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OMB APPROVAL |
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OMB Number:
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3235-0059 |
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Expires:
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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ý Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Dynamex, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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ý No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (11-01) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
DYNAMEX INC.
1870 Crown Drive
Dallas, Texas 75234
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 10, 2006
To the Shareholders of DYNAMEX INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Dynamex Inc., a Delaware
corporation, will be held at the offices of the Company, 1870 Crown Drive, Dallas, TX 75234, on
Tuesday, January 10, 2006, at 10:00 A.M. Dallas time for the following purposes:
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To elect six (6) directors of the Company; |
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To ratify the appointment of BDO Seidman, LLP as independent auditors of the
Company for the year ending July 31, 2006; |
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To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof. |
Only shareholders of record at the close of business on November 11, 2005 are entitled to
notice of, and to vote at, the meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting and regardless of the number of shares
you own, you are requested to sign and return the enclosed proxy card in the enclosed envelope
(which requires no postage if mailed in the United States).
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By Order of the Board of Directors,
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/s/ Wayne Kern
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Wayne Kern |
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Secretary |
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Dallas, Texas
November 16, 2005
1
DYNAMEX INC.
1870 Crown Drive
Dallas, Texas 75234
PROXY STATEMENT
For
Annual Meeting of Shareholders
To be Held January 10, 2006
This Proxy Statement is furnished to shareholders of Dynamex Inc., a Delaware corporation
(the Company), in connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Shareholders to be held on Tuesday, January 10, 2006, and
at any adjournments or postponements thereof.
This Proxy Statement with the accompanying Proxy is first being mailed to shareholders on or
about December 2, 2005. The Companys Annual Report, covering the Companys 2005 fiscal year, is
enclosed herewith but does not form any part of the materials for solicitation of proxies.
ACTIONS TO BE TAKEN AT THE MEETING
At the Annual Meeting, holders of the Companys Common Stock (the Common Stock) will
consider and vote (1) to elect as directors of the Company Messrs. Richard K. McClelland, Kenneth
H. Bishop, Brian J. Hughes, Wayne Kern, Stephen P. Smiley and Bruce E. Ranck, (2) to ratify the
appointment of BDO Seidman, LLP as independent auditors of the Company for the year ending July 31,
2006, and (3) to transact such other business as may properly come before the Annual Meeting.
Only shareholders of record at the close of business on November 11, 2005 (the Record Date)
are entitled to notice of, and to vote at, the Annual Meeting. As of the close of business on the
Record Date, the Company had issued and outstanding, and entitled to vote at the Annual Meeting,
11,089,282 shares of Common Stock. Holders of record of Common Stock are entitled to one vote per
share on the matters to be considered at the Annual Meeting.
The presence, either in person or by properly executed proxy, of the holders of record of a
majority of the voting power entitled to vote at the Annual Meeting is necessary to constitute a
quorum at the Annual Meeting. The election as a director of each nominee set forth above requires
the affirmative vote of the holders of record of a plurality of the shares of Common Stock present
in person or by proxy and entitled to vote on the election of directors at the meeting. The
affirmative vote of the holders of a majority of the outstanding common stock, represented in
person or by proxy, at the Annual Meeting is required to approve the proposal to ratify the
selection of auditors.
The enclosed proxy may be revoked at any time before it is exercised by filing with the
Corporate Secretary an instrument revoking it, by submitting a subsequently dated proxy, or by
appearing at the annual meeting and voting in person. Unless revoked, a properly signed and dated
proxy that is returned will be voted in accordance with the directions thereon. If no instructions
are specified, the shares will be voted for the election of the nominees for Director, and for the
ratification of BDO Seidman, LLP as independent auditors. If any other matter or business is
brought before the meeting, the proxy holders may vote the proxies at their discretion. The
directors do not know of any such other matter or business.
If a shareholder owns shares in street name by a broker, the broker, as the record holder of
the shares, is required to vote those shares in accordance with your instructions. If a
shareholder does not give instructions to the broker, the broker will nevertheless be entitled to
vote the shares with respect to discretionary items but will not be permitted to vote the shares
with respect to non-discretionary items (in which case, the shares will be treated as broker
non-votes). Where shareholders have appropriately specified how their proxies are to be voted,
they will be voted accordingly. An automated system administered by the Companys transfer agent
tabulates the votes.
2
Abstentions and broker non-votes will be counted toward determining whether a
quorum is present at the Annual Meeting but are not counted for purposes of the election of
directors. In connection with the other proposals, votes submitted as abstentions on matters to be
voted on at the Annual Meeting will be counted as votes against such matters. Broker non-votes
will not count for or against the matters to be voted on at the Annual Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS
A brief description of each director and executive officer of the Company is provided below.
All current directors of the Company are nominees for director at the Annual Meeting. Directors
hold office until the next annual meeting of the shareholders or until their successor is elected
and qualified. All officers serve at the discretion of the Board of Directors. Should any
director nominee become unable or unwilling to accept nomination or election, the proxy holders may
vote the proxies for the election in his stead of any other person the Board of Directors may
recommend. Each nominee has expressed his intention to serve the entire term for which election is
sought.
Directors
Richard K. McClelland, 54, became the President, Chief Executive Officer and a director of the
Company in May 1995 upon the closing of the Companys acquisition of Dynamex Express (the ground
courier division of Air Canada), where he also served as President since 1988. He was elected as
Chairman of the Board of the Company in February 1996. Prior to joining Dynamex Express in 1986,
Mr. McClelland held a number of advisory and management positions with the Irving Group, Purolator
Courier Ltd. and Sunbury Transport Ltd., where he was engaged in the domestic and international
same-day air, overnight air, and trucking businesses.
Kenneth H. Bishop, 68, has served as a director of the Company since August 1996. Mr. Bishop
is currently Chief Executive Officer of the Winnipeg Habitat for Humanity. From 1974 to August
1996, Mr. Bishop was President and General Manager of Zipper Transportation Services, Ltd. and a
related company (together Zipper) which operated a same-day delivery business in Winnipeg,
Manitoba. The Company acquired Zipper in August 1996.
Brian J. Hughes, 44, has served as a director of the Company since May 1995. Mr. Hughes is
Sr. Vice President Investments of GuideOne Insurance Group and has been with GuideOne since
September 1992. From 1986 to 1992, Mr. Hughes served as Assistant Vice President Investments at
Boatmens National Bank.
Wayne Kern, 73, has served as a director of the Company since February 1996. Mr. Kern served
as Senior Vice President and Secretary of Heritage Media Corporation from 1987 through 1997. From
1991 to 1995, Mr. Kern also served as Executive Vice President of Crown Media, Inc. From 1979 to
1991, Mr. Kern served as the Executive or Senior Vice President, General Counsel and Secretary of
Heritage Communications, Inc. Mr. Kern also currently serves as a director and secretary of
Da-Lite Company.
Stephen P. Smiley, 56, has served as a director of the Company since 1993 and was a Vice
President of the Company from December 1995 through February 1996. Mr. Smiley was President of
Hoak Capital Corporation from 1991 through February 1996. Mr. Smiley joined Hunt Private Equity
Group, Inc. (a private investment company) as Executive Vice President in February 1996, and was
appointed President in January 1997.
Bruce E. Ranck, 56, has served as a director of the Company since March 2002. Mr. Ranck is
Chairman and CEO of Tartan Textile Services, Inc. Mr. Ranck is also a partner in Bayou City
Partners, a venture capital firm. From 1970 through 1999, Mr. Ranck held increasing positions of
responsibility with Browning-Ferris Industries (BFI). In 1990 he was elected to the Board of BFI
and in 1995 became Chief Executive Officer as well as President. Mr. Ranck has served on the
Boards of Furon Company, Chase Bank of Texas and SITA, the largest non-North American waste
services company in the world.
3
Executive Officers
Ray E. Schmitz, 59, was elected Vice President and Chief Financial Officer in March 2002. Mr.
Schmitz joined the Company and was elected Vice President Controller in January 1999. Prior to
joining the Company, Mr. Schmitz was Vice President Controller of EEX Corporation from 1997 to
1999. Previous to that, he was Assistant Controller of ENSERCH Corporation and Controller of
Enserch Exploration, Inc., a subsidiary of ENSERCH Corporation and predecessor to EEX Corporation,
from 1984 to 1996.
Mr. James H. Wicker III, 36, was elected Vice President, General Manager, USA in September
2005. Mr. Wicker served as Vice President Business Development since November 2002. Prior to
that he served as Vice President Information Systems since January 1999. Mr. Wicker joined the
Company as Director, Information Technology in April 1998. Prior to joining the Company, Mr.
Wicker held the position of Director of Information Services at Heritage Media Corporation from
March 1997 to April 1998. Previous to that, he was Director of Information Services of Denton
County, Texas from February 1988 to March 1997.
Mr. Samuel T. Hicks, 64, was elected Corporate Controller in September 2005. Mr. Hicks joined
the Company in July 2005. Prior to joining the Company, Mr. Hicks was Senior Vice President
Chief Financial Officer of MedSolutions, Inc. from 1998 to 2004. Mr. Hicks was a partner in the
Big Four public accounting firm of Ernst &Young LLP from 1977 to 1993.
Operations and Compensation of the Board of Directors
There were 8 meetings of the Board of Directors during fiscal year 2005. No director attended
fewer than 75% of the meetings of the Board (and any committees thereof) that he was required to
attend. The independent directors of the Company meet in executive session during scheduled
in-person Audit Committee meetings since the Audit Committee is composed of the independent
directors. The independent directors met in executive session five times in fiscal 2005.
It is a policy of the Board of Directors to encourage directors to attend each annual meeting
of shareholders. Such attendance allows for direct interaction between shareholders and members of
the Board of Directors. All of the members of the Board of Directors attended the January 2005
meeting of shareholders.
Directors who are employees of the Company do not receive additional compensation for serving
as directors. Each director who is not an employee of the Company will receive an annual fee of
$12,500 as compensation for his or her services as a member of the Board of Directors.
Non-employee directors will receive an additional fee of $1,000 for each meeting of the Board of
Directors attended in person by such director and $500 for each telephonic meeting in which such
director participates. Non-employee directors who serve on a committee of the Board of Directors
will receive $1,000 for each committee meeting attended in person and $500 for each telephonic
committee meeting in which such director participates. Chairmen of the Committees receive $2,000
per quarter, regardless of how many meetings they attend. On the date upon which a non-employee
director is first elected or appointed a member of the Board, he/she receives a grant of a
non-qualified stock option to purchase 3,000 shares of common stock. Non-employee directors
subsequently re-elected at any annual meeting of shareholders shall receive as of the date of such
annual meeting, the grant of a non-qualified stock option to purchase 3,000 shares of common stock.
Options granted to non-employee directors are immediately exercisable. All directors of the
Company are reimbursed for out-of-pocket expenses incurred in attending meetings of the Board of
Directors or committees thereof, and for other expenses incurred in their capacities as directors
of the Company.
Committees of the Board of Directors
The Board of Directors has established four committees: an Audit Committee, a Compensation
Committee, a Nominating and Corporate Governance Committee and an Executive Committee. Each of
these committees has two or more members who serve at the discretion of the Board of Directors.
Each of these committees has a written charter approved by the Board of Directors. A copy of each
charter can be found under the Investor Relations section of our website at
www.dynamex.com. The members of the committees are identified in the following table.
4
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Í = Chairperson
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= Member
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Ë = Financial Expert |
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Audit |
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Executive |
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Nominating and Corporate |
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Committee |
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Committee |
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Committee |
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Governance Committee |
Kenneth H. Bishop |
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Brian J. Hughes |
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Wayne Kern |
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Í |
Richard K. McClelland |
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Í |
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Bruce E. Ranck |
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ËÍ |
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Stephen P. Smiley |
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Í |
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The Audit Committee hires and replaces independent auditors as appropriate, evaluates the
performance of, independence of and the non-audit services provided by independent auditors,
evaluates the quality of the Companys accounting principles and financial reporting and makes
recommendations with respect to those matters to the Board of Directors. The Audit Committee
consists of all five outside directors, Messrs. Bishop, Hughes, Kern, Smiley and Ranck. The Audit
Committee met 5 times during fiscal year 2005. The Board of Directors has determined that Mr.
Ranck is an audit committee financial expert as defined in Item 401 (h) of Regulation S-K. Mr.
Ranck and each of the other members of this committee is an independent director as defined in
Rule 4200 of the Marketplace Rules of the National Association of Securities Dealers, Inc. See
Report of the Audit Committee included elsewhere in this prospectus.
The Compensation Committee is responsible for reviewing and making recommendations to the
Board of Directors with respect to compensation of executive officers, other compensation matters
and awards under the Companys stock option plan. During fiscal year 2005, the Compensation
Committee consisted of three members, Messrs. Hughes, Bishop and Smiley (none of whom is an officer
or employee of the Company). The Compensation Committee met 6 times during fiscal year 2005. See
Report of the Compensation Committee included elsewhere in this prospectus.
The Executive Committee exercises all of the powers and authority of the Board of Directors in
the management of the business and affairs of the Company, except as otherwise reserved in the
Company Bylaws or designated by resolution of the Board of Directors for action by the full board
or another committee thereof. The Executive Committee consists of two members, Messrs. McClelland
and Smiley. There were no meetings held by the Executive Committee during fiscal year 2005.
The Nominating and Corporate Governance Committee is responsible for recommending to the full
Board of Directors candidates for election to the Board of Directors, recommending members of and
Chairperson for each Board committee, periodic reviews and assessments of the Companys Corporate
Governance Principles and the Companys Code of Business Ethics and Conduct, overseeing the annual
self-evaluation of the performance of the Board and making recommendations on those matters to the
Board. The Nominating and Corporate Governance Committee met once during fiscal year 2005. The
Committee consists of three members, Messrs. Kern, Smiley and Hughes, each of whom is an
independent director as defined in Rule 4200 of the Marketplace Rules of the National Association
of Securities Dealers, Inc.
Qualifications to Serve as Director
Each candidate for director must possess at least the following specific minimum
qualifications:
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Each candidate shall be prepared to represent the best interests of all the Companys
shareholders and not just one particular constituency. |
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Each candidate shall be an individual who has demonstrated integrity and ethics in his/her
personal and professional life and has established a record of professional accomplishment in
his/her chosen field. |
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No candidate shall have any material personal, financial or professional interest in any
present or potential competitor of the Company. |
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Each candidate shall be prepared to participate fully in activities of the Board of
Directors, including active membership in at least one Committee of the Board of Directors and
attendance at, and active participation in, meetings of the Board of Directors and the
Committee(s) of the Board of Directors of which he or she is a member, and not have other
personal or professional commitments that would, in the Governance and Nominating Committees
sole judgment, interfere with or limit his or her ability to do so. |
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In addition, the Governance and Nominating Committee also considers it desirable that
candidates possess the following qualities or skills: |
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Each candidate shall contribute to the overall diversity of the Board of
Directors diversity being broadly construed to mean a variety of opinions,
perspectives, personal and professional experiences and backgrounds, such as gender,
race and ethnicity differences, as well as other differentiating characteristics. |
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Each candidate should contribute positively to the existing chemistry and
collaborative culture among the members of the Board of Directors. |
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Each candidate should possess professional and personal experiences and
expertise relevant to the Companys business. Relevant experiences might include,
among other things, executive management experience within the transportation
industry, and relevant senior level experience in one or more of the following areas
finance, accounting, sales and marketing, organizational development, information
technology and public relations. |
Although not an automatic disqualifying factor, the inability of a candidate to meet the
independence and other governing standards of the NYSE or the SEC will be a significant negative
factor in any assessment of a candidates suitability.
Internal Process of Identifying Candidates
The Nominating and Corporate Governance Committee will use a variety of means for identifying
potential nominees for director, including the use of outside search firms and recommendations from
current members of the Board of Directors and from shareholders. In determining whether to
nominate a candidate, the Nominating and Corporate Governance Committee will consider the current
composition and capabilities of serving board members, as well as additional capabilities
considered necessary or desirable in light of existing and future Company needs. One or more of
the members of the Nominating and Corporate Governance Committee may interview, or have an outside
search firm interview, a prospective candidate who is identified as having high potential to
satisfy the expectations, requirements, qualities and responsibilities for membership on the Board
of Directors. Prospective candidates may also be interviewed by other directors who are not
members of the Nominating and Corporate Governance Committee. Reports from those interviews or
from Nominating and Corporate Governance Committee members with personal knowledge and experience
with the candidate, resumes, information provided by other contacts and other information deemed
relevant by the Nominating and Corporate Governance Committee are then considered in determining
whether a candidate shall be nominated. The Nominating and Corporate Governance Committee also
exercises its independent business judgment and discretion in evaluating the suitability of a
candidate for nomination.
Nomination Rights of Shareholders
Any shareholder of the Company may recommend one or more candidates to be considered by the
Nominating and Corporate Governance Committee as a potential nominee or nominees for election as
director of the Company at an annual meeting of shareholders in accordance with Delaware corporate
law In order for the candidate recommendation to be timely for the Companys 2007 annual meeting
of shareholders, a shareholders notice to the Companys Secretary must be delivered to the
Companys principal executive offices no later than July 15, 2006. Any such recommendations
received by the Secretary will be presented to the Nominating and Corporate
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Governance Committee for consideration. All candidates (whether identified internally or by a shareholder) who, after
evaluation based upon the criteria and process described in Internal Process of Identifying
Candidates above, are then recommended by the Nominating and Corporate Governance Committee and
approved by the Board, will be included in the Companys recommended slate of director nominees in
its proxy statement.
Shareholder Communications with the Board of Directors
Any Company shareholder who wishes to communicate with the Board of Directors or with an
individual director may direct such communications to Mr. Wayne Kern, in his capacity as Corporate
Secretary, at Dynamex Inc. 1870 Crown Drive, Dallas, Texas 75234-9416. The communication must be
clearly addressed to Mr. Kern or to a specific director. The Board of Directors has approved a
process pursuant to which Mr. Kern will review and forward any such correspondence to the
appropriate person or persons for response.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers serving as a member of
the Companys Board of Directors or Compensation Committee.
Certain Relationships and Related Transactions
There were no transactions between the executive officers and directors and the Company, and
no advances were made to the executive officers during fiscal 2005.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
ELECTION OF ALL OF THE NOMINEES TO THE BOARD OF DIRECTORS.
7
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed BDO Seidman, LLP as the Companys independent public
accountants for the year ending July 31, 2006. BDO Seidman, LLP has served as the Companys
independent public accountants for the prior seven fiscal years ended July 31, 2005. Although the
appointment of independent public accountants is not required to be approved by the shareholders,
the Board of Directors believes shareholders should participate in the selection of the Companys
independent public accountants. Accordingly, the shareholders will be asked at the meeting to
ratify the Boards appointment of BDO Seidman, LLP as the Companys independent public accountants
for the year ending July 31, 2006.
Representatives of BDO Seidman, LLP will be present at the meeting. They will have an
opportunity to make a statement if they so desire and will be available to respond to appropriate
questions of the shareholders.
Principal Accountant Fees and Services
The following is a summary of the fees billed to Dynamex Inc by BDO Seidman, LLP for
professional services rendered for the fiscal years ended July 31, 2005 and 2004:
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Fiscal 2005 Fees |
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Fiscal 2004 Fees |
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Audit Fees |
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535,870 |
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280,000 |
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Audit-Related Fees |
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8,000 |
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14,206 |
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Other Fees |
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Tax Fees |
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79,674 |
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Total Fees |
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543,870 |
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$ |
373,880 |
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Audit Fees. Consists of fees billed for professional services rendered for the audit of
Dynamex consolidated financial statements, the audit of internal controls over financial reporting
(i.e., the Sec. 404 Audit), the review of the interim consolidated financial statements included in
quarterly reports and services that are normally provided by BDO Seidman, LLP in connection with
statutory and regulatory filings or engagements.
Audit-Related Fees. Consists of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of Dynamex consolidated financial
statements and are not reported under Audit Fees. These services include employee benefit plan
audits and consultations concerning financial accounting and reporting standards.
Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice
and tax planning. These services include assistance regarding federal, state and international tax
compliance, tax audit defense and international tax planning . These services were
discontinued as of July 31, 2004.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Auditors
The Audit Committees policy is to pre-approve all audit and permissible non-audit services
provided by the independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is generally provided for up to one year
and any pre-approval is detailed as to the particular service or category of services and is
generally subject to a specific budget. The independent auditors and management are required to
periodically report to the Audit Committee regarding the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the services performed
to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO RATIFY THE APPOINTMENT
OF
BDO SEIDMAN, LLP AS INDEPENDENT PUBLIC ACCOUNTANTS AS DESCRIBED ABOVE.
8
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee shall not be deemed to be soliciting material or to
be filed with the Securities and Exchange Commission nor shall this information be incorporated
by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934, each as amended, except to the extent that Dynamex specifically incorporates it by
reference into a filing.
The Audit Committee evaluates audit performance, engages and manages relations with the
Companys independent accountants and evaluates policies and procedures relating to internal
accounting functions and controls. The Board of Directors has adopted a written charter for the
Audit Committee that details the responsibilities of the Audit Committee.
The Audit Committee members are not professional accountants or auditors, and their functions
are not intended to duplicate or to certify the activities of management and the independent
auditor. The Audit Committee oversees the Companys reporting process on behalf of the Board of
Directors. The Companys management has primary responsibility for the financial statements and
reporting process, including systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee has reviewed and discussed with management the audited
financial statements included in the Annual Report on Form 10-K for the fiscal year ended July 31,
2005, which management has represented to the Audit Committee, have been prepared in accordance
with accounting principles generally accepted in the United States of America.
The Committee discussed with representatives of BDO Seidman, LLP, the Companys independent
auditors, the matters required to be discussed by Statement on Auditing Standards Number 61
(Communication with Audit Committees), as amended by Statement on Auditing Standards No. 90 (Audit
Committee Communications), and Securities and Exchange Commission rules. In addition, the Audit
Committee received from BDO Seidman, LLP written disclosures required by the Independence Standards
Board Standard Number 1 (Independent Discussions with Audit Committee), and has discussed with that
firm the independent auditors independence, and has considered whether the provision of non-audit
services is compatible with maintaining such firms independence.
The Audit Committee further discussed with the independent accountants the overall scope and
plans for their respective audits. The Audit Committee meets periodically with the independent
accountants, with and without management present, to discuss the results of their examination,
their evaluations of our internal controls, and the overall quality of our financial reporting.
Based upon the foregoing disclosures, representations, reports and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial statements for the
Companys 2005 fiscal year be included in the Companys Annual Report on Form 10-K for the year
ended July 31, 2005 for filing with the Securities and Exchange Commission.
Dated: September 21, 2005
Audit Committee
Bruce E. Ranck, Chairperson
Wayne Kern
Kenneth H. Bishop
Brian J. Hughes
Stephen P. Smiley
9
REPORT OF THE COMPENSATION COMMITTEE
The following Report of the Compensation Committee shall not be deemed to be soliciting material
or to be filed with the Securities and Exchange Commission nor shall this information be
incorporated by reference into any future filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, each as amended, except to the extent that Dynamex specifically incorporates
it by reference into a filing.
The Companys Compensation Committee (the Committee) is empowered to review and recommend to
the full Board of Directors the annual compensation and compensation procedures for all executive
officers of the Company. The Committee (comprised solely of non-employee directors) also
administers the Companys Stock Option Plan.
As a matter of policy, the Compensation Committee believes that the annual compensation of the
executive officers should consist of both a base salary component and bonus component. The base
salary component should be based generally on subjective factors and include the contribution the
executive officer made and is anticipated to make to the success of the Company, the level of
experience and responsibility of the executive officer, the competitive position of the Companys
executive compensation and the Companys historical levels of compensation for executive officers.
The Compensation Committee does not expect to assign quantitative relative weights, however, to any
of these factors. The bonus component of the annual compensation of the executive officers should
provide executive officers with the opportunity to earn a significant percentage of their base
salary in the form of incentive compensation, which therefore puts a significant portion of their
total compensation at risk. This incentive compensation is contingent upon the achievement of
certain agreed upon individual goals for each executive officer and the achievement of certain
corporate objectives such as continued growth in the Companys earnings and revenues.
The Company does not provide for any long-term compensation for executive officers other than
through the granting of stock options. The Committee believes that the grant of stock options
enables the Company to more closely align the economic interest of the executive officers to those
of the shareholders. Option grants are made at the discretion of the Compensation Committee. The
number of stock options granted to each executive employee is based primarily on their relative
positions and responsibilities within the Company, and contributions to the Company.
Pursuant to his employment contract with the Company, Richard K. McClelland, the Companys
chief executive officer, is entitled to receive an annual bonus not to exceed 60% of his base pay
for the fiscal year then ended which is based on the achievement of corporate growth, earnings and
debt reduction targets as well as the achievement of personal objectives. Mr. McClelland was not
awarded an annual bonus for the fiscal year ended July 31, 2005 under his employment contract.
However, Mr. McClelland was awarded a discretionary bonus of $75,000 on September 28, 2005 by the
Company.
Dated: October 24, 2005
Compensation Committee
Stephen P. Smiley (Chairman)
Brian J. Hughes
Kenneth H. Bishop
10
Executive Compensation
The following summary compensation table sets forth the total annual compensation paid or
accrued by the Company to or for the account of the Chief Executive Officer and the other executive
officers of the Company whose total salary and bonus for the fiscal year ended July 31, 2005
exceeded $100,000:
Summary Compensation Table
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Long-term |
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Compensation |
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Annual Compensation |
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Awards |
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Securities |
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Underlying |
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Name and Principal Position |
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Year |
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Salary ($) |
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Bonus ($) (1) |
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Options |
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Richard K. McClelland |
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2005 |
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345,769 |
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President and Chief Executive Officer |
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2004 |
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304,423 |
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195,000 |
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35,000 |
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2003 |
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289,423 |
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248,750 |
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Ray E. Schmitz |
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2005 |
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224,319 |
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Vice President Chief Financial Officer |
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2004 |
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204,615 |
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100,261 |
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22,000 |
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2003 |
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202,838 |
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144,640 |
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James H. Wicker III |
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2005 |
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210,048 |
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Vice President Business Development |
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2004 |
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191,462 |
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92,346 |
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22,000 |
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2003 |
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181,242 |
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119,384 |
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(1) |
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Messrs. McClelland, Schmitz and Wicker did not meet all financial goals for fiscal 2005
and therefore did not earn a bonus for the year. However, on September 28, 2005, the
Compensation Committee of the Board of Directors awarded discretionary bonuses to Messrs.
McClelland, Schmitz and Wicker in the amounts of $75,000, $50,000 and $50,000,
respectively, to recognize contributions made by those individuals during fiscal 2005.
These amounts are not included in the table above. |
Employment and Consulting Agreements
The Company has entered into an employment agreement with Mr. McClelland which provides for
the payment of a base salary in the annual amount of $375,000, participation in an executive bonus
plan, an auto allowance of Cdn $1,250 per month and participation in other employee benefit plans.
Unless terminated earlier, the employment agreement shall continue until November 30, 2006, upon
which date such agreement will be automatically extended for successive one-year renewal terms
unless notice is given upon the terms provided in such agreement. Additionally, upon a sale or
transfer of substantially all of the assets of the Company or certain other events that constitute
a change of control of the Company, including the acquisition by a shareholder of securities
representing 15% of the votes that may be cast for director elections, the Company shall continue
to pay Mr. McClelland the compensation set forth in such agreement for the greater of two years
from the date of such change of control or the remainder of the agreement term. During the term of
the employment agreement and pursuant to such agreement, Mr. McClelland shall be a member of the
Board of Directors of the Company.
Messrs. Schmitz and Wicker have executed retention agreements with the Company that provide
certain benefits in the event their employment is terminated subsequent to a change in control of
the Company, as defined in the retention agreements. The retention agreements provide that if the
officer is terminated, or if the officer elects to terminate employment under certain
circumstances, the officer shall be entitled to a lump-sum payment of two times the sum of the
officers base salary and target bonus, an 18 month continuation of employee benefits, and
reimbursement of certain legal fees, expenses, and any excise taxes.
11
1996 Stock Option Plan
There were no options granted during fiscal 2005 to purchase shares of the Companys Common
Stock granted under the Option Plan to the Executive Officers named in the Summary Compensation
Table during fiscal 2005.
The following table sets forth information with respect to the unexercised options to purchase
shares of the Companys Common Stock granted under the Option Plan to the Executive Officers named
in the Summary Compensation Table and held by them at July 31, 2005.
Option Exercises in Fiscal Year 2005 and Fiscal Year-end 2005 Option Values
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Number of |
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securities |
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underlying |
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unexercised options |
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Value of unexercised in- |
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Shares |
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at FY - end (#) |
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the-money options at FY - |
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acquired on |
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Value |
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Exercisable / |
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end ($) Exercisable / |
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exercise (#) |
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realized ($) |
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Unexercisable |
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Unexercisable (1) |
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Richard K. McClelland |
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99,000 |
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985,050 |
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112,000/40,000 |
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1,060,939/288,280 |
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Ray E. Schmitz |
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59,400/25,600 |
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879,496/188,240 |
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James H. Wicker III |
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26,400 |
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437,533 |
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15,000/25,600 |
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125,992/188,240 |
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(1) |
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Based on the closing price of the Companys Common Stock on July 29, 2005 which price was
$17.69 per share. |
Equity Compensation Plan Information
The following table sets forth information concerning the shares of Common Stock that may be
issued, upon exercise of options or the grant of restricted stock awards, to all directors and
eligible employees, including officers at July 31, 2005.
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Plan category |
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Number of securities to be |
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Weighted-average |
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Number of securities |
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issued upon exercise of |
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exercise price of |
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remaining available for |
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outstanding options, |
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outstanding options, |
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future issuance under |
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warrants and rights |
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warrants and rights |
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equity compensation |
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plans (1) |
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Equity compensation
plans approved by
security holders |
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630,780 |
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$ |
7.68 |
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578,356 |
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Equity compensation
plans not approved by
security holders |
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Total |
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630,780 |
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$ |
7.68 |
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578,356 |
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(1) |
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Includes 102,000 shares reserved for future issuance to non-employee directors. |
12
Section 16(a) Beneficial Ownership Reporting Compliance
Under the securities laws of the United States, the Companys directors and officers, and
persons who own more than 10% of the Companys common stock, are required to report their initial
ownership of the Companys common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission (SEC). Such persons are required by SEC regulation to furnish
the Company with copies of all such reports.
To the Companys knowledge, based solely on its review of the copies of such reports and
amendments thereto furnished to the Company, the Company believes that during the Companys fiscal
year ended July 31, 2005, all Section 16(a) filing requirements applicable to the Companys
officers, directors, and ten percent shareholders were met.
Beneficial Ownership of Common Stock
The following table sets forth certain information regarding the beneficial ownership of the
Companys common stock as of October 31, 2005 for (i) each person known by the Company to own
beneficially more than 5% of the common stock, (ii) each director, (iii) each Named Executive and
(iv) all directors and executive officers of the Company as a group. Except pursuant to applicable
community property laws and except as otherwise indicated, each shareholder identified in the table
possesses sole voting and investment power with respect to its or his shares.
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Shares Beneficially Owned |
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Name of Beneficial Owner |
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Number (1) |
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Percent |
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Directors and executive officers: |
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Richard K. McClelland |
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125,000 |
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1.13 |
% |
Kenneth H. Bishop |
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34,422 |
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* |
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Brian J. Hughes (2) |
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* |
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Wayne Kern |
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28,460 |
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* |
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Bruce E. Ranck |
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30,000 |
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* |
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Ray E. Schmitz |
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69,400 |
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* |
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Stephen P. Smiley |
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24,160 |
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* |
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James H. Wicker III |
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15,000 |
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* |
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All directors and executive officers as a group |
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326,442 |
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2.94 |
% |
Other 5% shareholders: |
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AMVESCAP PLC (3) |
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1,268,128 |
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11.42 |
% |
30 Finsbury Square
London EC2A 1AG England |
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Thomas F. Frist III (4) |
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830,600 |
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7.48 |
% |
3100 West End Ave., Ste 500
Nashville, TN 37203 |
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Pike Capital Partners, LP (5) |
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772,000 |
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6.95 |
% |
275 Madison Ave., Ste 418
New York, NY 10016 |
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* |
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Indicates less than 1%. |
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(1) |
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Includes shares issuable upon the exercise of stock options outstanding and fully vested on
or within 60 days after October 31, 2005. |
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(2) |
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Excludes 43,678, shares beneficially owned by GuideOne Insurance Group, Inc., which employs
Mr. Hughes as Vice President Investments. Mr. Hughes disclaims beneficial ownership of
such shares. |
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(3) |
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Based on information as of September 30, 2005 as reported on Schedule 13G by AMVESCAP PLC.
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(4) |
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Based on information as of June 2, 2005 as reported on Schedule 13G by Thomas F. Frist III. |
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(5) |
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Based on information as of March 3, 2005 as reported on Schedule 13G by Pike Capital
Partners, LP. |
13
Stock Price Performance
Set forth below is a line graph indicating the stock price performance of the Companys common
stock for the period beginning August 1, 2000 and ending July 31, 2005 as contrasted with the
NASDAQ Composite Index ** and the AMEX Composite Index and the Russell 2000 Stock Index***. The
graph assumes that $100 was invested at the beginning of the period and has been adjusted for any
stock dividends distributed after August 1, 2005. No cash or stock dividends have been paid during
this period.
COMPARATIVE CUMULATIVE TOTAL RETURN
AMONG DYNAMEX INC.,
NASDAQ COMPOSITE INDEX, AMEX COMPOSITE INDEX
AND RUSSELL 2000 INDEX
ASSUMES $100 INVESTED ON AUGUST 1, 2000
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING JULY 31, 2005
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** |
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The Company transferred its listing to the NASDAQ National Market from the Amex on March 14,
2005. |
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The Russell 2000 Stock Index represents companies with a market capitalization similar to
that of the Company. The Company does not believe it can reasonably identify a peer group
because it believes that there are only two public companies engaged in lines of business
directly comparative to those of the Company. |
14
OTHER MATTERS
Miscellaneous
The Board of Directors knows of no other matters that are likely to come before the Annual
Meeting. If any other matters should properly come before the Annual Meeting, it is the intention
of the persons named in the accompanying form of Proxy to vote on such matters in accordance with
their best judgment.
Shareholder Proposals for 2007 Annual Meeting
Any shareholder proposal to be presented for action at the 2007 Annual Meeting of Shareholders
must be received at the Companys principal executive offices no later than July 15, 2006, for
inclusion in the proxy statement and form of proxy relating to the 2007 annual meeting.
The solicitation of proxies is made on behalf of the Board of Directors of the Company, and
the cost thereof will be borne by the Company. The Company will also reimburse brokerage firms and
nominees for their expenses in forwarding proxy material to beneficial owners of the Common Stock
of the Company. In addition, officers and employees of the Company (none of whom will receive any
compensation therefore in addition to their regular compensation) may solicit proxies. The
solicitation will be made by mail and, in addition, may be made by email, telegrams, personal
interviews, or telephone.
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By Order of the Board of Directors |
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Dated: November 16, 2005
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/s/ Wayne Kern |
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Wayne Kern
Secretary |
15
PROXY
DYNAMEX INC.
The undersigned hereby (a) acknowledges receipt of the Notice of Annual Meeting of
Shareholders of Dynamex Inc. (the Company) to be held on January 10, 2006, at 10:00 a.m., Central
Standard Time, and the Proxy Statement in connection therewith, and (b) appoints Richard K.
McClelland his proxy, with full power of substitution and revocation, for and in the name, place
and stead of the undersigned, to vote upon and act with respect to all of the shares of Common
Stock of the Company standing in the name of the undersigned or with respect to which the
undersigned is entitled to vote and act at said meeting or at any adjournment thereof, and the
undersigned directs that his proxy be voted as follows:
ELECTION OF DIRECTORS
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FOR nominees listed below except as marked to the contrary below |
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WITHHOLD AUTHORITY to vote for all nominees listed below |
Richard K. McClelland, Kenneth H. Bishop, Brian J. Hughes, Wayne Kern, Bruce E. Ranck and Stephen
P. Smiley
INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees name in
the space below.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
IN THE DISCRETION OF THE PROXY, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
FOR AGAINST ABSTAIN
IMPORTANT: SIGN ON OTHER SIDE
16
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTORS AND TO RATIFY THE APPOINTMENT OF INDEPENDENT
AUDITORS.
The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or act with
respect to such stock and hereby ratifies and confirms all that said proxies, their substitutes, or
any of them, may lawfully do by virtue hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
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Dated:______________________________________________________ |
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____________________________________________________________
Signature |
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____________________________________________________________
(Signature if held jointly) |
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Please date the proxy and sign your name exactly as
it appears hereon. Where there is more than one
owner, each should sign. When signing as an
attorney, administrator, executor, guardian or
trustee, please add your title as such. If executed
by a corporation, the proxy should be signed by a
duly authorized officer. Please sign the proxy and
return it promptly whether or not you expect to
attend the meeting. You may nevertheless vote in
person if you do attend. |
17