PAMT CORP 10-K

Item 9A. Controls and Procedures.   Evaluation of Disclosure Controls and Procedures   Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.   Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2020, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.   Changes in Internal Control Over Financial Reporting   We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.   There were no changes in our internal control over financial reporting that occurred during the last quarter of the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   Management ’ s Report on Internal Control Over Financial Reporting   Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2020. Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included below.   - 64 - Table of Contents   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   Board of Directors and Stockholders P.A.M. Transportation Services, Inc.   Opinion on internal control over financial reporting We have audited the internal control over financial reporting of P.A.M. Transportation Services, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control — Integrated Framework issued by COSO.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2020, and our report dated March 5, 2021 expressed an unqualified opinion on those financial statements.   Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management ’ s Report on Internal Control Over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.   Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.     /s/ GRANT THORNTON LLP   Tulsa, Oklahoma March 5, 2021   - 65 - Table of Contents   Item 9B. Other Information.   None.   PART III   Portions of the information required by Part III of Form 10-K are, pursuant to General Instruction G-(3) of Form 10-K, incorporated by reference from our definitive proxy statement to be filed pursuant to Regulation 14A for our Annual Meeting of Stockholders to be held on May 5, 2021. We will, within 120 days of the end of our fiscal year, file with the Securities and Exchange Commission a definitive proxy statement pursuant to Regulation 14A.   Item 10. Directors, Executive Officers and Corporate Governance.   The information presented under the captions “Election of Directors,” “Executive Compensation,” “Delinquent Section 16(a) Reports,” “Corporate Governance – Code of Ethics,” “Corporate Governance – Director Nominating Process” and “Corporate Governance – Board Committees,” in the proxy statement is incorporated herein by reference.   Item 11. Executive Compensation.   The information presented under the captions “Executive Compensation,” “Corporate Governance – Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” in the proxy statement is incorporated herein by reference.   Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.   The information presented under the caption “Security Ownership of Certain Beneficial Owners and Management” in the proxy statement is incorporated herein by reference.   Equity Compensation Plan Information   The following table summarizes, as of December 31, 2020, information about compensation plans under which equity securities of the Company are authorized for issuance:   Plan Category   Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)     Weighted-average exercise price of outstanding options, warrants and rights (1)     Number of securities remaining available for future issuance under equity compensation plans   Equity Compensation Plans approved by Security Holders     61,035       -       361,516                             Equity Compensation Plans not approved by Security Holders     -       -       -                             Total     61,035       -       361,516       (1) Consists of unvested shares of restricted stock, which do not require the payment of an exercise price.   Item 13. Certain Relationships and Related Transactions, and Director Independence.   The information presented under the captions “Transactions with Related Persons” and “Corporate Governance – Director Independence” in the proxy statement is incorporated here by reference.   - 66 - Table of Contents   Item 14. Principal Accounting Fees and Services.   The information presented under the caption “Independent Public Accountants – Principal Accountant Fees and Services” in the proxy statement is incorporated here by reference.   PART IV   Item 15. Exhibits, Financial Statement Schedules.   (a) Financial Statements and Schedules.     (1) Financial Statements: See Part II, Item 8 hereof.           Report of Independent Registered Public Accounting Firm - Grant Thornton LLP Consolidated Balance Sheets - December 31, 2020 and 2019 Consolidated Statements of Operations - Years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Comprehensive Income - Years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2020, 2019 and 2018 Consolidated Statements of Cash Flows - Years ended December 31, 2020, 2019 and 2018 Notes to Consolidated Financial Statements     (2) Financial Statement Schedules.   All schedules for which provision is made in the applicable accounting regulations of the SEC are omitted as the required information is inapplicable, or because the information is presented in the consolidated financial statements or related notes.   - 67 - Table of Contents     (3) Exhibits.   Exhibit #   Description of Exhibit           3.1   Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2002, filed on May 15, 2002)       3.2   Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant, filed with the Secretary of State of the State of Delaware on April 30, 2020 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 1, 2020)       3.3   Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on December 11, 2007)       3.4   First Amendment to Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on January 7, 2020)       3.5   Second Amendment to Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed on August 5, 2020)       4.1   Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 under the Securities Act of 1933, as filed with the Securities and Exchange Commission on July 30, 1986, Registration No. 33-7618, as amended on August 8, 1986, September 3, 1986 and September 10, 1986)       4.2   Description of Capital Stock of the Registrant       10.1 (1) Employment Agreement between the Registrant and Joseph A. Vitiritto, dated August 4, 2020 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on August 5, 2020)       10.2 (1) Employment Agreement between the Registrant and Allen W. West, dated March 7, 2019 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on March 11, 2019)       10.3 (1) 2014 Amended and Restated Stock Option and Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 23, 2014)       10.4   Second Amended and Restated Loan Agreement, dated August 12, 2020 by and among P.A.M. Transport, Inc., First Horizon Bank (formerly First Tennessee Bank National Association) and the Company (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed on November 6, 2020)       10.5   Fifth Amended and Restated Consolidated Revolving Credit Note, dated January 25, 2019, by P.A.M. Transport, Inc. in favor of First Tennessee Bank National Association (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on January 31, 2019)       10.6   Amended and Restated Security Agreement dated March 28, 2016 by between P.A.M. Transport, Inc. and First Tennessee Bank National Association (incorporate by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed on April 1, 2016)       10.7   First Amendment to Amended and Restated Security Agreement, dated January 25, 2019, by and between P.A.M. Transport, Inc. and First Tennessee Bank National Association (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed on January 31, 2019)       10.8   Fifth Amended and Restated Guaranty Agreement of the Company, dated January 25, 2019, in favor of First Tennessee Bank National Association (incorporated by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K filed on January 31, 2019)        21.1   Subsidiaries of the Registrant        23.1   Consent of Grant Thornton LLP        31.1   Rule 13a-14(a) Certification of Principal Executive Officer   - 68 - Table of Contents    31.2   Rule 13a-14(a) Certification of Principal Financial Officer        32.1   Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer       101.INS   Inline XBRL Instance Document       101.SCH   Inline XBRL Taxonomy Extension Schema Document       101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document       101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document       101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document       101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document       104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)       (1) Management contract or compensatory plan or arrangement.   - 69 - Table of Contents   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.       P.A.M. TRANSPORTATION SERVICES, INC.           Dated: March 4, 2021 By:    /s/ Joseph. A. Vitiritto       JOSEPH A. VITIRITTO       President and Chief Executive Officer       (principal executive officer)           Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.                   Dated: March 4, 2021 By:    /s/ Michael D. Bishop       MICHAEL D. BISHOP, Director           Dated: March 4, 2021 By:    /s/ Frederick P. Calderone       FREDERICK P. CALDERONE, Director           Dated: March 4, 2021 By:    /s/ W. Scott Davis       W. SCOTT DAVIS, Director           Dated: March 4, 2021 By:    /s/ Edwin J. Lukas       EDWIN J. LUKAS, Director           Dated: March 4, 2021 By:    /s/ Franklin H. McLarty       FRANKLIN H. MCLARTY, Director           Dated: March 4, 2021 By:    /s/ H. Pete Montaño       H. PETE MONTAÑO, Director           Dated: March 4, 2021 By:    /s/ Matthew J. Moroun       MATTHEW J. MOROUN, Director           Dated: March 4, 2021 By:    /s/ Matthew T. Moroun       MATTHEW T. MOROUN, Director and Chairman of the Board           Dated: March 4, 2021 By:    /s/ Joseph. A. Vitiritto       JOSEPH A. VITIRITTO       President and Chief Executive Officer       (principal executive officer)           Dated: March 4, 2021 By:    /s/ Allen W. West       ALLEN W. WEST       Vice President-Finance, Chief Financial Officer,       Secretary and Treasurer       (principal financial and accounting officer)     - 70 -