution, up to a total of 4 percent contributed. Our contribution vests at the rate of 20 percent per year for the second through sixth years of service. In addition, we may make elective contributions as determined by the board of directors. Elective contributions were not made in 1999, 1998 or 1997. Total expense recorded for the plan was $213,000 in 1999, $197,000 in 1998 and $183,000 in 1997.

Stock Purchase Plans: An Employee Stock Purchase Plan and an Independent Contractor Stock Purchase Plan are sponsored to encourage employee and independent contractor ownership of our common stock. Eligible participants specify the amount of regular payroll or contract payment deductions and voluntary cash contributions that are used to purchase shares of our common stock. The purchases are made at the market price on the open market. We pay the broker's commissions and administrative charges for purchases of common stock under the plans.

8. Fair Value of Financial Instruments

The fair value of each class of financial instruments was estimated using the following methods and assumptions:

Cash and cash equivalents: The carrying amount approximated fair value at December 31, 1998, due to the short maturity of these instruments.

Long-term debt: The fair value of our long-term debt is estimated to be $67,822,000 at December 31, 1999. The fair value approximated the carrying amount at December 31, 1998. The fair value was estimated using discounted cash flow analysis. Our current borrowing rates for similar long-term debt were used in this analysis.

9. Quarterly Financial Data (Unaudited)

The following is a summary of the quarterly results of operations for 1999 and 1998:

1999 Quarters	First		Second		Third		Fourth		Total
	(In thousands, except per-share amounts)
Operating revenue	$	48,731	$	54,558	$	55,873	$	60,038	$	219,200
Operating income		3,201		4,496		4,236		5,753		17,686
Net income		1,422		2,198		2,001		2,836		8,457
Basic earnings per common share		.32		.49		.47		.66		1.93
Diluted earnings per common share		.32		.49		.46		.66		1.92

1998 Quarters	First		Second		Third		Fourth		Total
	(In thousands, except per-share amounts)
Operating revenue	$	45,218	$	49,269	$	50,126	$	49,035	$	193,648
Operating income		3,194		4,443		5,113		3,595		16,345
Net income		1,360		2,087		2,501		1,626		7,574
Basic earnings per common share		.30		.47		.56		.36		1.69
Diluted earnings per common share		.30		.46		.55		.36		1.67

The basic and diluted earnings per common share for the 1999 quarters exceed the per share amounts for the year due to changes in the weighted average number of shares outstanding during the year.

Report of Independent Public Accountants

To Marten Transport, Ltd.:

We have audited the accompanying balance sheets of Marten Transport, Ltd. (a Delaware corporation) as of December 31, 1999 and 1998, and the related statements of operations, changes in shareholders' investment and cash flows for each of the three years in the period ended December 31, 1999. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marten Transport, Ltd. as of December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
January 21, 2000

Common Stock Data

Our quarterly stock prices, as reported by The Nasdaq Stock Market, were as follows:

	1999						1998
Quarter	1999						1998
Quarter	High			Low			High			Low
First	$	14	⁵/8	$	12		$	19	¹/4	$	12	¹/2
Second		13	³/4		9	¹/2		18	⁷/8		16
Third		12	¹⁵/16		11	¹/8		18	⁵/8		12	⁷/16
Fourth		12	¹⁵/16		9	¹/2		15	¹/4		12	³/8

The prices do not include adjustments for retail mark-ups, mark-downs or commissions. On December 31, 1999, there were 283 stockholders of record, and an additional 275 beneficial stockholders. We have not paid any cash dividends on our common stock since we became publicly held in September 1986, and do not expect cash dividend payments in the near future.

Who We Are

Marten Transport, Ltd., with headquarters in Mondovi, Wisconsin, strives to be the premium supplier of time- and temperature-sensitive transportation services to customers in the United States and Canada. We serve customers with more demanding delivery deadlines, as well as those who ship products requiring modern temperature-controlled trailers to protect goods.

Founded in 1946, we have been a public company since 1986. Our common stock trades on The Nasdaq Stock Market under the symbol MRTN. At December 31, 1999, we employed 1,492 people, including drivers, office personnel and mechanics.

Our mission is to provide:

•: customers with transportation services that exceed expectations;
•: employees, at all levels, with satisfying and financially rewarding work, and with continued opportunities for professional development;
•: stockholders with a superior return on their investments; and
•: society with a cleaner, safer environment.

Financial Highlights

	Years ended December 31,
	1999			1998			1997
	(Dollars in thousands, except per-share amounts)
FOR THE YEAR
Operating revenue	$	219,200		$	193,648		$	172,412
Operating income		17,686			16,345			12,847
Net income		8,457			7,574			5,307
Operating ratio		91.9	%		91.6	%		92.5	%
PER-SHARE DATA⁽¹⁾
Basic earnings per common share	$	1.93		$	1.69		$	1.19
Diluted earnings per common share		1.92			1.67			1.19
Book value		13.86			11.90			10.21
AT YEAR END
Total assets	$	185,919		$	156,709		$	145,266
Long-term debt, less current maturities		63,599			47,232			30,663
Shareholders' investment		59,605			53,278			45,704

(1): Earnings per common share and book value amounts for 1997 have been retroactively adjusted to reflect a three-for-two stock split effective for stockholders of record as of December 15, 1997.

Five-Year Financial Summary

	Years ended December 31,
	1999		1998		1997		1996		1995
	(In thousands, except per-share amounts)
FOR THE YEAR
Operating revenue	$	219,200	$	193,648	$	172,412	$	146,151	$	137,704
Operating income		17,686		16,345		12,847		6,160		11,378
Net income		8,457		7,574		5,307		1,630		5,009
PER-SHARE DATA⁽¹⁾
Basic earnings per common share	$	1.93	$	1.69	$	1.19	$	.37	$	1.14
Diluted earnings per common share		1.92		1.67		1.19		.37		1.12
AT YEAR END
Total assets	$	185,919	$	156,709	$	145,266	$	138,135	$	123,141
Long-term debt, less current maturities		63,599		47,232		30,663		33,505		27,079
Shareholders' investment		59,605		53,278		45,704		40,044		38,242

(1): Earnings per common share amounts for 1997 and prior years have been retroactively adjusted to reflect a three-for-two stock split effective for stockholders of record as of December 15, 1997.

Corporate Information

Corporate Headquarters
129 Marten Street
Mondovi, Wisconsin 54755
Telephone: (715) 926-4216
Fax: (715) 926-4530
www.marten.com

Stockholder Information
A copy of our 1999 Annual Report on Form 10-K as filed with the Securities and Exchange Commission is available by writing to Darrell D. Rubel, executive vice president and chief financial officer, at our corporate headquarters.

Annual Meeting
Stockholders, employees and friends may attend our annual meeting on Tuesday, May 9, 2000, at 4:00 p.m. at the Ramada Conference Center, 1202 West Clairemont Avenue, Eau Claire, Wisconsin.

Stock Listing
Nasdaq Stock Market symbol: MRTN

Legal Counsel
Oppenheimer Wolff & Donnelly LLP
45 South Seventh Street
Suite 3300
Minneapolis, Minnesota 55402

Independent Public Accountants
Arthur Andersen LLP
45 South Seventh Street
Minneapolis, Minnesota 55402

Transfer Agent and Registrar
ChaseMellon
Shareholder Services, L.L.C.
P. O. Box 3315
South Hackensack, New Jersey 07606
Telephone: (800) 522-6645
TDD: (800) 231-5469
www.chasemellon.com
Direct communications about stock certificates or a change of address to ChaseMellon Shareholder Services.

Public/Financial Relations Counsel
BlueFire Partners
150 South Fifth Street
Suite 1300
Minneapolis, Minnesota 55402

Executive Officers and Directors

Randolph L. Marten
Chairman of the Board, President and Director

Darrell D. Rubel
Executive Vice President, Chief Financial Officer,
Treasurer, Assistant Secretary and Director

Robert G. Smith
Chief Operating Officer

Timothy P. Nash
Vice President of Sales

Franklin J. Foster
Vice President of Finance

Thomas A. Letscher
Secretary
Partner, Oppenheimer Wolff & Donnelly LLP
Minneapolis, Minnesota

Larry B. Hagness
Director
President, Durand Builders Service, Inc.
Durand, Wisconsin

Thomas J. Winkel
Director
Management Consultant
Pewaukee, Wisconsin

Jerry M. Bauer
Director
President, Bauer Built, Incorporated
Durand, Wisconsin

Christine K. Marten
Director
Flight Attendant, Northwest Airlines
Mondovi, Wisconsin

QuickLinks

To Our Stockholders and Employees

1999 Financial Results

A Strong Foundation for the Future

Opportunities for Growth Abound

Management's Discussion and Analysis of Financial Condition and Results of Operations

Report of Independent Public Accountants

Common Stock Data

Who We Are

Financial Highlights

Five-Year Financial Summary

Corporate Information

Executive Officers and Directors

EX-23.1 5 EXHIBIT 23.1 Prepared by MERRILL CORPORATION www.edgaradvantage.com

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by reference in this Form 10-K of our report dated January 21, 2000, included in Form S-8 dated February 23, 1994.

/s/ Arthur Andersen LLP

Minneapolis, Minnesota
March 27, 2000

EX-27.1 6 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENTS OF OPERATIONS AND THE BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 0 0 27,673,000 855,000 0 39,310,000 193,031,000 47,311,000 185,919,000 32,814,000 63,599,000 0 0 43,000 59,562,000 185,919,000 219,200,000 219,200,000 0 201,514,000 0 0 4,042,000 13,864,000 5,407,000 8,457,000 0 0 0 8,457,000 1.93 1.92

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