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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Rule 14a-11(c) or Rule 14a-12
ALLIED HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
[X]
- --------------------------------------------------------------------------------
(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)(1) 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:
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ALLIED HOLDINGS, INC.
160 CLAIREMONT AVENUE, SUITE 200
DECATUR, GEORGIA 30030
[LOGO INSERTED HERE]
NOTICE OF ANNUAL MEETING
MAY 17, 2000
TO THE SHAREHOLDERS OF ALLIED HOLDINGS, INC.:
The annual meeting of shareholders of Allied Holdings, Inc. (the
"Company") will be held at the Conference Center, Decatur Holiday Inn, 130
Clairemont Avenue, Decatur, Georgia 30030 on May 17, 2000 at 10:00 a.m., local
time, for the following purposes:
1. To elect three directors for terms ending in 2003;
2. To amend the Company's Long-Term Incentive Plan (the "LTI
Plan") to increase the number of shares subject to the LTI
Plan by 850,000 shares;
3. To ratify the appointment of Arthur Andersen LLP as
independent public accountants of the Company to serve for the
2000 fiscal year; and
4. To take action on whatever other business may properly come
before the meeting.
Only holders of record of common stock at the close of business on
March 20, 2000 will be entitled to vote at the meeting. The stock transfer books
will not be closed.
By Order of the Board of Directors,
A. Mitchell Poole, Jr.
Vice-Chairman and Chief Executive Officer
Decatur, Georgia
March 29, 2000
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
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ALLIED HOLDINGS, INC.
160 CLAIREMONT AVENUE, SUITE 200
DECATUR, GEORGIA 30030
ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 2000
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Allied Holdings,
Inc. (the "Company") in connection with the solicitation by the Board of
Directors of proxies to be used at the annual meeting of shareholders of the
Company to be held on May 17, 2000 at 10:00 a.m., local time, at the Conference
Center, Decatur Holiday Inn, 130 Clairemont Avenue, Decatur, Georgia 30030, and
any adjournments thereof. The enclosed proxy is revocable at any time before its
exercise. Revocation may be made (i) by written notice to the Secretary of the
Company, (ii) by attending the meeting and voting in person, or (iii) by filing
a subsequent proxy with the Secretary of the Company prior to or at the time of
the meeting.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation of shareholders of record by mail, telephone, or
personal contact, arrangements will be made with brokerage houses to furnish
proxy materials to their principals, and the Company will reimburse them for
their mailing expenses. Custodians and fiduciaries will be supplied with proxy
materials to forward to beneficial owners of the no par value common stock of
the Company (the "Common Stock"). No remuneration will be paid directly or
indirectly for the solicitation of proxies.
An annual report to the shareholders, including financial statements
for the year ended December 31, 1999 is enclosed with this Proxy Statement.
VOTING AND OUTSTANDING STOCK
At the close of business on the record date, March 20, 2000, the
Company had outstanding and entitled to vote at the annual meeting 8,001,487
shares of Common Stock. Each share of Common Stock is entitled to one vote. For
each proposal to be considered at the annual meeting, the holders of a majority
of the outstanding shares of stock entitled to vote on such matter at the
meeting, present in person or by proxy, shall constitute a quorum. Abstentions
and broker non-votes will be treated as present for purposes of determining a
quorum. "Broker non-votes" will not be entitled to vote at the meeting. "Broker
non-votes" are votes that brokers holding shares of record for their customers
(i.e., in "street name") are not permitted to cast under applicable stock
exchange regulations because the brokers have not received instructions (or have
received incomplete instructions) from their customers as to certain proposals
and as to which the brokers have advised the Company that they lack voting
authority.
With regard to the election of directors, votes may be cast for the
nominees or may be withheld. The election of directors requires the affirmative
vote of a majority of the outstanding shares of Common Stock of the Company.
Votes that are withheld and broker non-votes will have the effect of votes
against the nominees for the Board of Directors of the Company.
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With regard to the other proposals to be considered at the annual
meeting, votes may be cast for or against each of the proposals, or shareholders
may abstain from voting on each of the proposals. The approval of each of the
proposals requires the affirmative vote of a majority of the shares represented
at the meeting in person or by proxy and entitled to vote on such proposals.
Abstentions will have the effect of votes against the other proposals.
1. ELECTION OF DIRECTORS AND INFORMATION REGARDING DIRECTORS
The By-Laws of the Company provide for the division of the Board into
three classes, each class serving for a period of three years. Members of the
three classes currently are as follows: (i) Bernard O. De Wulf, Guy W. Rutland,
III, and Robert R. Woodson; (ii) Joseph W. Collier, Guy W. Rutland, IV, Berner
F. Wilson, Jr., and Randall E. West; and (iii) David G. Bannister, A. Mitchell
Poole, Jr., Robert J. Rutland, and William P. Benton.
The directors whose terms will expire at the 2000 annual meeting of
shareholders are David G. Bannister, A. Mitchell Poole, Jr., Robert J. Rutland
and William P. Benton. Each of these directors has been nominated to stand for
reelection as director to hold office until the 2003 annual meeting of
shareholders or until his successor is elected and qualified.
Should any one or more of these nominees become unable to serve for any
reason, or for good cause will not serve, which is not anticipated, the Board of
Directors may, unless the Board by resolution provides for a lesser number of
directors, designate substitute nominees, in which event the persons named in
the enclosed proxy will vote proxies that would otherwise be voted for all named
nominees for the election of such substitute nominee or nominees.
If a shareholder specifies a choice on the proxy, the shares of Common
Stock represented by the proxy will be voted as specified on such proxy. If no
specification is made and the power to vote the shares is not withheld, the
shares represented by the proxy will be voted "FOR" each nominee for director
named on the proxy.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" APPROVAL OF THE PROPOSAL TO ELECT THE FOUR NOMINEES FOR DIRECTORS
LISTED BELOW.
NOMINEES FOR ELECTION TO TERMS EXPIRING 2003 ANNUAL MEETING
DAVID G. BANNISTER
Director Since 1993
Age 44
Mr. Bannister has been a Managing Director of Grotech Capital Group since June
1998. Grotech invests in companies primarily located in the Mid-Atlantic and
Southeastern regions of the United States and which are in early, emerging and
later stage growth cycles. Mr. Bannister was a Managing Director in the
Transportation Group of BT Alex Brown Incorporated and was employed by that firm
in various capacities from 1983 to June 1998. Mr. Bannister is also a director
of Landstar System, Inc.
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WILLIAM P. BENTON
Director Since 1998
Age 76
Mr. Benton has been an Executive Director with Ogilvy & Mather, an advertising
agency, since January 1997. Mr. Benton was the Vice Chairman of Wells Rich
Greene/BDDP, an advertising agency, from September 1986 to January 1997. Mr.
Benton held numerous key executive positions with Ford Motor Company for more
than 37 years, including vice president and general manager of the Ford Division
and vice president and general manager of the Lincoln-Mercury Division. He was
also responsible for the operating companies that comprised the 15 Western
European countries during his Ford of Europe assignment. Mr. Benton's last
position with Ford was Vice President of Marketing Worldwide. Mr. Benton is also
a Director of Speedway Motor Sports, Inc. and Sonic Automotive, Inc.
A. MITCHELL POOLE, JR.
Director Since 1990
Age 52
Mr. Poole has been Vice-Chairman and Chief Executive Officer of the Company
since January 2000. Mr. Poole was the President, Chief Operating Officer, and
Assistant Secretary of the Company from December 1995 to December 31, 1999. Mr.
Poole served as Chief Financial Officer until November 1998. Prior to December
1995, Mr. Poole served as Executive Vice President and Chief Financial Officer
of the Company. Mr. Poole joined Allied Systems, Ltd. in 1988 as Senior Vice
President and Chief Financial Officer. He was appointed President of Allied
Industries Incorporated in December 1990 and served in that capacity until
December 1997. Prior to joining the Company in 1988, Mr. Poole was an audit
partner with Arthur Andersen LLP, independent public accountants.
ROBERT J. RUTLAND
Director Since 1965
Age 58
Mr. Rutland has been Chairman of the Company since December 1995. Mr. Rutland
served as Chairman and Chief Executive Officer from December 1995 to December
1999 and President and Chief Executive Officer of the Company from 1986 to
December 1995. Prior to October 1993, Mr. Rutland was Chief Executive Officer of
each of the Company's subsidiaries. Mr. Rutland is a member of the Board of
Directors of Fidelity National Bank, a national banking association.
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INCUMBENT DIRECTORS - TERMS EXPIRING 2002 ANNUAL MEETING
BERNARD O. De WULF
Director Since 1993
Age 51
Mr. De Wulf has been Vice Chairman and an Executive Vice President of the
Company since October 1993. Prior to such time, Mr. De Wulf was Vice Chairman of
each of the Company's subsidiaries. Mr. De Wulf was Vice Chairman of Auto Convoy
Co. from 1983 until 1988 when the Company and Auto Convoy Co. became affiliated.
GUY W. RUTLAND, III
Director Since 1964
Age 63
Mr. Rutland was elected Chairman Emeritus in December 1995. Mr. Rutland served
as Chairman of the Board of the Company from 1986 to December 1995. Prior to
October 1993, Mr. Rutland was Chairman or Vice Chairman of each of the Company's
subsidiaries.
ROBERT R. WOODSON
Director Since 1993
Age 68
Mr. Woodson retired as a member of the Board of Directors of John H. Harland
Company in April 1999 and served as its Chairman from October 1995 to April
1997. Mr. Woodson was also the President and Chief Executive Officer of John H.
Harland Company prior to October 1995. Mr. Woodson also serves as a director of
Haverty Furniture Companies, Inc.
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INCUMBENT DIRECTORS - TERMS EXPIRING 2001 ANNUAL MEETING
JOSEPH W. COLLIER
Director Since 1995
Age 57
Mr. Collier has been the Executive Vice President, Planning and Development of
the Company since January 2000. Mr. Collier was President of Allied Automotive
Group, Inc. from December 1995 to December 1999. Mr. Collier was Executive Vice
President of Marketing and Sales and Senior Vice President of Allied Systems,
Ltd. from 1991 to December 1995. Prior to joining the Company in 1979, Mr.
Collier served in management positions with Bowman Transportation and also with
the Federal Bureau of Investigation.
GUY W. RUTLAND, IV
Director Since 1993
Age 36
Mr. Rutland has been Senior Vice President - Operations of Allied Automotive
Group, Inc. since November 1997. Mr. Rutland was Vice President - Reengineering
Core Team of Allied Automotive Group, Inc., from November 1996 to November 1997.
From January 1996 to November 1996 Mr. Rutland was Assistant Vice President of
the Central and Southeast Region of Operations for Allied Systems, Ltd. From
March 1995 to January 1996 Mr. Rutland was Assistant Vice President of the
Central Division of Operations for Allied Systems, Ltd. From June 1994 to March
1995, Mr. Rutland was Assistant Vice President of the Eastern Division of
Operations for Allied Systems, Ltd. From 1993 to June 1994 Mr. Rutland was
assigned to special projects with an assignment in Industrial Relations/Labor
Department and from 1988 to 1993, Mr. Rutland was Director of Performance
Management.
RANDALL E. WEST
Director Since 1997
Age 51
Mr. West has been the President and Chief Operating Officer of the Company since
January 2000. Mr. West was the President of Axis Group, Inc. from October 1997
to December 1999. Mr. West was President of Ryder Automotive Carrier Services,
Inc. from January 1996 to October 1997 and Senior Vice President and General
Manager of Ryder International from 1993 to 1995.
BERNER F. WILSON, JR.
Director Since 1993
Age 61
Mr. Wilson retired as Vice President and Vice-Chairman of the Company in June
1999. Mr. Wilson was Secretary of the Company from December 1995 to June 1998.
Prior to October 1993, Mr.
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Wilson was an officer or Vice Chairman of several of the Company's subsidiaries.
Mr. Wilson joined the Company in 1974 and held various finance, administration,
and operations positions.
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
All directors have served continuously since their first election.
Robert J. Rutland and Guy W. Rutland, III are brothers. Guy W. Rutland, IV is
the son of Guy W. Rutland, III. The Board of Directors held nine meetings during
1999. Each director attended at least 75% of the meetings of the Board of
Directors and the meetings of committees of which he was a member. The Board of
Directors has two standing committees. Certain information regarding the
function of the Board's committees, their present membership, and the number of
meetings held by each committee during 1999 is presented below.
AUDIT COMMITTEE
The Audit Committee annually reviews and recommends to the Board of
Directors the certified public accounting firm to be engaged as independent
auditors of the Company for the next calendar year, reviews the plans and
results of the audit engagement with the independent auditors, inquires as to
the adequacy of the Company's internal accounting controls, and considers each
professional service provided by the independent auditors and whether the
providing of such service impairs the independence of the auditors. The members
of the Audit Committee are David G. Bannister, Robert R. Woodson, and William P.
Benton. During 1999, the Audit Committee held two meetings.
COMPENSATION COMMITTEE
The Compensation Committee periodically reviews the compensation and
other benefits provided to officers of the Company. Pursuant to authority
delegated to it by the Board of Directors, the Compensation Committee may
establish compensation for the officers of the Company and approve employment
agreements with the officers of the Company. The Compensation Committee may also
recommend to the Board of Directors changes to the Company's total compensation
philosophy. The members of the Compensation Committee are David G. Bannister,
Robert R. Woodson and William P. Benton. During 1999, the Compensation Committee
held four meetings.
COMPENSATION OF DIRECTORS
For the year ended December 31, 1999, each director of the Company who
was not also an employee received an annual fee of $20,000 and a fee of $3,000
for each meeting of the Board attended, plus reimbursement of expenses incurred
in attending meetings. An additional fee of $3,000 is paid for attending two or
more committee meetings held the same day as Board meetings.
On November 29, 1999, the Company granted to each director of the
Company who was not also an employee an option to acquire 5,000 shares of the
Common Stock pursuant to the Company's Long-Term Incentive Plan (the "LTI
Plan"). The options vest over a three year period, 33.3% per year, commencing
one year from the date of grant. The exercise price of the options is $7.0625
per share, which was the fair market value on the date of grant.
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COMMON STOCK OWNERSHIP BY MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information about beneficial
ownership of the Common Stock as of March 20, 2000 by (i) each director and
executive officer of the Company named herein, and (ii) all directors and
executive officers of the Company as a group. Unless otherwise indicated, the
beneficial owners of the Common Stock listed below have sole voting and
investment power with respect to all shares shown as beneficially owned by them.
Number of Shares Percentage of Shares
Beneficial Owner Beneficially Owned Outstanding
- ---------------- ------------------ -----------
Robert J. Rutland(1) 1,152,476 14.4
Guy W. Rutland, III(2) 846,615 10.6
Bernard O. De Wulf(3) 528,465 6.6
Guy W. Rutland, IV(4) 648,692 8.1
A. Mitchell Poole, Jr.(5) 200,784 2.5
Berner F. Wilson, Jr.(6) 119,516 1.5
Joseph W. Collier(7) 64,339 *
Randall E. West(8) 16,015 *
David G. Bannister(9) 7,666 *
Robert R. Woodson(9) 7,666 *
William P. Benton(9) 5,666 *
All executive officers and directors as
a group(10) (16 persons) 3,702,093 46.3
- ------------------------
*Less than 1% not applicable
(1) Includes 18,099 shares owned by his wife as to which he disclaims
beneficial ownership and 63,632 shares owned by him under the
Restricted Stock Plan.
(2) Includes 18,099 shares owned by his wife, 67,800 shares owned by a
private foundation as to which he disclaims beneficial ownership and
4,064 shares owned by him under the Restricted Stock Plan.
(3) Includes 150,550 shares held in trust for the benefit of his wife and
family members and 7,915 shares owned by him under the Restricted Stock
Plan.
(4) Includes 647,211 shares held in a limited partnership of which he is
directly the beneficiary and 1,481 shares owned by him under the
Restricted Stock Plan.
(5) Includes 41,634 shares owned by him under the Restricted Stock Plan.
(6) Includes 1,996 shares owned by him under the Restricted Stock Plan.
(7) Includes 21,589 shares owned by him under the Restricted Stock Plan and
options to acquire 40,750 shares.
(8) Includes 9,349 shares owned by him under the Restricted Stock Plan and
options to acquire 6,666 shares.
(9) Includes options to acquire 1,666 shares for each individual.
(10) Includes 185,990 shares issued under the Restricted Stock Plan and
options to acquire 65,714 shares.
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The following table sets forth certain information about beneficial
ownership of each person known to the Company to own more than 5% of the
outstanding Common Stock as of March 20, 2000, other than directors of the
Company.
Name and Address of Number of Shares Percentage of Shares
Beneficial Owner Beneficially Owned Outstanding
- ---------------- ------------------ -----------
Beck, Mack and Oliver LLC(1) 1,110,739 13.9
330 Madison Avenue
New York, New York
Dimensional Fund Advisors, Inc. (2) 506,335 6.3
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) According to a Schedule 13G dated January 28, 2000, filed on behalf of
Beck, Mack and Oliver.
(2) According to a Schedule 13G dated February 11, 2000, filed on behalf of
Dimensional Fund Advisors, Inc.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board, which was formed in
December 1993, reviews, establishes, administers and monitors the Company's
executive compensation plans, policies and programs.
EXECUTIVE COMPENSATION COMPONENTS
The executive compensation philosophy of the Company is to link
compensation with enhancement of shareholder value and retain executive talent
the Company considers important for its long-term success. The Company's
executive compensation is based on the following three principal components,
each of which is intended to support the overall compensation philosophy.
Incentive Compensation. Beginning in 1997, incentive compensation
for the named executive officers was paid in accordance with the formalized
approach to measuring value creation through the economic value added, or EVA,
framework under the Company's EVA Based Incentive Plan (the "Incentive Plan").
The Company, together with Stern Stewart & Co., the financial advisory firm that
pioneered the EVA framework, undertook a five-month project during 1996 to
create and install an EVA based performance measurement and incentive
compensation system. The proprietary EVA financial measure is defined as net
operating profits after tax ("NOPAT"), less a capital charge for the average
operating capital employed. NOPAT is a measure of operating results which
differs from normal accounting profit due to the adjustment for certain
non-economic charges. The Company believes that EVA more accurately measures
shareholder value created than traditional performance measures such as return
on assets, earnings per share and return on equity.
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The Incentive Plan's objectives are to focus on (i) creating
shareholder value and rewarding participants significantly when
achieved, and (ii) sustaining continuous performance improvement. EVA
provides a framework that enables management to make decisions designed
to build long-term value for the Company and its shareholders rather
than focus on short-term results. Under the Incentive Plan, incentive
compensation is directly linked to changes in EVA. EVA is measured for
each of the Company's major operating units and rewards participants
for increases in EVA and penalizes such employees for any decreases in
EVA.
Management employees designated as participants by the
Chairman and Vice Chairman/Chief Executive Officer of the Company and
approved by the Compensation Committee are eligible to participate in
the Incentive Plan. Target bonus amounts are determined for each
participant by the Chairman and Vice Chairman/Chief Executive Officer
and approved by the Compensation Committee. A participant's target
bonus is either based solely on the performance of the Company on a
consolidated basis or on the performance of a subsidiary or a business
unit and the Company. For example, a target bonus might be based 75% on
a business unit or a subsidiary and 25% on the Company's consolidated
results.
Annually, an actual bonus is declared for each participant
based on the comparison of the change in EVA to the expected change in
EVA. If the change in EVA is exactly equal to the expected change in
EVA, the actual bonus will equal the target bonus. The actual bonus for
any calendar year will be higher than the target bonus if the change in
EVA is higher than the expected change in EVA and lower if the change
in EVA is lower than the expected change in EVA. Such adjustment shall
be established by the Compensation Committee in its sole discretion.
The actual bonus declared for each participant with respect to
any calendar year will be allocated to the participants' bonus bank,
within 30 days after the amount of the actual bonus for such year is
determined. If, after the allocation with respect to any calendar year,
the balance in the participant's bonus bank is less than or equal to
the participant's target bonus for such year, the entire amount in the
bonus bank will be paid as soon as practicable but in no event later
than 15 days following such allocation. If the balance in the bonus
bank is greater than the target bonus, the participant will be paid the
target bonus plus one-third of the remainder of the bonus bank balance.
Amounts remaining in the bonus bank are carried forward to future
years. Negative bonuses may be declared if the change in EVA for any
calendar year is significantly below the expected change in EVA for
such year and negative bonuses declared will be subtracted from the
bonus bank.
The Company used EVA as the measure to determine incentive compensation
for senior management in 1999. No Incentive Plan bonus was paid to any of the
executive officers in 1999 other than Randall E. West, for whom 75% of target
bonus was based upon the performance of the Axis Group, Inc., a subsidiary of
the Company whose performance exceeded target expectations in 1999.
Base Salary. Base salary amounts for each of the named executive
officers are specified in their employment agreements. The Committee believes
these base salary amounts are competitive with those paid to executives of other
leading companies engaged in the transportation and trucking industry.
Stock Compensation. Executive officers are eligible to receive annual
grants of incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, performance
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units and performance shares under the LTI Plan. During 1999, the Compensation
Committee awarded shares of restricted stock and stock options to various
officers, including the named executive officers, pursuant to the LTI Plan.
Annually, the Compensation Committee establishes a dollar value of the
restricted stock to be awarded to certain of the Company's officers. This dollar
value is divided by the Company's stock price on the date the restricted stock
award is actually granted by the Compensation Committee to determine the number
of shares of restricted stock such officers receive. The Compensation Committee
believes that restricted stock awards and stock options assist the Company in
the long-term retention of its executives and serve to align the interests of
the executives with the shareholders by increasing their ownership stake in the
Company.
CEO COMPENSATION
The Compensation Committee believes that Robert J. Rutland's
compensation as Chief Executive Officer for the year ended December 31, 1999
appropriately related to short and long term performance. Mr. Rutland's base
salary in 1999 was $500,000 as provided by his employment agreement. Mr. Rutland
was not paid a bonus for the year ended December 31, 1999. The Compensation
Committee believes that the base salary and benefits provided by Mr. Rutland's
employment agreement and the restricted stock award under the LTI Plan provide
for appropriate compensation to Mr. Rutland based upon the measures described
above for determining executive officer compensation. The Compensation Committee
considers the compensation received by Mr. Rutland to be comparable to chief
executive officers of other leading companies engaged in the transportation and
trucking industry.
David G. Bannister William P. Benton Robert R. Woodson
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EXECUTIVE COMPENSATION TABLE
Remuneration paid in 1999, 1998, and 1997 to executive officers and the
principal positions of such individuals at December 31, 1999 is set forth on the
following table:
Long-Term Compensation
----------------------
Securities
Restricted Underlying
Other Annual Stock Options/SAR All Other
Name and Principal Position Year Salary(1) Bonus Compensation(2) Awards(3) Awards(4) Compensation(5)
--------------------------- ---- --------- ----- --------------- --------- --------- ---------------
Robert J. Rutland 1999 $521,000 -- $38,217 $323,495 -- $127,077
Chairman and Chief 1998 500,000 149,625 29,038 231,840 3,938 197,466
Executive Officer 1997 440,049 304,444 38,717 -- -- 271,678
Bernard O. De Wulf 1999 356,681 -- 6,521 66,441 -- 132,975
Vice Chairman and 1998 341,270 54,732 -- 47,337 1,438 133,881
Executive Vice President 1997 330,037 121,778 -- -- -- 136,101
A. Mitchell Poole, Jr. 1999 416,800 -- 28,221 181,154 -- 54,700
President and Chief 1998 400,000 119,700 23,230 129,835 3,150 55,592
Operating Officer 1997 298,700 200,633 30,973 -- -- 42,416
Randall E. West (6) 1999 252,164 196,169 7,730 78,286 80,163 18,486
President - Axis 1998 242,000 67,247 -- 56,106 1,769 19,201
Group, Inc. 1997 242,000 194,811 50,103 -- -- --
Joseph W. Collier 1999 312,600 -- 14,745 97,046 -- 18,486
President Allied 1998 300,000 97,352 11,615 69,546 2,562 19,201
Automotive Group, Inc. 1997 200,000 119,276 15,487 -- -- --
-----------------
(1) Includes amounts contributed by such executive officers to the
Company's 401(k) plan.
(2) Represents amounts paid to the named executives for
reimbursement of income tax liabilities incurred due to the
issuance of restricted stock awards. Amounts paid to Mr. West
in 1997 represent reimbursement for moving expenses. Also
includes $1,000 matching contribution made by the Company to
each individual in connection with the 401(k) plan.
(3) For 1999, represents dollar value of awards granted based on
the closing market price of $14.375 on January 4, 1999, the
date of grant. Under the Restricted Stock Plan, restrictions
lapse over a five year period, 20% per year, commencing on the
first anniversary of the date of grant. The aggregate
restricted stock holdings at the end of 1999 for Mr. Rutland
were 63,632 shares (value at December 31, 1999 equaled
$389,746); for Mr. De Wulf, 7,915 shares (value at December
31, 1999 equaled $48,479); for Mr. Poole, 41,634 shares (value
at December 31, 1999 equaled $255,008); for Mr. Collier,
21,589 shares (value at December 31, 1999 equaled $132,233);
and for Mr. West, 9,349 shares (value at December 31, 1999
equaled $57,263). Holders of restricted stock will be entitled
to receive any dividends that may be paid by the Company on
such restricted stock
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(4) For Mr. West, 1999 number includes 75,000 shares subject to
options and 5,163 shares issued pursuant to stock appreciation
rights.
(5) Amounts in this column represent the imputed cost to the
Company of the premiums paid on "split dollar" insurance
agreements with the named executive officers based on an
interest-free loan basis. Upon termination of each split
dollar agreement for any reason, the Company will receive back
the aggregate of the premiums paid by it. The amounts reported
are required by the Securities and Exchange Commission's
rules; however, the amounts exceed the taxable compensation
recognized by the named executive officers in regard to the
split dollar payments. The taxable compensation recognized by
the named executive officers in 1999 as a result of payments
made pursuant to the split dollar agreements is: $33,617 for
Mr. Rutland; $4,513 for Mr. De Wulf; $1,446 for Mr. Poole;
$1,798 for Mr. Collier; and $1,038 for Mr. West.
(6) Mr. West joined the Company in 1997, and his compensation in
1997 includes amounts paid by his former employer through
September 30, 1997, which was acquired by the Company on that
date.
OPTION/SAR GRANTS FOR LAST FISCAL YEAR
Potential Realizable Value at Assumed Annual Rates of
INDIVIDUAL GRANTS Stock Price Appreciation for Option Term (4/10 Years)*
----------------- -----------------------------------------------------
5% 10%
------------------------ ------------------------
% of Total
Number of Options/
Securities SARS
Underlying Granted to Exercise
Options/ Employees or Base
SARS in Fiscal Price Expiration Price Aggregate Price Per Aggregate
Name Granted(1) Year ($/Share)(1) Date Per Share Value(2) Share Value(2)
---- ---------- ---- ------------ ---- --------- -------- ----- --------
Robert J. Rutland -- -- -- -- -- -- -- --
Bernard O. De Wulf -- -- -- -- -- -- -- --
A. Mitchell Poole, Jr. -- -- -- -- -- -- -- --
Joseph W. Collier -- -- -- -- -- -- -- --
Randall E. West 75,000/5,163 44.1/23.0 7.0625/6.0 11/29/99/ $9.98/ $218,813/0 $15.89/8.97 $662,063/
12/17/04 7.45 104,250
*The dollar gains under these columns result from calculations assuming 5% and
10% growth rates from the December 31, 1999 closing price of the Company's
Common Stock as set by the Securities and Exchange Commission and are not
intended to forecast future price appreciation of the Common Stock. The gains
reflect a future value based upon growth at these prescribed rates.
(1) Represents awards of 5,163 stock appreciation rights ("SARs") pursuant
to the Allied Holdings, Inc. Stock Appreciation Rights Plan (the "SAR
Plan") and includes 75,000 shares subject to an option granted in 1999.
The SAR awards vest over 3 years and must be exercised during the
fourth year. The exercise price for the SAR awards increases 6% per
year. Mr. West's option vests over three years.
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It is important to note that stock appreciation rights have value to
recipients, including the named executive officers, only if the stock
price advances beyond the exercise date price shown in the table,
increased by 6% per year, during the option term.
(2) Not discounted to present value. Using a discount rate of 10.5%, which
approximates the Company's cost of capital, the present value of the
assumed potential realizable value of Mr. West's awards is $79,895 as
to options and $0 as to SARS at a 5% annual rate of stock price
appreciation and $241,740 as to options and 69,672 as to SARS at a 10%
annual rate of stock price appreciation.
The following table sets forth as to each of the named executive
officers information with respect to option exercises during 1999 and the status
of their options on December 31, 1999 as to (i) the number of shares of Common
Stock underlying options exercised during 1999, (ii) the aggregate dollar value
realized upon the exercise of such options, (iii) the total number of
exercisable and non-exercisable stock options held on December 31, 1999 and (iv)
the aggregate dollar value of in-the-money exercisable options on December 31,
1999.
AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Value of Unexercised
Shares Acquired Number of Unexercised Options In-the-Money Options at Fiscal
Upon Value at Fiscal Year End Year End(1)
Exercise of Realized Upon ------------------ -----------
Name Option Exercise Exercisable Unexercisable Exercisable Unexercisable
---- ------ -------- ----------- ------------- ----------- -------------
Robert J. Rutland -- -- -- -- -- --
Bernard O. De Wulf -- -- -- -- -- --
A. Mitchell Poole, Jr. -- -- -- -- -- --
Joseph W. Collier -- -- 40,750 10,000 -- --
Randall E. West -- -- 6,666 78,334 -- --
(1) In accordance with the Securities and Exchange Commission's rules,
values are calculated by subtracting the exercise price from the fair
market value of the underlying Common Stock. For purposes of this
table, fair market value is deemed to be $6.125, the closing price of
the Common Stock price reported on The New York Stock Exchange on
December 31, 1999. No value is assigned to the options because the
exercise price for the options is in excess of the fair market value of
the Common Stock on December 31, 1999.
EMPLOYMENT AND SEVERANCE AGREEMENTS
Messrs. Robert Rutland and Poole have entered into employment
agreements with the Company for five year terms ending in February 2005. Mr.
West has entered into a two year
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employment agreement ending in December 2001. Messrs. De Wulf and Collier have
entered into employment agreements for five year terms ending in January 2001.
These agreements provide for compensation to the officers in the form of annual
base salaries, plus percentage annual increases in subsequent years based upon
either the Consumer Price Index, or such amount established by the Compensation
Committee.
Each of the employment agreements also provides that the officers will
receive severance benefits if: (i) the Company terminates the officer's
employment other than for cause or elects not to extend the officer's employment
beyond any initial or renewal term of the agreement, (ii) the officer terminates
his employment with the Company as a result of a material change in the duties
or responsibilities of the officer or a failure to be elected or appointed to
the position held by him, (iii) the officer terminates his employment as a
result of relocation of the officer, or requirement that the officer perform
substantially all his duties, outside the metropolitan Atlanta, Georgia area,
(iv) the Company commits any material breach of the agreement that remains
uncured for thirty days following written notice thereof from the officer, (vi)
a liquidation, dissolution, consolidation or merger of the Company (other than
with an affiliated entity) occurs, (vii) within two years following a "change of
control" with respect to the Company, the officer's employment agreement is
terminated or not extended for any renewal term or (viii) a petition in
bankruptcy is filed by or against the Company or the Company makes an assignment
for the benefit of creditors or seeks appointment of a receiver or custodian for
the Company.
The severance benefits payable with respect to Messrs. Rutland, Poole
and West include a cash payment equal to three times each of (i) the officer's
annual base salary for the year such termination occurs, plus (ii) the officer's
bonus, which includes an amount equal to (A) the greater of (1) the average of
each of the previous two years' bonus payments under the Incentive Plan, (2) the
average of each of the previous two years' "target bonus" amounts under the
Incentive Plan or (3) the amount of the "target bonus" for such officer under
the Incentive Plan for the year in which such officer's employment with the
Company is terminated, plus (B) an amount equal to the dollar value of the
restricted stock award granted to the officer with respect to the most recent
annual award of restricted stock made under the LTI Plan. If Messrs. Rutland and
Poole are terminated other than pursuant to a "change of control" and there are
more than three years remaining on the term of their employment agreements, they
will be entitled to receive an amount equal to the number of years or partial
years remaining on their employment agreement times each of the above items.
The severance benefits payable with respect to Mr. De Wulf include a
cash payment equal to two times each of (i) Mr. De Wulf's annual base salary for
the year such termination occurs, plus (ii) (A) the average of the cash bonus
payments paid to Mr. De Wulf for each of the previous two fiscal years and (B)
the average of the aggregate dollar value (as determined on the date of
termination) of any equity-based consideration received by Mr. De Wulf for each
of the previous two fiscal years.
The severance benefits payable to Mr. Collier include a cash payment
equal to two times each of (i) Mr. Collier's annual base salary for the year
such termination occurs, plus (ii) the average of the greater of (A) the cash
bonus payments paid to Mr. Collier for each of the previous two fiscal years or
(B) the target bonus amounts for Mr. Collier for each of the previous two fiscal
years, including the average of any bonus paid to Mr. Collier under the
Incentive Plan during such two fiscal years, plus (iii) the average of the
aggregate dollar value (as determined on the date of
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termination) of any equity-based consideration received by Mr. Collier for each
of the previous two fiscal years.
A "change of control" under the employment agreements of Messrs.
Rutland, Poole, West and Collier occurs (i) in the event of a merger,
consolidation or reorganization of the Company following which the shareholders
of the Company immediately prior to such reorganization, merger or consolidation
own in the aggregate less than seventy percent (70%) of the outstanding shares
of common stock of the surviving corporation, (ii) upon the sale, transfer or
other disposition of all or substantially all of the assets or more than thirty
percent (30%) of the then outstanding shares of common stock of the Company,
other than as a result of a merger or other combination of the Company and an
affiliate of the Company, (iii) upon the acquisition by any person of beneficial
ownership (as defined in the Exchange Act) of twenty percent (20%) or more of
the combined voting power of the Company's then outstanding voting securities or
(iv) if the members of the Board of Directors who served as such on the date of
the applicable employment agreement (or any successors approved by two-thirds
(2/3) of such Board members) cease to constitute at least two-thirds (2/3) of
the membership of the Board.
A "change of control" under Mr. De Wulf's employment agreement occurs
(i) in the event of a merger, consolidation or reorganization of the Company
following which the shareholders of the Company immediately prior to such
reorganization, merger or consolidation own in the aggregate less than fifty
percent (50%) of the outstanding shares of common stock of the surviving
corporation or (ii) upon the sale, transfer or other disposition of all or
substantially all of the assets or more than fifty percent (50%) of the then
outstanding shares of common stock of the Company, other than as a result of a
merger or other combination of the Company and an affiliate of the Company.
The severance benefits that would have been due upon termination
following a change of control pursuant to the employment agreements effective
March 1, 2000 are: $3,000,000 to Mr. Rutland, $877,773 to Mr. De Wulf,
$3,825,000 to Mr. Poole, $1,179,644 to Mr. Collier, and $3,082,560 to Mr. West.
The Company is also required to provide to the officer group medical and
hospitalization benefits and related benefits for a period of three years after
a change of control as to Messrs. Rutland, Poole and West and for a period of
two years after a change of control for Messrs. DeWulf and Collier.
During 1999, the Compensation Committee approved amendments to the
employment agreements of each of the named executive officers to include the
value of equity based compensation in the calculation of amounts due to the
executive officers upon termination of employment.
LONG-TERM INCENTIVE PLAN
The Company's LTI Plan allows for the issuance of an aggregate of
650,000 shares of Common Stock. The LTI Plan authorizes the Company to grant
incentive stock options, non-qualified stock options, stock appreciation rights,
restricted stock, performance units and performance shares to eligible employees
as determined by the LTI Plan. The LTI Plan was adopted and approved by the
Board of Directors and shareholders in July 1993. For a detailed description of
the LTI Plan, please refer to the information contained under Proposal No. 2.
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The Compensation Committee elects those employees to whom awards are
granted under the LTI Plan and determines the number of performance units,
performance shares, shares of restricted stock, and stock appreciation rights
granted pursuant to each award and prescribes the terms and conditions of each
such award.
Nonqualified Stock Options
During 1999 the Company granted non-qualified stock options to purchase
20,000 shares of the Common Stock at a price per share of $7.0625. The options
are granted pursuant to the non-qualified stock option provisions set forth in
the LTI Plan and are not intended to qualify as incentive stock options within
the meaning of the Internal Revenue Code of 1986, as amended. Options granted
become exercisable after one year in 33% increments per year and expire ten
years from the date of the grant. Options to acquire 318,050 shares of Common
Stock pursuant to the nonqualified stock option plan were exercisable at
December 31, 1999.
Restricted Stock Plan
Effective December 19, 1996 the Company adopted the Allied Holdings,
Inc. Restricted Stock Plan ("Restricted Stock Plan") pursuant to authority
granted by the LTI Plan. The awards granted under the Restricted Stock Plan vest
over five years, 20% per year commencing on the first anniversary of the date of
grant. On January 4, 1999 the Company awarded an aggregate of 83,759 shares,
with an aggregate value of $1,204,035 as of the date of grant.
Incentive Stock Options
On November 29, 1999, the Compensation Committee granted options to
purchase an aggregate of 150,000 shares of the Company's Common Stock at a price
per share of $7.0625 to four officers of the Company and its subsidiaries. The
options were granted pursuant to the incentive stock option provisions of the
LTI Plan and are intended to qualify as Incentive Stock Options within the
meaning of the Internal Revenue Code of 1986, as amended. The options granted
will become exercisable in 33% increments per year over a three year period, and
expire ten years from the date of grant.
STOCK APPRECIATION RIGHTS PLAN
The Board of Directors of the Company adopted the SAR Plan effective
January 1, 1997. The purpose of the SAR Plan is to provide deferred compensation
to certain management employees of the Company. Such deferred compensation shall
be based upon the award of stock appreciation rights units, the value of which
are related to the appreciation in fair market value of the Common Stock. All
payments under the SAR Plan are made in cash. The Compensation Committee
determines the applicable terms for each award under the SAR Plan. In 1999, the
Compensation Committee issued stock appreciation rights units for an aggregate
of 22,458 shares of Common Stock. All awards under the SAR Plan were made in
connection with the Incentive Plan. The SAR awards vest over 3 years and must be
exercised during the fourth year. The exercise price increases 6% per year.
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RETIREMENT PLANS
The Company maintains a tax qualified defined benefit pension plan (the
"Retirement Plan"). The table set forth below illustrates the total combined
estimated annual benefits payable under the Retirement Plan to eligible salaried
employees for years of service assuming normal retirement at age 65.
Allied Defined Benefit Pension Plan
Years of Service
----------------
Remuneration 10 15 20 25 30 35
------------ -- -- -- -- -- --
100,000 20,000 30,000 40,000 50,000 50,000 50,000
125,000 25,000 37,500 50,000 62,500 62,500 62,500
150,000 30,000 45,000 60,000 75,000 75,000 75,000
175,000 32,000 48,000 64,000 80,000 80,000 80,000
200,000 32,000 48,000 64,000 80,000 80,000 80,000
225,000 32,000 48,000 64,000 80,000 80,000 80,000
250,000 32,000 48,000 64,000 80,000 80,000 80,000
275,000 32,000 48,000 64,000 80,000 80,000 80,000
300,000 32,000 48,000 64,000 80,000 80,000 80,000
The Retirement Plan uses average compensation, as defined by the
Retirement Plan, paid to an employee by the plan sponsor during a plan year for
computing benefits. Compensation includes bonuses and any amount contributed by
a plan sponsor on behalf of an employee pursuant to a salary reduction agreement
which is not includable in the gross income of the employee under Internal
Revenue Code ("IRC") Sections 125, 402(a)(8), or 402(h). However, compensation
in excess of the IRC Section 401(a)(17) limit shall not be included. The limit
for 1999 is $160,000.
The compensation covered by the Retirement Plan for Messrs. Robert
Rutland, De Wulf, Poole, Collier and West is $160,000.
The estimated years of credited service for each of the current
executives as of December 31, 1999 is as follows:
Years of Credited Service
Name as of December 31, 1999
---- -----------------------
Robert J. Rutland 35.7
Joseph W. Collier 20.0
Bernard O. De Wulf 16.0
A. Mitchell Poole, Jr. 11.7
Randall E. West 2.3
The benefits shown in the Pension Plan Table are payable in the form of
a straight life
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annuity commencing at age 65. There is no reduction for social security benefits
or other offset amounts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
David G. Bannister, William P. Benton and Robert W. Woodson served as
members of the Compensation Committee during the year ended December 31, 1999.
None of the members of the Compensation Committee were officers of the Company,
and none of the executive officers of the Company has served on the board of
directors or the compensation committee of any entity that had officers who
served on the Company's board of directors.
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PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(stock price appreciation plus dividend) on the Company's Common Stock with the
cumulative total return of The Nasdaq Stock Market (U. S. Companies) and of the
Nasdaq Trucking and Transportation Companies for the period beginning December
31, 1994 through and including December 31, 1999. While the Company began
trading on the New York Stock Exchange in March 1998, it believes that the
NASDAQ Stock Market (U.S.) Index and the NASDAQ Trucking & Transportation Index
are the appropriate indices for purposes of its Performance Graph.
RESEARCH DATA GROUP PEER GROUP TOTAL RETURN WORKSHEET
ALLIED HLDGS INC
---------------------------------------------------------------------------------------
12/94 3/95 6/95 9/95 12/95 3/96 6/96 9/96 12/96 3/97
ALLIED HOLDINGS, INC. 100.00 89.58 72.92 66.67 71.88 75.00 87.50 85.42 66.67 56.25
NASDAQ STOCK MARKET (U.S.) 100.00 108.95 124.62 139.63 141.33 147.95 160.01 165.70 173.89 164.46
NASDAQ TRUCKING & TRANSPORTATION 100.00 104.75 114.16 117.20 116.67 127.55 126.59 121.20 128.79 126,86
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2. APPROVAL OF AN AMENDMENT TO INCREASE SHARES
SUBJECT TO THE LTI PLAN
The LTI Plan was adopted by the Company in 1993. The LTI Plan is
intended to provide additional incentives to the officers and key employees of
the Company and its subsidiaries and affiliates whose contributions are
substantial and essential to the continued growth and success of the business of
the Company. Approximately 1,500 employees are eligible to participate in the
LTI Plan. The LTI Plan is also intended to motivate eligible officers and
employees to perform their responsibilities in the best interests of the Company
and to attract and retain competent, qualified and dedicated persons whose
efforts will result in the long-term growth and profitability of the Company.
The LTI Plan provides that 650,000 shares of the Common Stock of the
Company may be issued pursuant to the various components of the LTI Plan. As of
March 1, 2000, the Company had issued options and other grants providing the
recipients with the right to acquire 588,349 shares of the Common Stock of the
Company. The Board of Directors has determined that it is in the best interests
of the Company to amend the LTI Plan in order to provide that an additional
850,000 shares of the Common Stock may be issued pursuant to the LTI Plan in
order to further the intentions of the Plan. The additional shares represent
10.6% of the Common Stock issued and outstanding as of March 20, 2000. The
number of shares available under the LTI Plan is subject to adjustments in the
event of any stock split, exchange, reclassification or other change in the
shares of Common Stock. The Board of Directors approved the amended form of the
LTI Plan.
Additionally, the Compensation Committee of the Board of Directors (the
"Committee") on January 3, 2000 made awards providing for the issuance of up to
178,193 shares of restricted stock pursuant to the LTI Plan, subject to the
approval of the amendment to increase the shares subject to the LTI Plan at the
annual meeting. The Board of Directors further believes that additional shares
will be necessary under the LTI Plan to meet the needs of the Company in the
future.
PRINCIPAL FEATURES OF THE LTI PLAN
The LTI Plan provides for granting of five types of awards on a stand
alone, combination, or tandem basis. Under the LTI Plan, the Company may grant
nonqualified stock options, incentive stock options, restricted shares, stock
appreciation rights, and performance awards.
ADMINISTRATION. The terms of the LTI Plan requires administration by
the board or a committee appointed by the Board of Directors. Currently, the
Compensation Committee (the "Committee") administers the LTI Plan. The Committee
is authorized to, among other things,
- determine the employees who will be granted awards under the
LTI Plan;
- determine the terms and conditions of each participants' award
agreement;
- establish the exercise price and other provisions of each
option award;
- state the time and transfer restrictions for each award of
restricted shares;
- establish performance goals and performance periods and
maximum values applicable to performance awards or stock
appreciation rights;
- construe and interpret the LTI Plan and awards granted
thereunder; and
- perform all such acts it deems necessary or advisable to
administer the LTI Plan.
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ELIGIBILITY. All officers or other key employees of the Company or its
subsidiaries who are designated by the Committee are eligible to participate in
both plans. Directors who are not employees are entitled to participate in the
LTI Plan. As of March 20, 2000, there were approximately 1,500 employees
eligible to participate in the LTI Plan.
LIMITATIONS ON TRANSFER. No LTI Plan award granted under the LTI Plan
may be transferred by an optionee except by will or by the laws of descent and
distribution. Restricted shares are not transferable until the restriction
period expires. The Committee may permit transfers where it concludes that such
transfer is otherwise appropriate and desirable, taking into account any state
or federal tax or securities laws.
TERMINATION AND AMENDMENT. The Board of Directors may at any time
terminate the LTI Plan and may at any time amend or modify the LTI Plan in any
respect, except as provided below. No amendment, modification, or termination of
the LTI Plan may in any manner adversely affect the rights of any participant
without the consent of the participant or reduce the exercise price or extend
the term of an outstanding option beyond ten years from the date of grant (or
five years from the date of grant of any incentive stock option granted to a
holder of 10% or more of the Company's voting stock). Additionally, the Board
may not, without the approval of the Company's shareholders,
- increase the number of shares authorized for issuance under
the LTI Plan;
- extend the term of the LTI Plan; or
- effect any other change that requires the approval of the
shareholders under applicable law or regulation.
ADJUSTMENTS. The limitations with respect to the number of shares that
may be granted pursuant to awards under the LTI Plan are subject to adjustment
in the event of a stock split, stock or other dividend, combination or exchange
of shares, exchange for other securities, reclassification, recapitalization,
reorganization, merger, consolidation, spin-off, split-up, public offering,
private placement or other similar change.
CHANGE OF CONTROL. If a "change of control" occurs as determined under
the LTI Plan, the following will occur with respect to all awards outstanding
under the LTI Plan:
- awards granted under the LTI Plan will become immediately
exercisable or vested;
- any performance goals to which awards are subject will be
deemed satisfied as to the number of shares or options
issuable or cash payable as determined in the applicable LTI
Plan agreement and any compensation under such awards will
become due and payable ten days after a change of control; and
- in the event a participant may be subject to liability under
Section 16(b) of the Exchange Act for awards granted less than
6 months prior to a change of control, the participant's
awards will remain exercisable for 60 days after the date that
is 6 months from the date of the award grant.
STOCK OPTIONS. A stock option award grants to the optionee the right to
buy a specified number of shares of common stock of the Company at a fixed price
during a specified time, and subject to other terms and conditions as the
Committee may determine. Incentive stock options are intended to be treated as
such within the meaning of Section 422 of the Code. All stock options that
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do not qualify as incentive stock options are nonqualified stock options and do
not have the special income tax advantages associated with incentive stock
options.
Exercise Price. The exercise price of all options is determined by the
Committee at the time of grant, but the exercise price of any incentive stock
option may not be less than 100% of the fair market value of the underlying
stock on the date of grant, or 110% in the case of an incentive stock option
granted to a holder of 10% or more of the Company's voting stock.
Payment. Each option may be exercised in whole, at any time, or in
part, from time to time, within the period for exercise set forth in the related
option agreement. The exercise price is payable at the Committee's discretion
- in cash;
- in shares of common stock of the same class of stock that is
being purchased;
- by a combination of cash and stock; or
- any other method that the Committee deems appropriate.
RESTRICTED SHARES. A grant of restricted shares under the LTI Plan is
an award of shares of common stock of the Company that are subject to
restrictions on transfer, or on other incidents of ownership, for the periods of
time as the Committee may determine. Certificates representing restricted shares
are held by the recipient during the applicable period of the restriction.
During this period, the beneficial owner of the restricted shares cannot
transfer those shares. The beneficial owner is entitled to vote his restricted
shares and to retain cash dividends that may be paid on such shares during the
time of the restriction unless otherwise provided for in the award agreement.
Limitations. No more than 50% of the maximum number of shares that may
be issued or transferred to participants under the LTI Plan may be issued in
connection with awards of restricted shares and performance awards. Under this
limitation, the Company currently can issue no more than 325,000 restricted
shares and/or performance awards. Upon approval of the proposed increase in the
number of shares available under the plan, the Company will be able to issue up
to 750,000 restricted shares and/or performance awards. As of March 20, 2000,
the Company had issued 388,275 Restricted Shares, 178,193 of which are subject
to shareholder approval of the proposed amendment to the LTI Plan.
PERFORMANCE AWARDS. A performance award is a right granted to an
employee to receive cash, options, restricted shares, or unrestricted shares of
Common Stock of the Company. This compensation is not issued to the employee
until after he satisfies his performance goals during the applicable performance
period. The Committee determines the performance period and performance goals.
Factors. The Committee bases the performance goals on one or more
objective factors, including increases in earnings per share, pre-tax profits,
net earnings or net worth, return on equity or assets, or any combination of the
foregoing or any other standard deemed appropriate by the Board. These
performance goals may be different for individual participants or may be based,
in whole or in part, on the performance of a division, department, line of
business or subsidiary of the Company or the performance of the Company as a
whole.
Receipt of a Performance Award. Performance awards will only be
received by employees
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who meet their specific performance goals. To be entitled to receive a
performance award, an employee must remain in the employment of the Company or
its subsidiaries through the end of the performance period. The Committee may,
in its sole discretion, allow for exceptions to this requirement. At the
discretion of the Committee, a performance award may provide for deferral of
vesting and/or transfer rights based on the satisfaction of terms and conditions
in addition to satisfaction of the performance goals.
STOCK-APPRECIATION RIGHTS. Stock appreciation rights, also known as
SARs, may be granted in tandem with a stock option or may be unrelated to a
stock option. SARs will vest and become exercisable at a rate determined by the
Committee, and will remain exercisable for such period as specified by the
Committee. SARs entitle holders to receive from the Company an amount equal to
the excess of the fair market value of a share of common stock on the exercise
of the SAR over the fair market value of a share of common stock on the date of
grant. The Committee will determine in its sole discretion whether a SAR will be
settled in cash, common stock or a combination thereof.
DESCRIPTION OF THE PROPOSED AMENDMENT
The amendment to the LTI Plan is an increase in the number of shares of
Company Common Stock available for issuance. The LTI Plan currently provides
that the maximum number of shares of Company Common Stock that may be issued is
650,000. The amendment would increase this amount by 850,000 shares, subject to
the limitations described above.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF GRANTS UNDER THE LTI PLAN
NONQUALIFIED STOCK OPTIONS. For federal income tax purposes, no income
is recognized by a participant upon the grant of a nonqualified stock option
under the LTI Plan. Upon the exercise of a nonqualified stock option, however,
compensation taxable as ordinary income will be realized by the participant in
an amount equal to the excess of the fair market value of a share of Company
Common Stock, on the date of such exercise, over the exercise price. A
subsequent sale or exchange of such shares will result in gain or loss measured
by the difference between: (i) the exercise price, increased by any compensation
reported upon the participant's exercise of the option, and (ii) the amount
realized on such sale or exchange. Such gain or loss will be capital in nature
if the shares were held as a capital asset. See "Maximum Capital Gains Rates"
below.
The Company generally is entitled to a deduction (subject to the other
deduction limitation provisions of the Code) for compensation paid to a
participant at the same time and in the same amount as the participant is
considered to have realized compensation by reason of the exercise of an option.
INCENTIVE STOCK OPTIONS. Generally, for federal income tax purposes, no
income is recognized by the participant upon the grant or exercise of an
incentive stock option. If shares of Company Common Stock are issued to a
participant pursuant to the exercise of an incentive stock option granted under
the LTI Plan, and no "disqualifying" disposition of such shares is made by such
participant within two years after the date of grant of the option or within one
year after the transfer of such shares to the participant, then (a) upon sale of
such shares, any amount realized in excess of the option price will be taxed to
such participant as a capital gain (see "Maximum Capital Gains Rates" below) and
any loss sustained will be a capital loss, and (b) no deduction will be allowed
to
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the Company for federal income tax purposes. Upon exercise of an incentive stock
option, the participant may be subject to alternative minimum tax on certain
items of tax preference.
If shares of Company Common Stock, acquired upon the exercise of an
incentive stock option are disposed of prior to the expiration of the
two-years-from-grant/one-year-from-transfer holding period (i.e. a
"disqualifying disposition"), generally (a) the participant will realize
ordinary income in the year of disposition in the amount equal to the excess (if
any) of the fair market value of the shares at exercise (or, if less, the amount
realized on the disposition of the shares) over the option price thereof, and
(b) the Company will be entitled to deduct such amount (subject to the other
deduction limitation provisions of the Code). Any further gain or loss realized
will be taxed as capital gain or loss, which will be taxed at rates which depend
on how long such shares were held (see "Maximum Capital Gains Rates" below), and
will not result in any deduction by the Company. If an incentive stock option is
exercised at a time when it no longer qualifies as an incentive stock option,
the option is treated as a nonqualified stock option.
RESTRICTED SHARES; PERFORMANCE AWARDS. Awards of restricted shares
generally will not result in taxable income to the employee for federal income
tax purposes at the time of the grant. A recipient of restricted shares
generally will receive compensation subject to tax at ordinary income rates on
the fair market value of the shares at the time the restricted shares are no
longer subject to forfeiture. However, a recipient who so elects under Section
83(b) of the Code within 30 days of the date of the grant will have ordinary
taxable income on the date of the grant equal to the fair market value of the
restricted shares as if such shares were unrestricted and could be sold
immediately. If the restricted shares subject to such election are forfeited,
the recipient will not be entitled to any deduction, refund or loss for tax
purposes with respect to the forfeited shares. Upon sale of the restricted
shares after the forfeiture period has expired, the recipient's holding period
for purposes of calculating the tax on capital gains and losses begins when the
restriction period expires, and the tax basis will be equal to the fair market
value of the restricted shares on the date the restriction period expires.
However, if the recipient timely elects to be taxed as of the date of the grant,
the holding period commences on the date of the grant and the tax basis will be
equal to the fair market value of the restricted shares on the date of the grant
as if such shares were then unrestricted and could be sold immediately.
A performance award generally will not result in taxable income to the
employee for federal income tax purposes at the time of grant. A recipient of a
performance award generally will be subject to tax at the same time and in the
same manner as applicable to recipients of restricted shares as described above.
The Company is generally entitled to a deduction (subject to the
deduction limitation provisions of the Code) for compensation paid to a
participant in the same amount and at the same time as the participant is
considered to have realized compensation with respect to restricted shares or a
performance award.
MAXIMUM CAPITAL GAINS RATES. Capital gains recognized by recipients
generally will be subject to a maximum federal income tax rate of 20% if the
shares sold or exchanged are held for more than 12 months. However, if the
holding period of shares begins after December 31, 2000, and such shares are
held for more than 5 years, the maximum capital gains rate for federal income
tax purposes for recipients on the sale or exchange of such shares generally
will be 18%. If an option was held on or before December 31, 2000, then shares
acquired pursuant to an exercise of that option will not qualify for such 18%
maximum rate, regardless of when such shares are acquired.
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LIMITS ON DEDUCTIONS
Under Section 162(m) of the Code, the amount of compensation paid to
the Chief Executive Officer and the four other most highly paid executive
officers of the Company in the year for which a deduction is claimed by the
Company (including its subsidiaries) is limited to $1 million per person, except
that compensation that is performance-based will be excluded for purposes of
calculating the amount of compensation subject to this $1 million limitation.
The ability of the Company to claim a deduction for compensation paid to any
other executive officer or employee of the Company (including its subsidiaries)
is not affected by this provision.
Awards under the LTI Plan for which the Company may otherwise claim a
deduction will be subject to the limitations on deductibility in Section 162(m)
of the Code. The Committee will take into account the deductibility of awards
under Section 162 (m) of the Code in determining the awards to be granted under
the LTI Plan.
If a shareholder specifies a choice on the proxy, the shares of Common
Stock represented by the proxy will be voted as specified on such proxy with
respect to the proposal to amend the LTI Plan. If no specification is made, the
shares represented by the proxy will be voted "FOR" the proposal to amend the
LTI Plan to increase the number of shares that may be issued under the LTI Plan
by 850,000 shares.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE PROPOSAL TO AMEND THE LTI PLAN TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK RESERVED FOR ISSUANCE UNDER THE LTI PLAN BY 850,000 SHARES.
ESTIMATED BENEFITS
The following table illustrates estimated benefits under the LTI Plan.
Awards under the LTI Plan are based upon the Company's performance. Accordingly,
future awards under the LTI Plan are not determinable at this time. However, the
awards set forth in the following table represent awards granted under the LTI
Plan on January 3, 2000 subject to shareholder approval of the amendment to
increase the number of shares authorized for issuance under the LTI Plan.
ESTIMATED BENEFITS
LTI PLAN
NAME AND POSITION NUMBER OF SHARES
- ----------------- ----------------
Robert J. Rutland........................... 21,418
Bernard O. De Wulf.......................... 8,021
A. Mitchell Poole, Jr....................... 28,558
Joseph W. Collier........................... 9,106
Randall E. West............................. 22,342
Executive Group(1)...... ................... 110,829
Non-Executive Group......................... --
Non-Executive Officer Employee Group........ 71,142
- --------------
(1) Includes 22,342 awarded to executive officers not listed above.
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3. RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors of the Company, upon the recommendation of the
Audit Committee, has appointed the firm of Arthur Andersen LLP to serve as
independent public accountants of the Company for the fiscal year ending
December 31, 2000, subject to ratification of this appointment by the
shareholders of the Company. Arthur Andersen LLP has served as independent
public accountants of the Company since 1980 and is considered by management of
the Company to be well qualified. The Company has been advised by the firm that
neither it nor any member thereof has any financial interest, direct or
indirect, in the Company or any of its subsidiaries in any capacity.
Although not formally required, the appointment of the independent
public accountants of the Company has been directed by the Board of Directors to
be submitted to the shareholders for ratification as a matter of sound corporate
practice. If the shareholders do not ratify the appointment of Arthur Andersen
LLP, the appointment of the independent public accountants will be reconsidered
by the Board of Directors. If the shareholders ratify the appointment, the Board
of Directors, in its sole discretion, may still direct the appointment of new
independent public accountants at any time during the 2000 fiscal year if the
Board of Directors believes that such a change would be in the best interests of
the Company.
The Company expects representatives of Arthur Andersen LLP to be
present at the Annual Meeting of shareholders and expects that they will have
the opportunity to make a statement if they desire to do so. It is further
anticipated that such representatives will be available to respond to
appropriate questions.
If a shareholder specifies a choice on the proxy, the shares of Common
Stock represented by the proxy will be voted as specified on such proxy with
respect to the ratification of the appointment of Arthur Andersen LLP as
independent public accountants of the Company. If no specification is made and
the power to vote the shares is not withheld, the shares represented by the
proxy will be voted "FOR" ratification of the appointment of Arthur Andersen
LLP.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE 2000 FISCAL YEAR.
SHAREHOLDER PROPOSALS
Under the Company's Bylaws any nominations for the Board of Directors
and any proposal that a shareholder intends to present at the 2001 Annual
Meeting (including any nominations for the Board of Directors) must be received
at 160 Clairemont Avenue, Suite 200, Decatur, Georgia 30030 addressed to the
attention of A. Mitchell Poole, Jr., Vice Chairman and Chief Executive Officer,
not later than 60 days prior to the scheduled date of the 2001 Annual Meeting;
provided, that if notice or prior public disclosure of the scheduled date of the
2001 Annual Meeting is given less than 60 days prior to the scheduled date, any
nominations for the Board of Directors must be received not later than the tenth
day after the date of the earlier of either notice of the meeting date or prior
public disclosure of the meeting date. Nominations for the Board of Directors
must also include
26
29
information regarding the nominee and the person nominating as required by the
Company's by-laws.
Under the Securities and Exchange Commission's Rule 14a-8, any proposal
that a shareholder intends to have included in the Company's proxy statement
must be received at the Company's principal executive offices prior to January
17, 2001 and must be a proper subject for inclusion therein.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of the Common Stock, to file reports of ownership and changes in ownership of
the Common Stock with the Securities and Exchange Commission and The New York
Stock Exchange. Officers, directors and greater than 10% beneficial owners are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of the forms furnished to the
Company, the Company believes that during the 1999 fiscal year all filing
requirements applicable to its officers, directors and 10% shareholders were
complied with.
OTHER MATTERS
Action will be taken on whatever other matters may properly come before
the meeting. Management of the Company is not aware of any other business
matters to be considered at the annual meeting except the Report of Management
and presentation of financial statements. If any other matters properly come
before the meeting, it is the intention of the persons named in the enclosed
Proxy to vote all proxies with respect to such matters in accordance with the
recommendations of management of the Company.
No director has informed the Company that he intends to oppose any
recommended action as specified in this Proxy Statement. With the exception of
election to office, and the approval of the amendment to the LTI Plan, no
director or officer has a substantial interest in any matter to be acted upon.
Management of the Company urges you to sign and return the enclosed
Proxy promptly whether or not you expect to be present at the meeting. No
postage is necessary if mailed in the United States. IF YOU DO ATTEND, YOU MAY
THEN WITHDRAW YOUR PROXY.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO DANIEL H. POPKY, 160
CLAIREMONT AVENUE, SUITE 200, DECATUR, GEORGIA 30030, A COPY OF THE COMPANY'S
1999 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) WILL BE PROVIDED FREE OF
CHARGE. EXHIBITS TO FORM 10-K WILL BE PROVIDED UPON REQUEST AND PAYMENT OF
REASONABLE COST, IF ANY, OF REPRODUCTION AND DELIVERY.
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30
[1231--ALLIED HOLDINGS, INC.] [FILE NAME: AHI18B.ELX] [VERSION--2][03/17/00]
[orig. 03/10/00]
DETACH HERE
PROXY
ALLIED HOLDINGS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the notice of the annual
meeting of the shareholders of Allied Holdings, Inc. (the "Company") to be held
on May 17, 2000 at 10:00 a.m., local time, at the Conference Center, Decatur
Holiday Inn, 130 Clairemont Avenue, Decatur, Georgia 30030 ("Annual Meeting"),
and the Proxy Statement attached thereto, and does hereby appoint Robert J.
Rutland and A. Mitchell Poole, Jr., or either of them (with full power to act
alone), the true and lawful attorney(s) of the undersigned with power of
substitution, for and in the name of the undersigned, to represent and vote, as
designated below, all of the shares of no par value common stock of the Company
which the undersigned is entitled to vote at the Annual Meeting, or at any
adjournment or adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH NOMINEE
LISTED IN PROPOSAL NUMBER 1, FOR PROPOSAL NUMBER 2, FOR PROPOSAL NUMBER 3 AND
UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING IN ACCORDANCE
WITH THE BEST JUDGMENT OF THE PROXY HOLDER, THIS PROXY MAY BE REVOKED BY
ATTENDING THE MEETING AND VOTING IN PERSON, OR BY FILING A SUBSEQUENT PROXY
WITH THE SECRETARY OF THE COMPANY PRIOR TO OR AT THE TIME OF THE MEETING.
- --------------- ---------------
| SEE REVERSE | | SEE REVERSE |
| SIDE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SIDE |
- --------------- ---------------
31
ALLIED HOLDINGS, INC.
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
[1231 - ALLIED HOLDINGS, INC.] [FILE NAME: AHI18A.ELX] [VERSION - 5]
[orig. 03/10/00]
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. Election of Directors.
FOR THREE-YEAR TERMS EXPIRING ANNUAL MEETING 2003:
NOMINEES: (01) David G. Bannister, (02) A. Mitchell Poole, Jr.
(03) Robert J. Rutland, (04) William P. Benton
FOR ALL [ ] [ ] WITHHELD
NOMINEES, FROM
except as ALL
indicated below NOMINEES
[ ]
--------------------------------------------------------------
Instructions: To withhold authority to vote for any individual
nominee(s) write that nominee's name on the space provided above.
FOR AGAINST ABSTAIN
2. Proposal to amend the Company's
Long-Term Incentive Plan to increase the [ ] [ ] [ ]
number of shares subject to the Plan by
850,000.
3. Proposal to appoint Arthur Andersen LLP [ ] [ ] [ ]
as independent public accountants of the
Company to serve for the 2000 fiscal year.
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting of any adjournments
thereof.
MARK HERE FOR ADDRESS CHANGE AND VOTE AT LEFT [ ]
I hereby revoke all proxies by me heretofore given for any meeting of the
shareholders of the Company.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
POSTAGE PAID ENVELOPE.
Please sign your proxy exactly as your name appears at left. When signing as an
attorney, executor, administrator, trustee, or guardian, give full title as
such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in a partnership name
by authorized person. WHEN SHARES ARE HELD BY JOINT TENANTS, OR IN THE NAME OF
TWO OR MORE PERSONS, ALL SHOULD SIGN.
Signature: Date: 3-21-00 Signature: Date:
----------------- ------------------ -----