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:
<Table>
[ ] 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-12
</Table>
Allied Holdings, 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)(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:
ALLIED HOLDINGS, INC.
160 CLAIREMONT AVENUE, SUITE 200
DECATUR, GEORGIA 30030
[LOGO INSERTED HERE]
NOTICE OF ANNUAL MEETING
MAY 22, 2002
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 22, 2002 at 10:00 a.m., local
time, for the following purposes:
1. To elect three directors for terms ending in 2005;
2. To amend the Company's amended and Restated Long Term
Incentive Plan (the "LTI Plan") to increase the number of
shares subject to the LTI Plan by 500,000 shares; and
3. 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 26, 2002 will be entitled to vote at the meeting. The stock transfer
books will not be closed.
By Order of the Board of Directors,
Thomas M. Duffy
Senior Vice President, Secretary and General Counsel
Decatur, Georgia
April 10, 2002
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE VOTE BY PROXY
PROMPTLY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
ALLIED HOLDINGS, INC.
160 CLAIREMONT AVENUE, SUITE 200
DECATUR, GEORGIA 30030
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 2002
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 22, 2002 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 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 Common Stock of the Company.
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, 2001 is enclosed with this Proxy Statement.
This Proxy Statement and the accompanying materials are first being mailed to
shareholders on or about April 10, 2002.
VOTING AND OUTSTANDING STOCK
At the close of business on the record date, March 26, 2002, the
Company had outstanding and entitled to vote at the annual meeting 8,293,293
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" 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 votes cast by shares entitled to vote at the annual
meeting. Votes that are withheld and broker non-votes will have no effect on
the election of directors.
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
plurality 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 each of the proposals. Broker non-votes are not entitled to vote on a
matter and will have no effect on the outcome of such proposals.
You may vote in person at the annual meeting or by proxy. Whether or
not you expect to be present at the annual meeting, please vote by proxy
promptly. To vote by proxy, you may select one of the following options:
VOTE BY TELEPHONE. You can vote your shares by telephone by calling
the toll-free telephone number (at no cost to you) shown on your proxy card.
Telephone voting is available 24 hours-a-day, seven days-a-week. Easy-to-follow
voice prompts allow you to vote your shares and confirm that your instructions
have been properly recorded. Our telephone voting procedures are designed to
authenticate the shareholder by using individual control numbers. Proxies
granted by telephone using these procedures are valid under Georgia law. You
can also consent to view future proxy statements and annual reports on the
Internet instead of receiving them in the mail. If you vote by telephone, you
do NOT need to return your proxy card.
VOTE BY INTERNET. You can also choose to vote on the Internet. The web
site for Internet voting is shown on your proxy card. Internet voting is
available 24 hours-a-day, seven days-a-week. You will be given the opportunity
to confirm that your instructions have been properly recorded. Proxies granted
over the Internet using these procedures are valid under Georgia law. If you
vote on the Internet, you do NOT need to return your proxy card.
VOTE BY MAIL. If you choose to vote by mail, simply mark your proxy
card, date and sign it, and return it in the postage-paid envelope provided.
Please do so as soon as possible so that your shares may be represented at the
annual meeting. If you wish to view future proxy statements and annual reports
on the Internet, check the box provided on the card.
REVOCATION OF PROXY. If you vote by proxy, you may revoke that proxy
at any time before it is voted at the special meeting. You may do this by: (i)
voting again by telephone or on the Internet prior to the meeting; (ii) signing
another proxy card with a later date and returning it to us prior to the
meeting; or (iii) attending the meeting in person and casting a ballot.
IF YOU SIGN THE PROXY CARD OR SUBMIT YOUR VOTE BY INTERNET OR BY
TELEPHONE BUT DO NOT SPECIFY HOW YOU WANT YOUR SHARES TO BE VOTED, YOUR SHARES
WILL BE VOTED "FOR" EACH NOMINEE LISTED IN PROPOSAL 1 AND "FOR" PROPOSAL 2. THE
PERSONS NAMED IN THE ENCLOSED PROXY CARD AND ACTING THEREUNDER WILL HAVE
DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE ANNUAL
MEETING IN ACCORDANCE WITH THEIR BEST JUDGMENT.
1. ELECTION OF DIRECTORS AND INFORMATION REGARDING DIRECTORS
The Bylaws 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) Guy W. Rutland, III, Robert R.
Woodson and J. Leland Strange; (ii) Guy W. Rutland, IV, Berner F. Wilson, Jr.
and Thomas E. Boland; and (iii) David G. Bannister, Robert J. Rutland, William
P. Benton and Hugh E. Sawyer. Pursuant to the Bylaws, the Board of Directors
set the number of directors serving on the Board at ten in March 2002.
2
The directors whose terms will expire at the 2002 annual meeting of
shareholders are Guy W. Rutland, III, Robert R. Woodson and J. Leland Strange.
Messrs. Rutland, Woodson and Strange each has been nominated to stand for
reelection as director to hold office until the 2005 annual meeting of
shareholders or until his successor is elected and qualified.
If any nominee is unable to stand for reelection, the Board of
Directors may, by resolution, provide for a lesser number of directors, or
designate a substitute nominee, 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.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE PROPOSAL TO ELECT THE THREE NOMINEES FOR DIRECTORS LISTED
BELOW.
NOMINEES FOR ELECTION TO TERMS EXPIRING 2005 ANNUAL MEETING
================================================================================
GUY W. RUTLAND, III
Director Since 1964
Age 65
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.
================================================================================
J. LELAND STRANGE
Director Since 2002
Age 60
Mr. Strange is Chairman of the Board of Directors, Chief Executive Officer and
President of Intelligent Systems Corporation and has been with that company
since its merger with Quadram Corporation in 1982. Mr. Strange serves on the
advisory board of Alliance Technology Ventures, Georgia Tech Research Corp. and
Georgia Institute of Technology's DuPree School of Management.
================================================================================
ROBERT R. WOODSON
Director Since 1993
Age 70
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 served as a director of
Haverty Furniture Companies, Inc. through May 2002.
================================================================================
3
================================================================================
INCUMBENT DIRECTORS - TERMS EXPIRING 2003 ANNUAL MEETING
================================================================================
DAVID G. BANNISTER
Director Since 1993
Age 46
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.
================================================================================
WILLIAM P. BENTON
Director Since 1998
Age 78
Mr. Benton retired as an Executive Director, a position he held since January
1997, with Ogilvy & Mather, an advertising agency, effective January 1, 2002.
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 within 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.
================================================================================
ROBERT J. RUTLAND
Director Since 1965
Age 60
Mr. Rutland has been Chairman of the Company since 1995, and served as Chairman
and Chief Executive Officer of the Company from February 2001 to June 2001 and
from December 1995 to December 1999. Mr. Rutland was the 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.
================================================================================
4
HUGH E. SAWYER
Director Since 2001
Age 48
Mr. Sawyer has been President and Chief Executive Officer of the Company since
June 2001. Mr. Sawyer served as President and Chief Executive Officer of Aegis
Communications Group, Inc. from April 2000 to June 2001. Mr. Sawyer served as
President of Allied Automotive Group, Inc., a subsidiary of the Company, from
January 2000 to April 2000. Mr. Sawyer was President and Chief Executive
Officer of National Linen Service, a subsidiary of National Service Industries,
Inc. from 1996 to 2000, and President of Wells Fargo Armored Service Corp., a
subsidiary of Borg-Warner Corp., from 1988 to 1995. Mr. Sawyer is a member of
the boards of directors of Aegis Communications Group, Inc., TWS, Inc. and
Hometown Communities, LLC.
================================================================================
INCUMBENT DIRECTORS - TERMS EXPIRING 2004 ANNUAL MEETING
================================================================================
THOMAS E. BOLAND
Director Since 2001
Age 67
Mr. Boland retired as Chairman of the Board of Wachovia Corporation of Georgia
and Wachovia Bank of Georgia, N.A., in April, 1994. Mr. Boland joined Wachovia
(formerly The First National Bank of Atlanta) in 1954 and was a senior
executive in various capacities until his retirement. Mr. Boland has been
Special Counsel to the President of Mercer University of Macon and Atlanta
since October 1995. Mr. Boland currently serves on the boards of directors of
Citizens Bancshares Corporation and Citizens Trust Bank in Atlanta. Mr. Boland
is past chairman of the board of directors of Minbanc Capital Corporation of
Washington, D.C. and formerly served on the boards of directors of InfiCorp
Holdings, Inc., Atlanta, VISA International and VISA U.S.A. of San Mateo,
California.
================================================================================
GUY W. RUTLAND, IV
Director Since 1993
Age 38
Mr. Rutland has been Senior Vice President of Performance Management and
Chaplaincy since July 2001, and was Executive Vice President and Chief
Operating Officer of Allied Automotive Group, Inc., a subsidiary of the
Company, from February 2001 to July 2001. Mr. Rutland was Senior Vice President
- - Operations of Allied Automotive Group, Inc. from November 1997 to February
2001. 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., a subsidiary of the
Company. 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
5
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.
================================================================================
BERNER F. WILSON, JR.
Director Since 1993
Age 63
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. Wilson was an officer or Vice Chairman of several of
the Company's subsidiaries. Mr. Wilson joined the Company in 1974 and has held
various finance, administration, and operations positions.
================================================================================
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
All directors have served continuously since their first election or
appointment. 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 13
meetings during 2001. 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, the Audit Committee and the
Compensation Committee. Certain information regarding the function of the
Board's committees, their present membership, and the number of meetings held
by each committee during 2001 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; monitors the
compliance with material policies and laws, including the Company's code of
conduct; considers the other professional services provided by the independent
auditors and whether the provision of such services impairs the independence of
the auditors; and provides a direct channel of communication to the Board of
Directors for the independent accountants and internal auditors. The Board of
Directors of the Company has adopted a written charter for the Audit Committee.
The members of our Audit Committee are David G. Bannister, William P.
Benton, Robert R. Woodson and Thomas E. Boland. Mr. Boland was appointed to the
Audit Committee in March 2002. All members of the Audit Committee are
"independent" as defined by applicable listing standards. During 2001, the
Audit Committee held three meetings.
6
REPORT OF THE AUDIT COMMITTEE
March 22, 2002
To the Board of Directors of Allied Holdings, Inc.:
We have reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2001.
We have discussed with Arthur Andersen LLP the matters required to be discussed
by Statement on Auditing Standards No. 61, Communication with Audit Committees,
as amended, by the Auditing Standards Board of the American Institute of
Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
Arthur Andersen LLP required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with Arthur Andersen LLP the accountants'
independence.
Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2001 for filing with the SEC.
In performing our functions, we act only in an oversight capacity. Our
committee and the Board of Directors recognize that management and the
independent auditors have more resources and time, and more detailed knowledge
and information regarding the Company's accounting, auditing, internal control
and financial reporting practices than does our committee. In its oversight
role, our committee relies on the work and assurances of the Company's
management, which is responsible for the preparation, presentation and
integrity of the Company's financial statements and reports, financial
reporting process and internal controls, and of the independent auditors, who
are responsible for auditing the Company's annual financial statements and, in
their report, express an opinion as to the conformity of such annual financial
statements to generally accepted accounting principles.
A copy of the written charter of the Audit Committee as adopted by the Board of
Directors of the Company is attached to this proxy statement as Appendix A.
The foregoing report has been furnished by the Audit Committee of Allied
Holdings' Board of Directors.
David G. Bannister, Chairman
William P. Benton
Robert R. Woodson
Thomas E. Boland
The foregoing report of the Audit Committee shall not be deemed to be
incorporated by reference in any previous or future documents filed by the
Company with the Securities and Exchange Commission under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates the Report by reference in any such document.
7
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 2001, the
Compensation Committee held 13 meetings.
COMPENSATION OF DIRECTORS
For the year ended December 31, 2001, 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.
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 26, 2002 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(1) Outstanding(2)
--------------------- ---------------------
Robert J. Rutland(3) 1,123,894 13.6
Guy W. Rutland, III(4) 850,718 10.3
Guy W. Rutland, IV(5) 651,936 7.9
A. Mitchell Poole, Jr.(6) 169,514 2.0
Berner F. Wilson, Jr.(7) 121,017 1.5
Hugh E. Sawyer 15,000 *
Jack G. Gross(8) 5,500 *
Daniel H. Popky(9) 53,048 *
Thomas M. Duffy(10) 27,628 *
David G. Bannister(11) 14,333 *
Robert R. Woodson(11) 14,333 *
William P. Benton(11) 12,333 *
Thomas E. Boland 5,000 *
J. Leland Strange -- *
All executive officers and directors as
a group (12) (15 persons) 3,064,753 37.0
- ---------------
* Less than 1% not applicable
8
(1) Under the rules of the Securities and Exchange Commission, a person is
deemed to be a beneficial owner of any securities that such person has
the right to acquire beneficial ownership of within 60 days as well as
any securities owned by such person's spouse, children or relatives
living in the same household.
(2) Based on 8,293,293 shares outstanding as of March 26, 2002. Shares
underlying outstanding stock options or warrants held by the person
indicated and exercisable within 60 days of such date are deemed to be
outstanding for purposes of calculating the percentage owned by such
holder.
(3) Includes 18,099 shares owned by his wife as to which he disclaims
beneficial ownership and 85,050 shares owned by him under the
Restricted Stock Plan. A holder of shares under the Restricted Stock
Plan has the power to vote such shares.
(4) Includes 18,099 shares owned by his wife, 67,800 shares owned by a
private foundation as to which he disclaims beneficial ownership and
8,167 shares owned by him under the Restricted Stock Plan.
(5) Includes 647,211 shares held in a limited partnership of which he is
directly the beneficiary and 4,725 shares owned by him under the
Restricted Stock Plan.
(6) Includes 30,364 shares owned by him under the Restricted Stock Plan.
Mr. Poole is no longer an executive officer or director of the
Company.
(7) Includes 1,996 shares acquired by him under the Restricted Stock Plan.
(8) Includes 5,102 shares owned by him under the Restricted Stock Plan.
(9) Includes 23,363 shares owned by him under the Restricted Stock Plan
and options to acquire 24,466 shares.
(10) Includes 2,732 shares owned by him under the Restricted Stock Plan and
options to acquire 16,666 shares.
(11) Includes options to acquire 8,333 shares for each individual.
(12) Includes 161,499 shares issued under the Restricted Stock Plan and
options to acquire 66,131 shares.
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 26, 2002, 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) 1,077,450 13.0
330 Madison Avenue
New York, New York
J. B. Capital Partners, L.P.(2) 596,300 7.2
23 Berkley Lane
Rye Brook, New York 10573
Dimensional Fund Advisors, Inc.(3) 557,935 6.7
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
9
Alan W. Weber(2) 618,900 7.5
23 Berkley Lane
Rye Brook, New York 10573
Bernard O. De Wulf(4) 525,977 6.3
70 rua Bahia, Higienopolis
Sao Paulo, SP 01244-000
Brazil
(1) According to a Schedule 13G dated February 11, 2002, filed on behalf
of Beck, Mack and Oliver LLC ("BMO"), BMO possesses shared investment
power and no voting power as to the shares.
(2) According to a Schedule 13G dated February 8, 2002, filed on behalf of
J. B. Capital Partners, L.P. ("J.B. Capital") and Allen W. Weber, J.B.
Capital possesses shared voting and investment power as to 596,300
shares, and Mr. Weber possesses sole voting and investment power as to
22,600 shares and shared voting and investment power as to 618,900
shares.
(3) According to a Schedule 13G dated January 30, 2002, filed on behalf of
Dimensional Fund Advisors, Inc. ("Dimensional"), in its role as
investment advisor or manager to certain investment companies, trust
and accounts, Dimensional possesses voting and/or investment power
over the 557,935 shares owned by such investment companies, trust and
accounts. Dimensional disclaims beneficial ownership of such shares.
(4) According to information provided by Mr. De Wulf.
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. From 1997 through 2000, 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 Plan (the "EVA Plan").
The Compensation Committee awarded incentive compensation for the
named executive officers for 2001 utilizing criteria related to the
implementation of the Company's turnaround plan. The Compensation Committee
determined that it would not utilize the Company's EVA Plan which
10
was adopted in 1997, other than for employees of the Company's Axis Group
subsidiary. The Company did not utilize the EVA Plan in 2001 for employees of
the Company other than employees of the Company's Axis Group subsidiary because
the Compensation Committee members did not believe that since the inception of
the EVA Plan in 1997, the Plan's objectives of (i) creating shareholder value
and (ii) rewarding participants when target objectives were achieved and (iii)
sustaining continuous performance improvement, was accomplished for these
employees. The Compensation Committee also believed that the EVA Plan did not
reward near term shareholder value creation and was not the proper method of
linking compensation with the enhancement of shareholder value or the retention
of executive talent because the EVA Plan was not appropriately understood by
all the employees participating in the EVA Plan, local management did not
control the capital or asset deployment which is a critical component and
measure utilized in the EVA Plan, and because incentive compensation should be
based on achievement against the value driver metrics which have been
established by the Company during 2001.
The Compensation Committee determined that incentive compensation for
2001 should be awarded based on performance related to the Company's turnaround
plan which included but was not limited to customer price increases, the
elimination of nonperforming assets and expenses, deleveraging activities,
improved cash management, and execution in the Company's core business units.
The Compensation Committee reviewed factors such as the achievements of the
Company which were directly linked to executive officers' performance against
the revitalization initiatives adopted by the Company during 2001 in
determining the amount of incentive compensation paid to executive officers.
Mr. Sawyer was paid a bonus of $275,000 in 2001 pursuant to the terms
and conditions of the employment agreement entered into by Mr. Sawyer and the
Company. Robert J. Rutland was paid a bonus of $175,000 in 2001 based upon
specific criteria utilized by the Committee, including criteria relating to the
performance of Mr. Rutland as the Chief Executive Officer in addition to his
position as Chairman for the period February 2001 through June 2001.
Mr. Gross, the president of the Company's Axis Group subsidiary, was
paid a bonus of $219,553 in 2001, with such bonus calculated in accordance with
the terms and conditions of the EVA Plan. The Compensation Committee determined
that it would utilize the EVA Plan solely in respect to the Company's Axis
Group subsidiary in 2001 because utilization of the EVA Plan by the Axis Group
since 1997 had appropriately linked compensation with the enhancement of
shareholder value and the retention of executive talent.
Messrs. Popky and Duffy were each paid a bonus in the amount of
$150,000 in 2001, $125,000 of which was paid pursuant to the terms and
conditions of the employment agreements by and between Messrs. Popky and Duffy
and the Company respectively. Messrs. Popky and Duffy were required to be
employees of the Company on January 1, 2002 in order to be paid these bonus
amounts. The additional bonus paid to Messrs. Popky and Duffy was made based
upon criteria utilized by the Committee as defined by the Company's turnaround
initiatives.
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 appropriate given the need of the Company to
attract and retain qualified executives, and are competitive with those paid to
executives of other leading companies engaged in the transportation, logistics
and trucking industries.
11
Stock Compensation. Executive officers are eligible to receive annual
grants of incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, performance units and performance shares
under the Company's Long Term Incentive Plan (the "LTI Plan"). During 2001, the
Compensation Committee awarded stock options to various officers, including the
named executive officers, pursuant to the LTI Plan. The Company did not award
shares of restricted stock in 2001. 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
Hugh E. Sawyer's compensation as Chief Executive Officer for the year ended
December 31, 2001 was appropriately related to short and long term performance
of the Company. Mr. Sawyer's base salary in 2001 was $555,000 as provided by
his employment agreement and was prorated based on his tenure in the role. Mr.
Sawyer was paid a bonus for the year ended December 31, 2001 of $275,000
pursuant to the terms of his employment agreement. The Compensation Committee
believes that the base salary and benefits provided by Mr. Sawyer's employment
agreement provide for appropriate compensation to Mr. Sawyer in light of the
Company's goal of attracting and retaining a qualified chief executive, and
considers the compensation received by Mr. Sawyer for 2001 to have been
comparable to chief executive officers of other leading companies engaged in
the transportation and trucking industries or revitalization efforts.
The Compensation Committee believes that the compensation paid to
Robert J. Rutland from the period of February 2001 through June 2001, provided
appropriate compensation to Mr. Rutland in light of the Company's goal of
attracting and retaining a qualified chief executive, and based upon his duties
and performance during such period. In addition, the Compensation Committee
believes that the compensation paid to A. Mitchell Poole, Jr. in his capacity
as Chief Executive Officer in January of 2001, as provided by his employment
agreement, was appropriate.
William P. Benton, Chairman
David G. Bannister
Robert R. Woodson
12
EXECUTIVE COMPENSATION TABLE
Remuneration paid in 2001, 2000 and 1999 to the following named executive
officers and the principal positions of such individuals at December 31, 2001
is set forth on the following table:
LONG-TERM COMPENSATION
Securities
Restricted Underlying
Name and Other Annual Stock Options/SAR All Other
Principal Position Year Salary(1) Bonus Compensation(2) Awards(3) Awards(4) Compensation(5)
- ------------------ ---- --------- --------- --------------- ---------- ----------- ---------------
Robert J. Rutland(6) 2001 $ 402,128 $ 175,000 $ 59,931 -- $ 72,148
Chairman and Chief 2000 403,400 -- 164,342 $ 152,603 -- 155,996
Executive Officer 1999 521,000 -- 38,217 323,495 -- 127,077
Hugh E. Sawyer(7) 2001 287,337 275,000 -- -- 500,000 360,197
President and Chief 2000 106,458 -- -- -- -- 4,429
Executive Officer 1999 -- -- -- -- -- --
Jack G. Gross(8) 2001 269,696 214,553 -- -- -- --
President, 2000 155,328 145,241 54,113 8,881 -- 8,881
Axis Group, Inc. 1999 -- -- -- -- -- --
Daniel H. Popky 2001 260,411 150,000 7,954 -- 50,000 6,021
Senior Vice President and 2000 237,790 -- 124,711 57,733 -- 17,068
Chief Financial Officer 1999 215,588 -- -- 45,942 25,000 19,247
Thomas M. Duffy 2001 235,894 150,000 7,353 -- 50,000 --
Senior Vice President, 2000 207,738 -- 27,531 14,442 -- 15,509
General Counsel, 1999 167,894 -- -- 10,130 25,000 11,894
Secretary
A. Mitchell Poole, Jr.(9) 2001 138,882 -- 14,303 -- -- 83,101
Vice Chairman and Chief 2000 502,550 -- 190,499 203,476 -- 55,615
Executive Officer 1999 416,800 -- 28,221 181,154 -- 54,700
(1) For 2000 and 1999, 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.
(3) Represents the dollar value on the date of grant. No restricted stock
awards were granted in 2001. The shares granted in 2000 are as
follows: 21,418 to Mr. Rutland, 5,012 to Mr. Gross, 8,103 to Mr.
Popky, 2,027 to Mr. Duffy, and 28,558 to Mr. Poole. The shares granted
in 1999 are as follows: 22,504 to Mr. Rutland, 3,196 to Mr. Popky, 705
to Mr. Duffy, and 12,602 to Mr. Poole.
(4) For Mr. Sawyer, represents 500,000 shares subject to options. For Mr.
Popky, represents 50,000 shares subject to options granted in 2001 and
25,000 shares subject to options granted in 1999. For Mr. Duffy,
represents 50,000 shares subject to options granted in 2002 and 25,000
shares subject to options granted in 1999.
(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
13
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 2001 as a result of payments made pursuant
to the split dollar agreements is: $19,168 for Mr. Rutland; $677 for
Mr. Sawyer; $311 for Mr. Popky; and $4,389 for Mr. Poole. For Mr.
Sawyer, also includes for 2001 $125,000 to reimburse him for amounts
paid by him related to the early termination of his employment
agreement with his former employer, $75,000 to reimburse him for
certain expenses incurred in relocating to Atlanta, GA and $157,142 to
reimburse him for income tax liabilities incurred due to such
payments.
(6) Mr. Rutland served as Chief Executive Officer from February 2001
through June 2001.
(7) For 2001, represents salary paid by the Company commencing June 18,
2001. For 2000, represents salary paid by the Company from January
through April.
(8) For 2000, represents salary paid by the Company commencing in May
2000.
(9) Mr. Poole was removed as Vice Chairman and Chief Executive Officer in
February 2001.
The following table sets forth information regarding the grant of stock options
to each of the named executive officers during 2001 and the value of such
options held by each such person as of December 31, 2001.
OPTION GRANTS FOR LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of Stock
INDIVIDUAL GRANTS Price Appreciation for Option
----------------- Term (10 Years)*
% of Total -----------------------------
Number of Options 5% 10%
Securities Granted to Exercise ---------- ------------
Underlying Employees in Price Expiration Aggregate Aggregate
Name Options (1) Fiscal Year ($/Share)(1) Date Value Value
---- ----------- ------------ ------------ --------- ---------- -----------
Robert J. Rutland -- -- -- -- -- --
Hugh E. Sawyer 500,000 58.8 $2.68 6/18/11 $ 845,000 $ 2,135,000
Jack G. Gross -- -- -- -- -- --
Daniel H. Popky 50,000 5.9 $2.77 6/01/11 $ 87,000 $ 220,500
Thomas M. Duffy 50,000 5.9 $2.77 6/01/11 $ 87,000 $ 220,500
A. Mitchell Poole -- -- -- -- -- --
* The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates from the closing price of the Company's Common Stock
on the date of grant, as prescribed by the Securities and Exchange
Commission, and are not intended to forecast future price appreciation of
the Common Stock.
14
(1) For Mr. Sawyer, represents 500,000 shares subject to an option granted
in 2001. Mr. Sawyer's option vests over two years at a rate of 50% per
year. Represents 50,000 shares subject to options granted to each of
Messrs. Popky and Duffy in 2001, which vest over two years at a rate
of 50% per year.
The following table sets forth as to each of the named executive
officers (i) the number of shares of Common Stock acquired pursuant to options
exercised and the number of shares underlying stock appreciation rights
exercised during 2001, (ii) the aggregate dollar value realized upon the
exercise of such options and stock appreciation rights, (iii) the total number
of shares underlying exercisable and non-exercisable stock options and stock
appreciation rights held on December 31, 2001 and (iv) the aggregate dollar
value of in-the-money unexercised options and stock appreciation rights on
December 31, 2001.
AGGREGATED OPTION/SAR EXERCISES DURING LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Number of Number of Shares Underlying Value of Unexercised
Shares Acquired Unexercised Options/SARs In-the-Money Options/SARs at
Upon Value at Fiscal Year End Fiscal Year End(1)
Exercise of Realized Upon ---------------------------- ----------------------------
Name Option Exercise Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------------- ----------- ------------- ----------- -------------
Robert J. Rutland -- -- --/3,938 --/-- --/-- --/--
Hugh E. Sawyer -- -- --/-- 500,000/-- --/-- --/--
Jack G. Gross -- -- --/-- --/-- --/-- --/--
Daniel H. Popky -- -- 24,466/1,035 58,334/-- --/-- --/--
Thomas M. Duffy -- -- 16,666/1,035 58,334/-- --/-- --/--
A. Mitchell Poole, Jr. -- -- --/-- 500,000/-- --/-- --/--
(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 $2.02, the closing price of
the Common Stock price reported on The New York Stock Exchange on
December 31, 2001. No value is assigned to the options or stock
appreciation rights because the exercise price for the options and
stock appreciation rights is in excess of the fair market value of the
underlying Common Stock on December 31, 2001.
EMPLOYMENT AND SEVERANCE AGREEMENTS
Robert Rutland entered into an employment agreement with the Company
for a five year term ending in February 2005. Mr. Sawyer entered into an
employment agreement with the Company for a five year term ending in June 2006.
Messrs. Gross, Popky, and Duffy entered into employment agreements with the
Company each for a one year term ending in December 2002. 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
15
such amount established by the Compensation Committee, and participation in
Company bonus plans.
Each of the employment agreements also provides that the officers will
receive severance benefits if: (i) the officer's employment is terminated due
to death or disability; (ii) 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, (iii) 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, (iv) 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,
(v) 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 by the Company or the officer 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.
In addition, Mr. Sawyer's employment agreement provides for severance
benefits if there is any material change by the Company to Mr. Sawyer's
compensation other than as contemplated by the agreement, the Company fails to
comply with its obligations in respect of payment of salary and bonus to Mr.
Sawyer or Mr. Sawyer terminates his employment as a result of the failure of
the Board of Directors to re-nominate Mr. Sawyer as a candidate for director or
to appoint, elect or re-elect Mr. Sawyer as Chairman of the Board after Mr.
Rutland ceases holding such office.
The severance benefits payable with respect to each of Messrs.
Rutland, Sawyer, Gross, Popky and Duffy include a cash payment equal to three
times each of (i) his annual base salary for the year such termination occurs,
plus (ii) his "bonus". For purposes of the preceding sentence, the term "bonus"
includes, with respect to Messrs. Rutland, Gross, Popky and Duffy, an amount
equal to (A) the greatest of (1) the average of each of the previous two (2)
years' bonus payments under the Incentive Plan or other form of bonus plan, (2)
the average of each of the previous two (2) years' "target bonus" amounts under
the Incentive Plan or other form of bonus plan or (3) the amount of the "target
bonus" for Messrs. Rutland, Gross, Popky and Duffy under the Incentive Plan or
other form of bonus plan for the year in which their respective employment with
the Company is terminated, plus (B) an amount equal to the dollar value of the
restricted stock target or other form of equity award for each of them with
respect to the most recent annual award of restricted stock or other equity
award made under the LTI Plan. For Mr. Sawyer the term "bonus" includes an
amount equal to (A) the greatest of the annual bonus actually paid to Mr.
Sawyer in the preceding year, (2) the average of each of the previous two (2)
years' annual bonus payments to Mr. Sawyer, or (3) if the termination follows
following a "change of control," the target amount of his annual bonus for the
year in which such termination occurs, plus (B) an amount equal to the dollar
value of the restricted stock target for him with respect to the most recent
annual award of restricted stock made under the LTI Plan. If Mr. Rutland is
terminated other than pursuant to a "change of control" and there are more than
three years remaining on the term of his employment agreement, he will be
entitled to receive an amount equal to the number of years or partial years
remaining on his employment agreement times each of the above items.
If Mr. Sawyer is terminated other than
16
pursuant to a "change of control" or a failure of the Board of Directors to
nominate him for election to the Board or to elect him as Chairman of the
Board.
A "change of control" under the employment agreements of Messrs.
Rutland, Sawyer, Gross, Popky and Duffy 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.
The employment agreement between the Company and Mr. Poole was
terminated in April 2001. Pursuant to the termination of employment of Mr.
Poole, the Company agreed to pay Mr. Poole $510,200, over a 24 month period
beginning in April, 2001, and to cover the cost of Mr. Poole's health insurance
coverage under COBRA until the earlier of 12 months or until he obtains
coverage through a subsequent employer.
The maximum severance benefits that would have been due upon
termination meeting the criteria for severance compensation under the
employment agreements effective March 1, 2002 are approximately: $2,153,550 to
Mr. Rutland, $3,300,000 to Mr. Sawyer, and $1,402,500 to Mr. Gross, $1,320,000
to Mr. Popky and $1,200,000 to Mr. Duffy. The Company is also required to
provide to Messrs. Rutland, Sawyer, Gross, Popky and Duffy medical and
hospitalization benefits and other benefits for defined periods following
termination triggering severance benefits.
LONG-TERM INCENTIVE PLAN
The Company's LTI Plan allows for the issuance of an aggregate of
1,500,000 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 and directors, including each of the executive officers named herein,
as determined by the LTI Plan. The LTI Plan was adopted and approved by the
Board of Directors and shareholders in July 1993 and was amended in 2000 and
amended and restated in 2001. On March 12, 2002, the Board of Directors
approved an amendment to the LTI Plan to increase the number of shares that may
be issued thereunder to 2,000,000 shares, which amendment will be submitted to
the shareholders for approval at the annual meeting.
The Compensation Committee selects those employees to whom awards are
granted under the LTI Plan and determines the number of stock options,
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.
17
Nonqualified Stock Options
The Board of Directors may grant non-qualified stock options under the
LTI Plan. The Company granted non-qualified stock options to acquire an
aggregate of 495,374 shares during 2001. These options become exercisable (i)
after one year in 33% increments per year and expire ten years from the date of
the grant as to 70,000 shares and (ii) after one year in 50% increments per
year and expire ten years from the date of grant as to 425,374 shares.
Non-qualified options to acquire 113,632 shares of Common Stock pursuant to the
Plan were exercisable at December 31, 2001.
Restricted Stock Awards
Effective December 19, 1996, the Board of Directors of 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. The Company did not grant any shares
under the Restricted Stock Plan in 2001.
Incentive Stock Options
During 2001, the Company granted incentive stock options to purchase
354,626 shares. These options become exercisable (i) after one year in 33%
increments per year, and expire 10 years from the date of grant as to 180,000
shares, and (ii) after one year in 50% increments per year and expire 10 years
from the date of grant as to 174,626 shares. Options which are granted pursuant
to the incentive stock option provisions of the LTI Plan are intended to
qualify as incentive stock options within the meaning of the Internal Revenue
Code of 1986, as amended (the "Code"). Options to acquire 33,332 shares of
Common Stock pursuant to the LTI Plan were exercisable at December 31, 2001.
Stock Appreciation Rights
The Board of Directors of the Company adopted the SAR Plan pursuant to
the terms of the LTI Plan effective January 1, 1997. The purpose of the SAR
Plan is to provide incentive compensation to certain management employees of
the Company. Such incentive 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. The Company did not grant SAR's in 2001. The SAR
awards vest over 3 years and may be exercised only during the fourth year. The
exercise price increases 6% per year.
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.
18
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 34,000 51,000 68,000 85,000 85,000 85,000
200,000 34,000 51,000 68,000 85,000 85,000 85,000
225,000 34,000 51,000 68,000 85,000 85,000 85,000
250,000 34,000 51,000 68,000 85,000 85,000 85,000
275,000 34,000 51,000 68,000 85,000 85,000 85,000
300,000 34,000 51,000 68,000 85,000 85,000 85,000
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
Code Sections 125, 402(a)(8), or 402(h). However, compensation in excess of
Code Section 401(a)(17) limit shall not be included. The limit under the Plan
for 2001 is $170,000.
The compensation covered by the Retirement Plan for each of Messrs.
Rutland, Sawyer, Gross, Popky, Duffy and Poole is $170,000.
The estimated years of credited service for each of the named
executive officers as of December 31, 2001 is as follows:
Years of Credited Service
Name as of December 31, 2001
---- -------------------------
Robert J. Rutland 37.7
Hugh E. Sawyer 0.6
Jack G. Gross 1.7
Daniel H. Popky 7.0
Thomas M. Duffy 3.6
A. Mitchell Poole, Jr. 13.7
The benefits shown in the Pension Plan Table are payable in the form
of a straight line annuity commencing at age 65. There is no reduction for
social security benefits or other offset amounts.
19
The Company amended the Retirement Plan effective April 30, 2002 in
order to freeze the Retirement Plan. As a result of this amendment to the
Retirement Plan, commencing April 30, 2002 participants do not accrue credit
towards years of service, participants do not accrue credit for pay increases
received, and new employees may not become participants in the Retirement Plan.
However, vesting does continue to accrue after April 30, 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
David G. Bannister, William P. Benton and Robert R. Woodson served as
members of the Compensation Committee during the year ended December 31, 2001.
None of the members of the Compensation Committee has served as an officer 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.
20
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, 1996 through and including December 31, 2001. 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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG ALLIED HOLDINGS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NADAQ TRUCKING & TRANSPORTATION INDEX
(PERFORMANCE GRAPH)
<Table>
<Caption>
CUMULATIVE TOTAL RETURN
--------------------------------------------------------------------------------------
12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99
ALLIED HOLDINGS, INC.................... 100.00 84.38 139.06 268.75 239.06 250.00 263.28 168.75 179.69 119.53
NASDAQ STOCK MARKET (U.S.).............. 100.00 94.57 111.90 130.82 122.48 143.34 147.28 132.89 172.68 193.65
NASDAQ TRUCKING & TRANSPORTATION........ 100.00 98.49 112.75 132.65 128.15 145.29 136.77 99.24 115.79 114.35
<Caption>
CUMULATIVE TOTAL RETURN
---------------------------------------------------------------------------------------
6/99 9/99 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01
ALLIED HOLDINGS, INC.................... 101.56 75.78 76.56 74.23 75.00 68.75 34.38 33.75 31.88 15.00
NASDAQ STOCK MARKET (U.S.).............. 211.83 217.11 320.89 360.25 313.24 288.25 193.01 144.08 169.81 117.81
NASDAQ TRUCKING & TRANSPORTATION........ 139.73 113.26 111.53 128.26 106.53 97.90 101.38 98.38 119.53 92.56
<Caption>
CUMULATIVE
TOTAL RETURN
------------
12/01
ALLIED HOLDINGS, INC.................... 25.25
NASDAQ STOCK MARKET (U.S.).............. 153.15
NASDAQ TRUCKING & TRANSPORTATION........ 119.99
</Table>
21
2. APPROVAL OF AN AMENDMENT TO INCREASE THE SHARES SUBJECT
TO THE AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
The shareholders are being asked to vote on a proposal to approve an
amendment to increase the number of authorized shares of Common Stock which may
be issued under the LTI Plan by an additional 500,000 shares, bringing the
total number of shares of Common Stock issuable under the LTI Plan to
2,000,000. The LTI Plan, which was adopted by the Company in 1993, 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 950 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 currently provides that 1,500,000 shares of the Common
Stock of the Company may be issued pursuant to the various components of the
LTI Plan, 300,000 of which have been set aside under the Company's
Non-Qualified Stock Option Plan. On March 12, 2002, the Board of Directors
approved an amendment to the LTI Plan to increase the number of shares issuable
thereunder to 2,000,000. As of March 26, 2002, the Company had issued options
and other grants providing the recipients with the right to acquire 1,381,622
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 500,000 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 6.0% of the Common Stock issued and
outstanding as of March 26, 2002. 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 and restated form of the LTI Plan in 2001.
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
non-qualified 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 of Directors 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 participants who will be granted options and
other awards under the LTI Plan;
- determine the terms and conditions of each participant's
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;
22
- 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.
ELIGIBILITY. All officers or other key employees of the Company or its
subsidiaries who are designated by the Committee are eligible to participate in
the LTI Plan. Directors who are not employees are also entitled to participate
in the LTI Plan.
LIMITATIONS ON TRANSFER. No option or 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.
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
or any option or award thereunder may in any manner adversely affect the rights
of any participant without the consent of the participant or alter the LTI Plan
provisions triggered by a "change in control" discussed below. 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; or
- affect any other change that requires the approval of the
shareholders under applicable law or regulation.
Unless terminated sooner by action of the Board of Directors, the LTI
Plan shall terminate on the tenth (10th) anniversary of the date of its
adoption in July 1993. Options and awards outstanding upon termination of the
plan shall continue in effect in accordance with their terms.
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
by the Committee 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
in the Company's shares.
CHANGE IN CONTROL. If a "change in control" occurs as determined under
the LTI Plan, the following will occur with respect to all awards outstanding
under the LTI Plan:
- Participants shall receive a prorata portion of the cash that
would have been payable pursuant to any performance awards
during the applicable performance period as if the
performance goals were achieved and shall receive cash
payments equal to their account balances in the performance
sharing bank established pursuant to the LTI Plan;
- Any performance goals to which performance shares are subject
will be deemed satisfied and all performance shares shall
convert to restricted stock;
- All restrictions on any shares of restricted stock, including
restricted shares attributable to performance shares, shall
immediately lapse and all such shares shall immediately vest;
- All other awards (including options and stock appreciation
rights) granted under the LTI Plan will become immediately
exercisable or vested, and options may be surrendered to
23
the Company in exchange for a cash payment equal to the
excess of the value of the share subject to the option over
the exercise price; and
- In the event a participant may be subject to liability under
Section 16(b) of the Securities Exchange Act of 1934, as
amended, for options or awards granted less than 6 months
prior to a change in control, the participant's options may
be surrendered and his or her awards exercised during the 60
day period after the date that is 6 months from the date of
grant.
For purposes of the LTI Plan, a "change in control" refers to the
acquisition by any person of beneficial ownership of 20% or more of the
Company's outstanding voting securities, a change in composition of two-thirds
of the Board of Directors without a vote of the incumbent board, shareholder
approval of a merger or consolidation following which the Company's
shareholders do not own more than 70% of the combined entity, or the
liquidation or dissolution of the Company.
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 do
not qualify as incentive stock options are non-qualified 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 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.
Exercise. 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. No option is exercisable more than ten (10) years
after the date of grant (or five (5) years in the case of an incentive stock
option granted to a holder of 10% or more of the Company's voting stock). Each
option becomes exercisable in such installments and in such times as may be
designated by the Committee and set forth in the applicable agreement. The
exercise price is payable at the Committee's discretion as follows:
- in cash;
- by check;
- in shares of common stock of the same class of stock that is
being purchased; or
- by a combination of cash and stock.
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 delivered to the recipient upon the lapse of the restrictions.
During the period of restriction, the beneficial owner of the restricted shares
cannot transfer those shares. The Committee may determine the right of
beneficial owner to vote his restricted shares and to retain cash dividends
that may be paid on such shares during the time of the restriction.
PERFORMANCE AWARDS. A performance award is a right granted to an
employee to receive cash or restricted shares of Common Stock of the Company.
24
This compensation is based on the satisfaction of performance goals during the
applicable performance period. The Committee determines the performance period
and performance goals. 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, subject to shareholder ratification, any other standard
deemed appropriate by the Committee. These performance goals may be different
for individual participants and 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.
Performance Shares. The Committee may grant awards of performance
shares, which shall be payable as restricted shares if the performance goals
for the applicable performance period are satisfied. The Committee may also
provide for partial payment of performance shares if such goals are not
satisfied. Generally, to be entitled to receive performance shares, an employee
must remain in the employment of the Company or its subsidiaries through the
end of the performance period. Performance shares which become restricted
shares pursuant to completion or partial completion of a performance goal are
subject to all rules of the LTI Plan for restricted shares. Agreements
evidencing awards of performance shares may contain other restrictions and
conditions determined by the Committee based on terms and conditions in
addition to satisfaction of the performance goals.
Cash Award. The Committee may also grant cash awards payable from a
performance sharing bank (i.e., a record of account maintained by the Company)
if the performance goals for the applicable performance period are satisfied.
The Committee may also provide for partial payment of cash award if such
performance goals are not satisfied. After the end of a performance period, a
cash award is added to the account of an employee in the performance sharing
bank if the specific performance goals have been satisfied. In addition, as
soon as administratively practicable after the last day of each performance
period, the Company shall pay in cash to the employee one-third of the
employee's account in the performance sharing bank, regardless of whether the
performance goals for the current period are satisfied. The Committee may
establish the terms and conditions applicable to a grant of cash awards upon
the termination of the employee's employment. If a participant's employment is
terminated during a performance period involuntarily without cause, or due to
death or disability, and a cash award would have been paid to the participants
account if such employee had remained employed throughout the entire
performance period, then the Company shall credit such employee's account equal
to the amount which would have been credited had such employee been employed
for the entire performance period, prorated to reflect the number of days
actually employed. In no event shall an employee's combined vested restricted
shares resulting from performance share awards and cash awards payable from the
performance sharing bank for any calendar year exceed $1 million dollars and
any excess amount shall be carried forward to the next calendar year for
payment.
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. In no event may a SAR that is unrelated to a stock option have a
term greater than ten (10) years, and all SAR's granted in tandem with an
option will have a term equal to that of the option. 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
25
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
1,500,000. The amendment would increase this amount to 2,000,000 shares, and
291,522 shares have been issued under the LTI Plan as of December 31, 2001 and
are included in the number of shares outstanding. There were 1,020,300 options
outstanding and 188,178 shares were available for issuance under the LTI Plan
at December 31, 2001. The total number of shares of Common Stock issuable
pursuant to options outstanding at December 31 2001, together with the number
of shares of Common Stock issuable pursuant to options available for future
grant, including the proposed amendment, would equal 20.6% of the Company's
outstanding Common Stock as of March 26, 2002.
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 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.
26
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.
27
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.
ESTIMATED BENEFITS
The following table illustrates estimated benefits under the LTI Plan.
Awards under the LTI Plan are discretionary and are based on a variety of
factors. 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 during 2001 to certain individuals.
ESTIMATED BENEFITS
LTI PLAN
-----------------------------------
NAME AND POSITION NUMBER OF SHARES EXERCISE PRICE
- ----------------- ---------------- --------------
Robert J. Rutland ................................ -- --
Hugh E. Sawyer ................................... 500,000 $2.68
John G. Gross .................................... -- --
Daniel H. Popky .................................. 50,000 2.77
Thomas M. Duffy .................................. 50,000 2.77
A. Mitchell Poole, Jr ............................ -- --
Executive Group(1) ............................... 780,000 (2)
Non-Executive Group(2) ........................... 70,000 (2)
Non-Executive Officer Employee Group ............. -- --
(1) Includes 160,000 awarded to executive officers not listed above.
(2) Exercise prices range from $1.80 to $2.35 per share.
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 500,000 SHARES.
28
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as independent public accountants of the
Company from 1980 through 2001. On April 2, 2002, the Company dismissed Arthur
Andersen LLP pursuant to the direction of the Company's Audit Committee and
Board of Directors. The Company has been advised by Arthur Andersen LLP 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.
The Board of Directors of the Company, upon the recommendation of the
Audit Committee, has appointed the firm of KPMG LLP to serve as independent
public accountants of the Company for the fiscal year ending December 31, 2002.
KPMG LLP is considered by the Company to be well qualified. KPMG LLP was
appointed effective as of April 2, 2002.
Arthur Andersen's reports on the Company's consolidated financial
statements for each of the years December 31, 2001 and 2000 did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope or accounting principles, which disagreements,
if not resolved to Arthur Andersen's satisfaction, would have caused Arthur
Andersen to make reference to the subject matter of the disagreement in
connection with its reports.
None of the reportable events described under Item 304(a)(1)(v)
of Regulation S-K occurred within the two most recent fiscal years of the
Company ended December 31, 2001, or during any subsequent interim period
through April 2, 2002 (the date the Company filed a Current Report on
Form 8-K disclosing its decision to no longer engage Arthur Andersen).
During the Company's two most recent fiscal years ended December 31,
2001 and through April 2, 2002, the Company did not consult with KPMG LLP with
respect to the application of accounting principles to a specified transaction
or regarding any of the other matters or events set forth in Item 304(a)(2)(i)
and (ii) of Regulation S-K.
Representatives of KPMG LLP and Arthur Andersen LLP are expected to be
present at the annual meeting, will have an opportunity to make a statement if
they desire, and will be available to respond to questions. Approval of the
Company's accounting firm is not a matter required to be submitted to the
shareholders.
The Board of Directors, in its sole discretion, may direct the
appointment of new independent public accountants at any time during the 2002
fiscal year if the Board of Directors believes that such a change would be in
the best interests of the Company.
AUDIT FEES
The aggregate fees billed by Arthur Andersen LLP for professional
services rendered for the audit of the Company's annual financial statements
for fiscal year 2001 and the reviews of the financial statements included in
the Company's Form 10-Q for such fiscal year were $263,500.
ALL OTHER FEES
The aggregate fees billed by Arthur Andersen LLP for professional
services rendered other than as stated under the caption "Audit Fees" above
were $847,609. The Audit Committee considers
29
the provision of these services, primarily income tax compliance and consulting
and internal audit services, to be compatible with maintaining the independence
of Arthur Andersen LLP.
The Company expects representatives of KPMG LLP and Arthur Andersen
LLP to be present at the Annual Meeting with the opportunity to make a
statement and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
The 2003 Annual Meeting of Shareholders is anticipated to be held in
May 2003. Under the Company's Bylaws, any nominations for the Board of
Directors and any proposal that a shareholder intends to present at the 2003
Annual Meeting must be received at 160 Clairemont Avenue, Suite 200, Decatur,
Georgia 30030 addressed to the attention of Hugh E. Sawyer, President and Chief
Executive Officer, not later than 60 days prior to the scheduled date of the
2003 Annual Meeting; provided, that if notice or prior public disclosure of the
scheduled date of the 2003 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 information regarding the nominee
and the person nominating as required by the Company's Bylaws.
Under the Securities and Exchange Commission's Rule 14a-8, in order
for any shareholder proposal to be considered for inclusion in the Company's
proxy statement and form of proxy for the 2003 Annual Meeting, it must be
received at the Company's principal executive offices on or prior to January
22, 2003. However, if the 2003 Annual Meeting is held on a date more than 30
days before or after May 22, 2003, any shareholder who wishes to have a
proposal included in the Company's proxy statement for such meeting must submit
the proposal to the Company within a reasonable period of time before the
Company begins to print and mail its proxy materials.
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 and written
representations furnished to the Company, the Company believes that during the
2001 fiscal year its officers, directors and 10% shareholders complied with all
applicable filing requirements.
30
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, no director or officer has a substantial interest in any
matter to be acted upon.
Management of the Company urges you to promptly complete the proxy
whether or not you expect to be present at the meeting. You may complete the
proxy by (i) signing and returning the enclosed proxy in the envelope provided,
(ii) voting by telephone using the telephone number on the proxy, or (iii)
voting by internet using the website on the proxy. 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
2001 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS), INCLUDING FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, 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.
31
APPENDIX A
ALLIED HOLDINGS, INC.
AUDIT COMMITTEE CHARTER
MISSION
The primary functions of the Audit Committee are to recommend the appointment
of the independent accountants and review with them their report on the
financial reports of the corporation; to review the adequacy of the system of
internal controls and compliance with material policies and laws, including the
company's code of conduct; and to provide a direct channel of communication to
the board for the independent accountants and internal auditors and, when
needed, finance officers and general counsel.
MEMBERSHIP AND STRUCTURE
- The Audit Committee shall consist of not less than three
independent directors, free from any relationship that would
interfere with the exercise of his/her independent judgement.
Disclosure will be made in the proxy statement that the Audit
Committee members are independent.
- Each of the members of the Audit Committee should be
financially literate and at least one member must have
accounting expertise.
- One member of the Committee shall be appointed as chair. The
chair shall be responsible for leadership of the Committee,
including scheduling and presiding over meetings, preparing
agendas, and making regular reports to the Board. The chair
will also maintain regular liaison with the Chief Executive
Officer, Chief Financial Officer, the General Counsel of the
Company, the lead independent audit partner and the director
of Internal Audit.
- The Audit Committee shall meet at least two times each year.
In addition, the Audit Committee, or at least its Chairperson
shall communicate with management and the independent
auditors quarterly to review the company's financial
statements and significant findings based on the auditor's
limited review procedures, before the company files quarterly
reports with the Securities and Exchange Commission (the
"Commission").
DUTIES AND RESPONSIBILITIES
- Recommend the external auditing firm for appointment by the
board. The Board of Directors and Audit Committee have the
authority and responsibility to select, evaluate and replace
the independent auditor. The outside auditor is ultimately
accountable to the Board
32
of Directors and the Audit Committee of the company.
- Review the independence of the external auditing firm
including the scope of other professional services performed,
or to be performed, by the external auditing firm, and
consider the possible effect that these services could have
on the independence of such accountant. The Audit Committee
is responsible for ensuring that the outside auditor
periodically submits to the Audit Committee a formal written
statement delineating all relationships between the auditor
and the corporation, for actively engaging in dialogue with
the auditor with respect to any disclosed relationships or
services that may impact the objectivity and independence of
the outside auditor, and for recommending that the Board of
Directors take appropriate action in response to the outside
auditor's report to satisfy itself of the auditor's
independence.
- Discuss with the external auditor the results of its audits,
including the auditor's judgment about the quality, and not
just the acceptability under Generally Accepted Accounting
Principles, of the company's accounting principles as applied
in its financial reporting.
- Review with management and the external auditor all
significant issues concerning litigation, contingencies,
claims, or assessments and all material accounting issues
that require disclosure in the financial statements. This
review includes a discussion of recent FASB or other
regulatory agency pronouncements that have a material impact
on the organization.
- Discuss with the Company's general counsel any legal matters
that may have a material impact on the Company's financial
statements, and any material reports or inquiries from
regulatory or governmental agencies.
- Review management's evaluation of the adequacy of the
Company's internal control structure and the extent to which
major recommendations made by the external auditors and the
internal auditors have been implemented.
- Review the services provided by the internal auditing
functions, including:
- The planned scope for the internal audit program,
its objectives, and the staff required to attain
these objectives.
- The report which details the activities of the
internal auditing department of the preceding
period.
- The working relationship between the internal
auditing department and external auditors.
- Annual approval of the Internal Audit Charter.
- Monitor compliance with the Company's Code of Conduct.
- Direct and supervise an investigation into any matter as
deemed necessary to discharge its duties and
responsibilities.
- Provide a report of Audit Committee activities to the board
at regular intervals.
- Review the Audit Committee charter annually and recommend
modifications to the board as needed. This charter will be
approved by the Board of Directors. Disclosure will be made
in the company's proxy statement for its annual meeting of
shareholders that the Audit
33
Committee has adopted the charter. Every three years the
charter will be disclosed in the proxy statement.
- The Audit Committee will draft a letter annually to be
included in the company's proxy statement stating whether the
Audit Committee has:
1) Reviewed and discussed the audited financial statements with
management.
2) Discussed with the independent auditors the matters required
to be discussed by statement on Auditing Standards No. 61.
3) Received from the auditors and reviewed a formal written
statement regarding the auditor's independence required by
Independence Standards No. 1, and discussed with the auditors
their independence.
4) Recommended to the Board of Directors that the audited
financial statements be included in the company's Annual
Report on Form 10K for the last fiscal year for filing with
the Commission.
OTHER
- - In discharging its oversight role, the Committee is empowered to
investigate any matter relating to the Company's accounting, auditing,
internal control or financial reporting practices brought to its
attention, with full access to all Company books, records, facilities
and personnel. The Committee may retain outside counsel, auditors or
other advisors.
- - The Committee's job is one of oversight. Management is responsible for
the preparation of the Company's financial statements and the
independent auditors are responsible for auditing those financial
statements. The Committee and the Board recognize that management
(including the internal audit staff) and the independent auditors have
more resources and time, and more detailed knowledge and information
regarding the Company's accounting, auditing, internal control and
financial reporting practices than the Committee does; accordingly the
Committee's oversight role does not provide any expert or special
assurance as to the financial statements and other financial
information provided by the Company to its shareholders and others.
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 22, 2002 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 Hugh E. Sawyer, and each 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, THE PROXY WILL BE VOTED FOR EACH NOMINEE
LISTED IN PROPOSAL NUMBER 1, FOR PROPOSAL NUMBER 2 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 SUBMITTING 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
- ----------- -----------
ALLIED HOLDINGS, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
VOTE BY TELEPHONE
- -----------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683).
3. Enter your Voter Control Number located on your Proxy Card above your name.
4. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE anytime!
VOTE BY INTERNET
- ----------------
It's fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the Website http://www.eproxyvote.com/ahi
3. Enter your Voter Control Number located on your Proxy Card above your name.
4. Follow the recorded instructions.
Your vote is important!
Go to http://www.eproxyvote.com/ahi anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE ZALHC1
Please Mark
[X] votes as in
this example.
1. Election of Directors.
For Three-Year Terms Expiring Annual Meeting 2005:
Nominees: (01) Guy W. Rutland, III, (02) Robert R. Woodson and
(03) J. Leland Strange.
<Table>
FOR ALL WITHHELD
NOMINEES, [ ] [ ] FROM
except as ALL
indicated below NOMINEES
</Table>
<Table>
MARK HERE
FOR ADDRESS
[ ] [ ] CHANGE AND
-------------------------------------------------- NOTE BELOW
Instructions: To withhold authority to vote for any
individual nominee(s) write that nominee's name on
the space provided above.
</Table>
<Table>
FOR AGAINST ABSTAIN
2. Proposal to amend the Company's Amended [ ] [ ] [ ]
and Restated Long Term Incentive Plan to
Increase the number of shares subject to
the Plan by 500,000.
</Table>
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
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.
<Table>
Signature: Date: Signature: Date:
-------------------- ---------- -------------------- ----------
</Table>