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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. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TRANSIT GROUP, 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):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[TRANSIT GROUP, INC. LOGO APPEARS HERE]
2859 Paces Ferry Road, Suite 1740
Atlanta, Georgia 30339
(770) 444-0240
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders of Transit Group, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders, and any
adjournment thereof (the "Meeting"), of Transit Group, Inc. ("TGI"), will be
held at the Marriott Northwest, 200 Interstate North Parkway NW, Atlanta,
Georgia 30339, on Thursday, May 18, 2000, at 9:30 A.M. Eastern Daylight Time,
for the following purposes:
1. To elect six directors of TGI to serve for the ensuing year and until
their successors are duly elected and qualified (Proposal 1);
2. To ratify the appointment of PricewaterhouseCoopers LLP as our
independent accountants for the fiscal year ending December 31, 2000
(Proposal 2); and
3. To transact such other business as may properly come before the Meeting.
Only holders of the common stock of record at the close of business on March
24, 2000 (the "record date") will be entitled to notice of and to vote at the
Meeting.
By Order of the Board of Directors,
/s/ Philip A. Belyew
--------------------
Philip A. Belyew
Chief Executive Officer
April 21, 2000
Atlanta, Georgia
Regardless of whether you plan to attend the Meeting, you are urged to
complete, sign and return the enclosed proxy in the envelope provided, which
requires no postage if mailed in the United States.
[TRANSIT GROUP, INC. LOGO APPEARS HERE]
2859 Paces Ferry Road, Suite 1740
Atlanta, Georgia 30339
(770) 444-0240
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 18, 2000
This Proxy Statement is furnished in connection with the solicitation by our
Board of Directors (the "Board") of proxies for use at the Annual Meeting of
our shareholders, and any adjournment thereof (the "Meeting"). The Meeting
will be held at the Marriott Northwest, 200 Interstate North Parkway NW,
Atlanta, Georgia 30339, on Thursday May 18, 2000, at 9:30 A.M. Eastern
Daylight Time. The Meeting is convened for the purposes set forth herein and
in the accompanying Notice of Annual Meeting of Shareholders.
This Proxy Statement, accompanying proxy and our 1999 Annual Report to
Shareholders are expected to be distributed to our shareholders on or about
April 21, 2000.
Solicitation of Proxies
This proxy solicitation will be conducted principally by mail, but may also
be by telephone, the Internet or in person, the cost of which will be paid by
us. Banks, brokers, nominees and other custodians and fiduciaries will be
requested to forward proxy solicitation material to their principals and
customers where appropriate, and we will reimburse such banks, brokers,
nominees, custodians and fiduciaries for their reasonable out-of-pocket
expenses in sending proxy materials to beneficial owners of our stock.
Actions to be Taken Under the Proxy
Properly executed and returned proxies will be voted in accordance with the
directions specified in the proxy. Properly executed proxies received by us
will be voted as follows:
. "FOR" the election of the nominees for director set forth below under
the heading "Election of Directors" (Proposal 1).
. "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP
as our independent accountants for 2000 (Proposal 2).
Any shareholder giving a proxy may revoke it at any time before it is
exercised by giving written notice of revocation or a duly executed proxy
bearing a later date to our Secretary. In order to be effective, such notice
or later dated proxy must be received by us prior to the exercise of the
earlier proxy. A shareholder may also attend the Meeting, revoke his proxy and
vote in person.
Our management knows of no matter to be brought before the Meeting other
than those mentioned herein. If, however, any other matters properly come
before the Meeting, it is intended that the proxies will be voted in
accordance with the judgment of the person or persons voting such proxies.
VOTING SECURITIES AND SHARE OWNERSHIP OF
MANAGEMENT AND PRINCIPAL SHAREHOLDERS
Voting Rights
Both our common stock and our convertible preferred stock are entitled to
vote at the Meeting. The close of business on March 24, 2000, has been fixed
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meeting. At March 24, 2000, there
were 31,848,244 shares of our common stock outstanding and 5,000,000 shares of
our convertible preferred stock outstanding and entitled to be voted at the
Meeting. Each share of common stock and each share of our convertible
preferred stock are entitled to one vote at the Meeting. A majority of the
outstanding shares of our capital stock represented at the Meeting, in person
or by proxy, will constitute a quorum. Our capital stock consists of common
stock and convertible preferred stock.
Security Ownership of Certain Beneficial Owners
The following table set forth certain information regarding ownership of our
common stock and our preferred stock on an as converted basis as of March 24,
2000:
. by each person who beneficially owned more than 5% of our capital
stock;
. by each of our directors and nominees;
. by the Named Executive Officers (as defined herein); and
. by all of our directors and executive officers as a group.
Amount and Nature of Percentage
Name and Address Beneficial Ownership of of Common
of Beneficial Owner Common Stock(1) Stock Owned
- ------------------- ----------------------- -----------
ECD Trust UA 7.30.80 ....................... 7,053,595(2) 22.2%
1910 San Marco Blvd.
Jacksonville, FL 32207
T. Wayne Davis.............................. 10,851,070(3) 33.9%
1910 San Marco Blvd.
Jacksonville, FL 32207
Philip Belyew .............................. 1,062,571(4) 3.3%
2859 Paces Ferry Road
Suite 1740
Atlanta, GA 30039
Carroll L. Fulmer .......................... 1,023,608(5) 3.2%
8340 American Way
Groveland, FL 34736
Wayne N. Nellums............................ 352,157(6) 1.1%
2859 Paces Ferry Road
Suite 1740
Atlanta, GA 30339
N. Mark DiLuzio ............................ 159,932(7) *
2859 Paces Ferry Road
Suite 1740
Atlanta, GA 30339
Derek E. Dewan ............................. 87,500(8) *
6440 Atlantic Boulevard
Jacksonville, FL 32211
Ford G. Pearson ............................ 87,500(9) *
666 Garland Place
Des Plaines, IL 60016
2
Amount and Nature of Percentage
Name and Address Beneficial Ownership of of Common
of Beneficial Owner Common Stock(1) Stock Owned
- ------------------- ----------------------- -----------
Scott J. Tsanos .......................... 68,765(10) *
2859 Paces Ferry Road
Suite 1740
Atlanta, GA 30339
Robert R. Hermann, Jr. ................... 108,000(11) *
Hermann Companies
7701 Forsyth Boulevard
Tenth Floor
St. Louis, MO 63105
GE Capital Corporation ................... 5,000,000(12) 13.6%
120 Long Ridge Road
Stamford, CT 06927
All executive officers and directors as a
group (11 persons)........................ 13,762,496 41.2%
- --------
*Represents less than 1%.
(1) Beneficial ownership has been determined in accordance with the Securities
Exchange Act of 1934 and includes, in certain instances, shares held in
the name of an individual's spouse or minor children, the inclusion of
which is required by applicable rules of the Securities and Exchange
Commission, but as to which shares the executive officer or director may
have disclaimed beneficial ownership. Unless otherwise noted, all shares
are owned of record by the persons named and the beneficial ownership
consists of sole voting power and sole investment power. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock issuable pursuant to
options held by the respective person or group which may be exercised
within 60 days after March 24, 2000 are included ("Presently Exercisable
Options"). Presently Exercisable Options are deemed to be outstanding and
to be beneficially owned by the person or group holding such options for
the purpose of computing the percentage ownership of such person or group
but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person or group.
(2) Includes 6,033,601 shares of common stock owned directly, 926,130 held by
General Parcel Corporation, and 93,864 shares of common stock issuable
upon the exercise of certain warrants. Eunice C. Davis is the lifetime
beneficiary of the ECD Trust and is the mother of T. Wayne Davis, our
Chairman.
(3) Includes 7,053,595 shares owned by the ECD Trust. Includes 1,577,614
shares of common stock owned directly; 1,276,396 shares owned by the TWD
Trust for ECD, of which Mr. Davis is Trustee; 186,602 shares owned by the
TWD Trust for DDL, of which Mr. Davis is Trustee; 171,497 shares owned by
the TWD Trust for TDD, of which Mr. Davis is Trustee; 20,438 shares owned
by the TWD Trust for TWD, Jr., of which Mr. Davis is Trustee; 14,997
shares owned by Redwing Properties, Inc., of which Mr. Davis is
President; 4,912 shares owned by Mr. Davis' wife, Mary O. Davis; an
aggregate of 50,688 shares of common stock held by Mr. Davis' children,
C. Rebecca Davis, Elizabeth Davis and Katherine C. Davis; 336,445 shares
of common stock issuable upon the exercise of certain warrants; and
157,886 shares of common stock issuable upon the exercise of Presently
Exercisable Options granted to Mr. Davis.
(4) Includes 228,571 shares of common stock owned directly and 834,000 shares
of common stock issuable upon the exercise of Presently Exercisable
Options granted to Mr. Belyew.
(5) Consists of shares of common stock owned by Barbara Fulmer, Mr. Fulmer's
wife.
(6) Includes 2,577 shares of common stock owned directly and 349,580 shares
of common stock issuable upon the exercise of Presently Exercisable
Options granted to Mr. Nellums.
3
(7) Includes 9,732 shares of common stock owned directly and 150,200 shares
of common stock issuable upon the exercise of Presently Exercisable
Options granted to Mr. DiLuzio.
(8) Represents shares of common stock issuable upon the exercise of Presently
Exercisable Options granted to Mr. Dewan.
(9) Represents shares of common stock issuable upon the exercise of Presently
Exercisable Options granted to Mr. Pearson.
(10) Includes 5,155 shares of common stock owned directly and 63,610 shares of
common stock issuable upon the exercise of Presently Exercisable Options
granted to Mr. Tsanos.
(11) Includes 70,500 shares of common stock owned directly and 37,500 shares
of common stock issuable upon the exercise of Presently Exercisable
Options granted to Mr. Hermann.
(12) Consists of all of our convertible redeemable preferred stock
outstanding.
ELECTION OF DIRECTORS
(Proposal 1)
Nominees
Our Bylaws provide that our Board will consist of six members and our Board
currently consists of six members, all of which are to be elected at the
Meeting. Each of the nominees is currently a member of our Board. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for our nominees named below. In the event that any of our nominees is unable
or declines to serve as a Director at the time of the Meeting, the proxies
will be voted for any nominee who shall be designated by our present Board to
fill the vacancy. We do not expect that any nominee will be unable or will
decline to serve as a Director. In the event that additional persons are
nominated for election as Directors, the proxy holders intend to vote all
proxies received by them in such a manner as will assure the election of as
many of the nominees listed below as possible, and in such event the specific
nominees to be voted for will be determined by the proxy holders. The term of
office of each person elected as a Director will continue until our next
annual meeting of shareholders or until a successor has been duly elected and
qualified.
The nominees, and certain information about them, are set forth below:
Nominee Current Position with TGI
------- ------------------------------------
T. Wayne Davis......................... Chairman of the Board
Philip A. Belyew....................... Chief Executive Officer and Director
Derek E. Dewan......................... Director
Carroll L. Fulmer...................... Director
Robert R. Hermann, Jr.................. Director
Ford G. Pearson........................ Director
T. Wayne Davis, age 52, has served on our Board of Directors since February
1988 and served as our Chairman since February 1989. He has served as a
director of Winn-Dixie Stores, Inc., a grocery store operator, since October
1982 and served that company as a Vice President from December 1971 to June
1987. Since July 1987, Mr. Davis has been a self-employed investor. He also
serves on the Board of Directors of Enstar Group, Inc. and Modis Professional
Services, Inc.
Philip A. Belyew, age 52, has served as our President, Chief Executive
Officer and as a Director since January 6, 1997. Until November 1996, Mr.
Belyew was Chairman, President and Chief Executive Officer of Atlanta-based
United TransNet Inc., which was formed in December 1995 following the merger
of Courier Dispatch Group and five other ground and air courier companies, and
acquired by Corporate Express in November 1996. From March 1994 to December
1995, Mr. Belyew served as President and Chief Executive Officer of Courier
Dispatch Group and from December 1991 to March 1994, Mr. Belyew served as
Chief Operating Officer of the same company.
4
Group and from December 1991 to March 1994, Mr. Belyew served as Chief
Operating Officer of the same company.
Derek E. Dewan, age 45, has served as a member of our Board of Directors
since January 1997. Mr. Dewan is Chairman, President and Chief Executive
Officer of Modis Professional Services, Inc., a national provider of strategic
staffing, consulting and out-sourcing services to businesses, professional and
service organizations and governmental agencies. Prior to joining Modis in
1994, Mr. Dewan was managing partner for the accounting firm of Coopers &
Lybrand LLP in Jacksonville, Florida. Mr. Dewan also serves on the Boards of
the National Association of Temporary Staffing Services (NATSS) and Payroll
Transfers, Inc.
Carroll L. Fulmer, age 66, has served as a member of our Board of Directors
since September 1997. Mr. Fulmer is Senior Vice President of Transit Group
Transportation LLC, one of our wholly-owned subsidiaries. Mr. Fulmer founded
Carroll Fulmer Group and affiliates during the early 1960s.
Robert R. Hermann, Jr., age 46, has served as a member of our Board of
Directors since September 1998. Mr. Hermann is President of Hermann Companies,
Inc., a packaging system company with domestic and international operations
based in St. Louis, Missouri. Mr. Hermann is also Chairman of the Board of
Directors and Chief Executive Officer of Hermann Marketing, Inc., a marketing
firm based in St. Louis, Missouri and serves on the board of directors of
First National Bank of St. Louis.
Ford G. Pearson, age 58, has served as a member of our Board of Directors
since October 1997. Mr. Pearson has served since 1986 as Executive Vice
President, Chief Operating Officer and Chief Financial Officer of Wheels,
Inc., an Illinois-based fleet leasing and management company. Prior to his
involvement with Wheels, Inc., Mr. Pearson held several positions with
Continental Bank in Chicago, Illinois most recently in charge of Continental
Bank's Commercial Finance Department.
The election of our Directors requires an affirmative vote by a plurality of
the votes cast. Any shares not voted (whether by abstention, broker non-vote
or otherwise) will have no effect.
Our Board of Directors recommends that you vote FOR the election of the
nominees named above.
Board Meetings and Committees
Our Board of Directors held six meetings during 1999. Mr. Davis, Mr. Belyew,
Mr. Fulmer and Mr. Hermann attended all Board meetings in 1999. Mr. Dewan and
Mr. Pearson attended five meetings during 1999. Each member of the Board
attended more than 75% of the aggregate of Board and committee meetings of
committees on which a Director serves.
The Board has standing Executive, Audit, Compensation and Nominating
committees. Certain information about these committees is provided below.
Messrs. Belyew and Davis currently serve on the Executive Committee. The
purpose of the Executive Committee is to exercise certain powers delegated by
the Board of Directors between regular Board Meetings. All actions of the
Executive Committee are subject to review and ratification by the full Board
of Directors.
Messrs. Dewan, Hermann and Pearson currently serve on the Audit Committee of
the Board of Directors. The purpose of the Audit Committee is to review our
financial statements and our internal financial reporting system and controls
with our management and independent accountants, recommend resolutions for any
dispute between our management and our auditors and review other matters
relating to our relationship with our auditors.
Messrs. Davis, Dewan, Hermann and Pearson currently serve on the
Compensation Committee. The purpose of the Compensation Committee is to review
and approve the compensation of our officers and certain highly compensated
employees for each fiscal year. The compensation of our President and Chief
Executive Officer remains subject to approval by the full Board. Mr. Davis is
one of our executive officers.
5
Messrs. Pearson and Dewan currently serve on the Nominating Committee. The
purpose of the Nominating Committee is to review suggestions made by other
Directors for new Board members. Our Bylaws do not provide a process for
shareholders to nominate individuals for election as Directors.
The Compensation Committee and the Audit Committee each held two meetings in
1999, and the Nominating Committee held one meeting during 1999. The Executive
Committee did not meet in 1999.
Director Compensation
The members of our Board of Directors who are our employees receive no
additional compensation for serving on the Board or any committees thereof in
excess of their regular salaries. Members of the Board of Directors who are
not our employees receive a fee of $2,000 for each Board meeting attended.
On April 12, 1999 the Compensation Committee granted the Chairman an option
to purchase 50,000 shares of our common stock at an exercise price equal to
the fair market value at the time of grant. One-third of these options vested
immediately, one-third vested on April 12, 2000 and the remainder will vest on
April 12, 2001.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal 2)
Our Board of Directors, upon recommendation of the Audit Committee, has
selected PricewaterhouseCoopers LLP as our independent accountants for 2000.
PricewaterhouseCoopers LLP has been our independent public accountants since
February 1997.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Meeting and will have an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions. If the
appointment of PricewaterhouseCoopers LLP is not ratified, our Board of
Directors will reconsider its selection of auditors.
Adoption of this proposal requires an affirmative vote of a majority of the
votes cast. Any shares not voted (whether by abstention, broker non-vote or
otherwise) will have no effect.
Our Board of Directors recommends a vote FOR the approval of the appointment
of PricewaterhouseCoopers LLP as our independent accountants for 2000.
6
EXECUTIVE OFFICERS
The following table sets forth the names, ages, positions and certain other
information regarding our executive officers:
Name Age Position
---- --- --------
T. Wayne
Davis...... 52 Chairman
Philip A.
Belyew.... 52 Chief Executive Officer
N. Mark
DiLuzio... 42 Senior Vice President--Finance, Mergers and Acquisitions
Wayne N. 51
Nellums... Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Kim L.
Mattingly.. 43 Vice President--Human Resources
Donna L.
Raines.... 39 Vice President of Corporate Tax
Scott J. 49
Tsanos.... Vice President, Chief Accounting Officer and Assistant Secretary
- --------
Our executive officers serve at the pleasure of our Board of Directors.
N. Mark DiLuzio, 42, has served as our Senior Vice President--Finance
Mergers and Acquisitions since December 1998. From October 1997 to December
1998, Mr. DiLuzio served as our Vice President of Acquisitions. Prior to
joining TGI, Mr. DiLuzio was Senior Vice President and Corporate Development
Director for First Union Bank in Atlanta, Georgia from June 1988 to October
1997. He was employed by Texas Commerce Bancshares in Houston, Texas from June
1981 to June 1988 before joining First Union Bank in Atlanta.
Wayne N. Nellums, 51, has served as our Senior Vice President, Chief
Financial Officer, Secretary and Treasurer since December 1998. From May 1997
to December 1998, Mr. Nellums served as our Vice President, Chief Financial
Officer and Secretary and was our Vice President and Chief Financial Officer
from May 1995 to October 1995. Prior to joining us, Mr. Nellums was a Partner
with KPMG Peat Marwick from July 1979 through February 1987. He was with The
Enstar Group, Inc. and affiliated companies from February 1987 through
December 1992, where he held several positions including Executive Vice
President and Chief Financial Officer from June 1989 through April 1991, and
Executive Vice President, Chief Financial Officer of Enstar Specialty Retail,
Inc. from April 1991 through December 1992.
Kim L. Mattingly, 43, has served as our Vice President of Human Resources
since September 1998. Previously, she served as Director of Human Resources
for Corporate Express Delivery, Inc. from November 1996 to October 1997. Ms.
Mattingly was employed by United TransNet, Inc., formerly known as Courier
Dispatch Group, Inc. from September 1980 through October 1996 as Director of
Human Resources.
Donna L. Raines, 39, has served as our Vice President of Corporate Tax since
October 1999. From June 1996 to October 1999, Ms. Raines served as Tax
Director for Boral Industries, Inc. From June 1990 to May 1996 she served as
Tax Manager for Rank America, Inc.
Scott J. Tsanos, 49, has served as our Vice President and Chief Accounting
Officer since February 1998. From November 1996 to December 1997, Mr. Tsanos
served as Senior Vice President of Finance for the Camberley Hotel Company.
From January 1983 through November 1996, Mr. Tsanos was employed by Sybra,
Inc. as Vice President of Finance.
7
Executive Compensation
The following table shows the summary compensation paid by us to our Chief
Executive Officer and other executive officers whose salary and bonus exceeded
$100,000 in 1999 (the "Named Executive Officers").
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------------- -------------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($)(1) Options Granted (#) Compensation(2)($)
--------------------------- ---- ---------- --------- ------------------- ------------------- ------------------
T. Wayne Davis................ 1999 $157,692 $ -- $ -- 50,000 $ --
Chairman of the Board 1998 $102,981 $ -- $ -- 25,000 $ --
1997 $ 72,746 $ -- $ -- -- $ --
Philip A. Belyew.............. 1999 $216,864 $ -- $ -- 100,000 $53,460
President and Chief Executive 1998 $176,896 $86,300 $ 4,750 100,000 $34,741
Officer 1997 $150,000 $ -- $ -- 700,000 $ --
Wayne N. Nellums.............. 1999 $166,356 $ -- $ -- 50,000 $17,839
Senior Vice President, 1998 $140,660 $32,200 $ -- 24,000 $16,538
Chief Financial Officer, 1997 $104,384 $ -- $12,750 200,000 $38,010
Secretary and Treasurer
N. Mark DiLuzio............... 1999 $166,356 $ -- $ -- 50,000 $12,063
Senior Vice President of 1998 $121,146 $20,000 $ -- 50,000 $13,585
Finance, Mergers and 1997 $ 23,442 $ -- $ -- 100,000 $ --
Acquisitions
Scott J. Tsanos............... 1999 $123,111 $ -- $ -- 40,000 $13,698
Vice President and Chief 1998 $ 90,166 $11,250 $ -- 75,000 $ 9,698
Accounting Officer 1997 $ -- $ -- $ -- -- $ --
- --------
(1) Consists of income tax payments and tax services paid on behalf of the
executive officer.
(2) In accordance with Securities and Exchange Commission rules, reporting is
not required with respect to a named executive officer unless the
aggregate of such compensation exceeds $50,000 or 10% of the total annual
salary and bonuses. The amounts reported for Mr. Belyew in 1999 include an
auto allowance of $11,400, life insurance premiums of $35,160 and club
dues of $6,900. The amounts reported for Mr. Belyew in 1998 include an
auto allowance of $11,400, dues of $6,900 and life insurance premiums of
$21,191. The amounts for Mr. Nellums in 1999 include an auto allowance of
$11,400, life insurance premiums of $4,339 and club dues of $2,100, and
the amounts reported for Mr. Nellums in 1997 include an auto allowance of
$10,450, club dues of $195 and reimbursement of relocation expenses of
$39,873. The amounts for Mr. Tsanos in 1999 include an auto allowance of
$11,400 and life insurance premiums of $2,298.
Stock Options Granted in 1999
The following table provides information with respect to the stock options
granted in 1999 for the Named Executive Officers.
Potential
Realizable value
at assumed
annual rates of
Number of Percent of stock price
Securities Total Options appreciation
Underlying Granted to for option term
Options Employees Exercise Price Expiration -----------------
Name Granted (#)(1) in 1999 Per Share ($) Date 5% ($) 10% ($)
---- -------------- ------------- -------------- ---------- -------- --------
T. Wayne Davis.......... 50,000 5.5% $4.31 04/12/09 $135,527 $204,449
Philip A. Belyew........ 100,000 11.1.% $4.31 04/12/09 $271,054 $408,897
Wayne N. Nellums........ 50,000 5.5% $4.31 04/12/09 $135,527 $204,449
N. Mark DiLuzio......... 50,000 5.5% $4.31 04/12/09 $135,527 $204,449
Scott J. Tsanos......... 40,000 4.4% $4.31 04/12/09 $108,421 $163,559
- --------
8
(1) One-third of the options granted vested immediately, one-third of the
options vested on April 12, 2000 and the remainder will vest on April 12,
2001. All of the options have an exercise price equal to the fair market
value at the time of grant.
Fiscal Year End Option Values
The following table provides information with respect to year-end option
values for the Named Executive Officers. The Named Executive Officers
exercised no options in 1999.
Number of Securities
Underlying Value of Unexercised
Unexercised Options (#) In-the-Money Options ($)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
T. Wayne Davis............. 157,886 24,750 $ 59,982 --
Philip A. Belyew........... 834,000 66,000 $744,100 --
Wayne N. Nellums........... 349,580 24,420 $258,900 --
N. Mark DiLuzio............ 167,000 33,000 -- --
Scott J. Tsanos............ 77,050 37,950 -- --
- --------
(1) The year-end dollar value of unexercised in-the-money options was
calculated by determining the difference between the fair market value of
the securities underlying the options at December 31, 1999 ($3.06) and the
exercise price of the options.
Certain Transactions
On July 13, 1999 we made a loan to C. Tony Fulmer, son of Carroll Fulmer, a
member of our Board of Directors, in the amount of $500,000. The note is a
demand note, bears interest at the rate of 8.0% and is secured by 81,632
shares of our common stock.
In connection with their acquisition in 1997, Carroll Fulmer & Co. had a
receivable from three limited partnerships owned by Carroll Fulmer, a member
of our Board of Directors, and his immediate family. The receivable aggregated
$838,000 at acquisition and remained constant through December 1998. During
1999, as a result of the disposal of certain revenue equipment, the receivable
increased to $2,192,000 at December 31, 1999. In February 2000 the limited
partnerships remitted $374,000 to us, thereby reducing the amounts outstanding
to $1,818,000. These receivables are non-interest bearing and are due in 2002
at the expiration of certain equipment leases.
Philip A. Belyew, our President and Chief Executive Officer, is indebted to
us. As of December 31, 1998, December 31, 1999 and April 14, 2000 his loan
balances were $65,000, $315,000 and $422,000. This indebtedness currently
bears interest at a rate of 8.0% and is due on demand.
We lease certain facilities and equipment from several of the former owners
of businesses we have acquired, including from Carroll Fulmer, a member of our
Board of Directors. During 1998 and 1999, rental payments under operating
leases to related third parties aggregated $194,000 and $1,400,000. Payments
to related third parties under capitalized leases totaled $1,600,000 in each
of 1998 and 1999. The terms of the leases with related parties are, in the
opinion of management, no less favorable to us than could be obtained from
unrelated third parties.
9
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on our common stock to the cumulative total
return of the Russell 2000 and the Nasdaq Trucking and Transportation indices
for the period commencing on December 31, 1994 and ending December 31, 1999
(the "Measuring Period"). The graph assumes that the value of the investment in
our common stock and each index was $100 on December 31, 1994. The yearly
change in cumulative total return is measured by dividing (1) the sum of (i)
the cumulative amount of dividends for each fiscal year, assuming dividend
reinvestment, and (ii) the change in share price between the beginning and end
of the Measuring Period, by (2) the share price at the beginning of the
Measuring Period.
[LINE GRAPH]
TRANSIT GROUP, INC.
TOTAL RETURN TO SHAREHOLDERS
12/94 12/95 12/96 12/97 12/98 12/99
----- ----- ----- ----- ----- -----
Transit Group Inc. $100 $ 73 $ 55 $128 $105 $ 61
Russell 2000 $100 $128 $155 $204 $191 $188
Nasdaq Trucking $100 $117 $129 $165 $148 $158
and Transportation
10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1999, the Compensation Committee of our Board of Directors was
comprised of three non-employee members and one employee member of our Board.
The Compensation Committee is responsible for:
. setting our compensation philosophy and policies;
. establishing the compensation of our Chief Executive Officer, Philip
Belyew, and other executive officers; and
. administering and awarding options and other awards under our stock
incentive plans.
Our compensation policies have been designed to align the financial
interests of our management with those of our shareholders, and to take into
account our operating environment and expectations for continued growth and
enhanced profitability. Compensation for each of our executive officers
consists of a base salary, an annual bonus based on an executive incentive
plan that outlines revenue, profit and other financial goals for each quarter,
and stock options.
Our Compensation Committee's current philosophy is that a portion of an
executive's compensation should be based directly upon the value of long-term
incentive compensation in the form of cash bonuses and stock option awards.
The Compensation Committee believes that providing executives with the
opportunity to acquire significant interests in our growth and prosperity
through grants of stock options, while maintaining our base salaries at
competitive levels, will enable us to attract and retain executives with the
outstanding management abilities and entrepreneurial spirit which are
essential to our success. Furthermore, the Compensation Committee believes
that this approach to compensation motivates executives to perform to their
fullest potential.
At least annually, the Compensation Committee reviews salary recommendations
for our executives and then approves such recommendations, with any
modifications it considers appropriate. The annual salary recommendations for
such persons are made under the ultimate direction of our Chief Executive
Officer, based on total compensation packages for comparable companies in our
industry, as well as evaluations of the individual executive's past and
expected future performance. Similarly, the Compensation Committee fixes the
base salary of our Chief Executive Officer based on its review of competitive
compensation data from companies in our industry, our Chief Executive
Officer's overall compensation package, and the Compensation Committee's
assessment of his past performance and its expectation as to his future
performance in leading us.
Stock-based awards, principally in the form of stock options, represent a
portion of compensation for our executive officers, including our Chief
Executive Officer, and serve as our principal long-term incentive compensation
component. Stock options typically are granted at the fair market value on the
date of grant, and will only have value if our stock price increases. Grants
of stock options generally are based upon the level of the executive's
position and an evaluation of the executive's past and expected future
performance. The Compensation Committee believes that dependence on stock
options for a portion of an executive's compensation aligns such executive's
interests with those of our shareholders, because the ultimate value of such
compensation is linked directly to stock price.
The Compensation Committee reviews annually the base salary we pay to Mr.
Belyew and may adjust it based on competitive compensation information
available to the Compensation Committee, his overall compensation package and
the Compensation Committee's assessment of his past experience and its
expectation as to his future contributions in leading us and our businesses.
In May 1999, the Compensation Committee reviewed the compensation of our Chief
Executive Officer and increased his annual base salary from $200,000 to
$225,000. The increase in Mr. Belyew's base salary was based on past
performance. On April 12, 1999, Mr. Belyew was granted a stock option to
purchase 100,000 shares of our common stock at a price of $4.31 per share, the
fair market value of our common stock on the date of grant.
The Compensation Committee evaluates our compensation policies and
procedures with respect to executives on an on-going basis. Although the
Compensation Committee believes that current compensation
11
policies have been successful in aligning the financial interests of executive
officers with those of our shareholders and with our performance, it continues
to examine what modifications, if any, should be implemented to further link
executive compensation with both individual and our performance.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
limits amounts that can be deducted for compensation paid to certain
executives to $1,000,000 unless certain requirements are met. No executive
officer currently receives compensation in excess of $1,000,000 and therefore
there are no compensation amounts that are nondeductible on this basis at
present. The Compensation Committee will continue to monitor the applicability
of Section 162(m) to our compensation program.
COMPENSATION COMMITTEE
T. Wayne Davis
Derek E. Dewan
Robert R. Hermann, Jr.
Ford G. Pearson
Notwithstanding anything to the contrary set forth in any of our previous
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the foregoing
Compensation Committee Report on Executive Compensation and the Shareholder
Return Performance Graph shall not be incorporated by reference into any such
filings.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors,
officers and persons who own more than 10% of our outstanding common stock to
file with the Securities and Exchange Commission reports of ownership and
changes in ownership of our common stock held by such persons. Officers,
directors and greater than 10% shareholders are also required to furnish us
with copies of all forms they file under this section. To our knowledge, based
solely on a review of the copies of such reports furnished to us and
representations that no other reports were required, during 1999, all Section
16(a) filing requirements applicable to our officers, directors and greater
than 10% shareholders were timely met, except that Mr. Hermann inadvertently
missed the filing deadline for two Form 4 reports relating to two acquisitions
of additional shares of TGI.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the proxy statement and proxy to
be used in connection with our 2001 Annual Meeting of Shareholders,
shareholder proposals must be received no later than December 19, 2000.
Proposals to be submitted, other than for inclusion in proxy materials, must
be received by us on or before March 5, 2001. A proxy may confer discretionary
authority with respect to matters which are not timely and properly presented
in accordance with applicable procedures.
OTHER MATTERS
We are not aware of any other matter to be presented for action at the
Annual Meeting other that those mentioned in the Notice of Annual Meeting of
Shareholders and referred to in this Proxy Statement. If any other matter
comes before the Meeting, it is the intention of the persons named in the
enclosed proxy to vote on such matters in accordance with their judgment.
12
ANNUAL REPORT
A copy of our 1999 Annual Report is being mailed with this Proxy Statement
to each shareholder of record. Shareholders not receiving a copy of such
Annual Report may obtain one by writing or calling our Investor Relations
Department at (770) 444-0240.
By Order of the Board of Directors
/s/ Philip A. Belyew
--------------------
Philip A. Belyew
President and Chief Executive
Officer
April 21, 2000
Atlanta, Georgia
13
PROXY-TRANSIT GROUP, INC.
Annual Meeting of Shareholders to be held on May 18, 2000
This proxy is solicited on behalf of the Board of Directors of the
Company. The undersigned hereby constitutes and appoints Philip Belyew
and T. Wayne Davis, and each of them, the true and lawful attorneys and
proxies for the undersigned, with full power of substitution and
appointment, for and in the name, place and stead of the undersigned,
to act for and vote all of the undersigned's capital stock of Transit
Group, Inc., a Florida corporation, at the Annual Meeting of
Shareholders to be held at the Marriott Northwest, Atlanta, Georgia, at
9:30 a.m., on May 18, 2000, and at any and all adjournments thereof
(the "Meeting"), for the purposes of considering and acting upon the
matters proposed by Transit Group, Inc. which are identified below.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR LISTED BELOW AND ALL THE OTHER PROPOSALS AND IN
THE DISCRETION OF THE PROXY HOLDER NAMED HEREIN WITH RESPECT TO SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
(Continued and to be signed on the reverse side.)
SEE REVERSE SIDE
Please date, sign and mail your
Proxy Card back as soon as possible!
Annual Meeting of Stockholders
Transit Group, Inc.
May 18, 2000
Please Detach and Mail in the Envelope Provided
[X] Please mark your votes as in this example.
1. ELECTION OF DIRECTORS
FOR all nominees listed to the right (except as marked to the contrary) [_]
WITHHOLD AUTHORITY to vote for all nominees [_]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name below)
T. Wayne Davis
Philip A. Belyew
Ford G. Pearson
Derek E. Dewan
Carroll L. Fulmer
Robert R. Hermann, Jr.
2. RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP AS
INDEPENDENT ACCOUNTANTS OF TRANSIT GROUP, INC. FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2000.
FOR AGAINST ABSTAIN
[_] [_] [_]
This Proxy, when properly executed, duly returned and not revoked will be voted
in accordance with the directions given by the undersigned shareholder. If no
direction is made, it will be voted in favor of the election of nominees for
director listed above and the other proposals listed on this proxy and in the
discretion of the proxy holder named herein with respect to such other matters
as may properly come before the Meeting.
SIGNATURE(S) DATE SIGNATURE(S) DATE
------------------------- ---------------- -------------------------- ---------------
NOTE: Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If
the signatory is a corporation, sign the full corporate name by a duly
authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.