PAMT CORP 10-Q

Item 1A. Risk Factors.   There have been no material changes to the Company’s risk factors as previously disclosed in Item 1A to Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, except as set forth below.   Risks Related to Our Business   A significant labor dispute that involves one of our customers, or that could otherwise affect our operations, could reduce our revenues and harm our profitability.   A substantial number of our largest customers are members of industrial trade unions, and they are employed under the terms of collective bargaining agreements. The United Auto Workers started a trilateral strike against Ford, General Motors, and Stellantis on September 15, 2023. The UAW has initially employed a new strategy of targeted strikes at select plants, which could have unintended ripple effects on other customer plants and workers. If the UAW expands the scope of the strikes, our revenue and profitability could be negatively impacted. If the UAW and our automotive customers are unable to negotiate new contracts and the customer plants continue to experience slowdowns or closures, our revenue and profitability could be negatively impacted. A labor dispute involving another supplier to our customers that results in a slowdown or closure of our customers’ plants where we provide services could also have a material adverse effect on our business.   Risks Related to Our Common Stock   Our public shareholders may have limited influence over our significant corporate actions.   Matthew T. Moroun, the Chairman of our Board of Directors, is the trustee of family trusts that collectively own greater than 50% of our outstanding common stock. In this capacity, Mr. Moroun holds investment power over the shares of our common stock held by the family trusts. Frederick P. Calderone, a member of our Board of Directors, is the special trustee of certain of these family trusts, and in that capacity, he exercises voting power over the shares held by such trusts, while Mr. Moroun exercises voting power over the shares held by the other family trust of which he is trustee. The special trustee serves at the discretion of the trustee of the trusts, and members of the Moroun family are the beneficiaries of the family trusts. Messrs. Moroun and Calderone have entered into a voting agreement under which Mr. Moroun agreed to vote the shares of our common stock over which he exercises voting power in accordance with and in the same manner as Mr. Calderone votes the shares of our common stock held by the family trusts over which the special trustee exercises voting power. Therefore, votes cast on behalf of the family trusts control any action requiring the general approval of our shareholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger or sale of substantially all of our assets. This concentration of ownership could also limit the price that some investors might be willing to pay for shares of our common stock.   22 Table of Contents   The interests of our controlling shareholders may conflict with those of the Company and our other shareholders.     The interests of the Moroun family trusts could conflict with the interests of the Company or our other shareholders. For example, the concentration of ownership in the trusts could delay, defer, or prevent a change of control of the Company that may otherwise be favorable to the Company and our other shareholders. The votes cast on behalf of the family trusts could also result in our entry into transactions or agreements that our other shareholders do not approve. Our controlling shareholders might also refrain from voting in favor of a transaction that would result in our other shareholders receiving consideration for our common stock that is much higher than its then-current market price. Any such decisions that may be made in the future by our controlling shareholders will be in their absolute discretion, subject to applicable laws and fiduciary duties.     Because we are a “ controlled company ” under NASDAQ rules, we are not subject to certain corporate governance standards that apply to other publicly traded companies.   The NASDAQ rules state that a controlled company is one in which more than 50% of the voting power is held by another person or group of persons acting together. A controlled company may elect not to comply with certain corporate governance requirements, including:     ● a majority of the board of directors consist of independent directors;   ● a nominating and corporate governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and   ● the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.   We are a controlled company under these rules, and these requirements will not apply to us as long as we retain that status. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of NASDAQ.