<PAGE>
UNITED ROAD SERVICES, INC.
17 Computer Drive West
Albany, New York 12205
INFORMATION STATEMENT PURSUANT TO SECTION
14(f) OF THE SECURITIES EXCHANGE ACT OF
1934 AND RULE 14(f)-1 THEREUNDER
REPORT OF CHANGE IN MAJORITY OF DIRECTORS
IN CONNECTION WITH PENDING TRANSACTIONS
----------------
This information statement is being mailed on or about June 14, 2000, to the
holders of record, as of May 26, 2000, of shares of common stock, par value
$0.01 per share (the "Common Stock") of United Road Services, Inc., a Delaware
corporation (the "Company"). You are receiving this information statement in
connection with the anticipated appointment of persons (the "Blue Truck
Nominees") designated by Blue Truck Acquisition, LLC, a Delaware limited
liability company ("Blue Truck") to a majority of the seats on the board of
directors of the Company (the "Board of Directors" or the "Board") in
connection with Blue Truck's purchase of $25,000,000 worth of the Company's
newly issued series A participating convertible preferred stock, par value
$0.001 per share (the "Series A Preferred Stock").
Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") together with Rule 14(f)-1 promulgated thereunder require the
Company to provide its stockholders and the Securities and Exchange Commission
(the "SEC") with the information set forth in this information statement not
less than ten days prior to the date on which the election of the Blue Truck
Nominees will occur, or such other time period as may be established by the
SEC. No actions are required by the stockholders of the Company in connection
with any election of directors nominated by Blue Truck to the Board.
Nevertheless, you are urged to read this information statement carefully and in
its entirety.
Forward-Looking Statements
From time to time, in written reports and oral statements, management may
discuss its expectations regarding the Company's future performance. Generally,
these statements relate to business plans or strategies, projected or
anticipated benefits or other consequences of such plans or strategies or other
actions taken or to be taken by the Company, including the impact of such
plans, strategies or actions on the Company's results of operations or
components thereof, projected or anticipated benefits from operational changes,
acquisitions or dispositions made or to be made by the Company, or projections,
involving anticipated revenues, costs, earnings or other aspects of the
Company's results of operations. The words "expect," "believe," "anticipate,"
"project," "estimate," "intend" and similar expressions, and their opposites,
are intended to identify forward-looking statements. These forward-looking
statements are not guarantees of future performance but rather are based on
currently available competitive, financial and economic data and management's
operating plans. These forward-looking statements involve risks and
uncertainties that could render actual results materially different from
management's expectations. Such risks and uncertainties include, without
limitation, the availability of capital to fund operations, including
expenditures for new equipment, risks related to the Company's limited
operating history, risks related to the Company's ability to successfully
implement its revised business strategy, the loss of significant customers and
contracts, changes in applicable regulations, including but not limited to,
various federal, state and local laws and regulations regarding equipment,
driver certification, training, recordkeeping and workplace safety, risks
related to the Company's ability to integrate acquired companies, risks related
to the adequacy, functionality, sufficiency and cost of the Company's
information systems, potential exposure to environmental and other unknown or
contingent liabilities, risks associated with the Company's labor relations,
changes in the general level of demand for towing, recovery and transport
services, price changes in response to competitive factors, seasonal and other
variations in the demand for towing,
<PAGE>
recovery and transport services, general economic conditions, and other risk
factors (the "Risk Factors") described from time to time in the Company's
reports filed with the Securities and Exchange Commission (the "SEC").
All statements herein that are not statements of historical fact are
forward-looking statements. Although management believes that the expectations
reflected in such forward-looking statements are reasonable, there can be no
assurance that those expectations will prove to have been correct. Certain
other important factors that could cause actual results to differ materially
from management's expectations ("Cautionary Statements") are disclosed in this
information statement and in the other filings of the Company with the SEC. All
written forward-looking statements by or attributable to management in this
information statement are expressly qualified in their entirety by the Risk
Factors and the Cautionary Statements. Investors must recognize that events
could turn out to be significantly different from what management currently
expects.
Information Relating to the Company's Common Stock
As of June 13, 2000, the authorized capital stock of the Company consisted
of 3,500,000 shares of Common Stock of which 1,921,077 shares were issued and
outstanding and 5,000,000 shares of preferred stock, par value $0.001 per
share, of which no shares were issued and outstanding. Assuming a purchase
price of $53.74 per share of Series A Preferred Stock (based upon the average
of the last reported sale prices per share of the Common Stock for the 30
consecutive trading days immediately preceding June 13, 2000), Blue Truck is
expected to acquire approximately 465,203 shares of Series A Preferred Stock,
representing beneficial ownership of approximately 70.8% of the Company's
Common Stock.
Change of Control Transaction
On April 14, 2000, the Company and Blue Truck entered into a stock purchase
agreement which was amended on May 26, 2000 (as amended, the "Purchase
Agreement") pursuant to which Blue Truck has agreed to purchase and the Company
has agreed to sell $25,000,000 worth of shares of Series A Preferred Stock,
subject to the satisfaction of certain terms and conditions described more
fully in the Company's proxy statement filed with the SEC on June 13, 2000 (the
"Proxy Statement"), under the heading "Proposal No. 1: The Preferred Stock
Transactions--The KPS Transaction--The KPS Purchase Agreement--Conditions of
Purchase" and "--Conditions of Sale." Blue Truck has informed the Company that
the source of the funds to be used for the purchase of the Series A Preferred
Stock will be a cash contribution by Blue Truck's sole member, KPS Special
Situations Fund, L.P. ("KPS").
Pursuant to the Purchase Agreement and in accordance with the terms of an
investors' agreement (the "Investors' Agreement") to be entered into by the
Company and Blue Truck at the closing of the transactions contemplated by the
Purchase Agreement (the "Closing"), the Blue Truck Nominees will be appointed
to the Board at the Closing.
As a result, a sufficient number of the Company's current directors will
resign and be replaced with the Blue Truck Nominees so that the Blue Truck
Nominees will constitute a majority of the Board. Immediately after the
Closing, the Board of Directors is expected to consist of eleven members,
including six directors to be designated by Blue Truck and five of the
Company's current directors (of which two persons shall be directors nominated
by Charter URS LLC ("Charterhouse") pursuant to an investors' agreement between
the Company and Charterhouse, dated as of November 19, 1998 (as amended, the
"Charterhouse Investors Agreement")).
From and after the Closing, the Board will maintain an independent
committee, consisting of one of the directors nominated by the vote of the
holders of a majority of the outstanding shares of the Series A Preferred Stock
(the "Majority Holders") and all of the members of the Board of Directors who
are not Blue Truck Nominees. The Majority Holders will be entitled to nominate
the number of directors which the Original Holders will be entitled to
designate and the remaining members of the Board of Directors will be nominated
by the independent committee. At each meeting of the Company's stockholders at
which directors are elected,
2
<PAGE>
the director nominees proposed by the Company will include the nominees
designated by the Majority Holders and the nominees of the independent
committee. So long as Charterhouse is entitled to nominate members of the Board
of Directors, the Charterhouse nominees will be included among the nominees of
such independent committee.
Control of the Board
Subsequent to the Closing, in accordance with the terms of the Investors'
Agreement and the certificate of powers, designations, preferences and rights
of the Series A Preferred Stock (the "Certificate of Designations") to be
filed, at the Closing, by the Company with the Secretary of State of the State
of Delaware, Blue Truck will be entitled to designate certain members of the
Board of Directors as follows:
(a) For so long as Blue Truck or certain of its affiliates (the
"Original Holders") own at least 50% of the Series A Preferred Stock
acquired by Blue Truck pursuant to the Purchase Agreement (and adjusted for
any shares of the Company's capital stock purchased directly from the
Company by Blue Truck following the Closing (collectively, the "Original
Holders Shares")), the Majority Holders will be entitled to designate a
majority of the members of the Board of Directors.
(b) If the Original Holders ever own less than 50% of the Original
Holders Shares but at least 25% of the Original Holders Shares, and
regardless of whether the Original Holders subsequently regain ownership of
50% or more of such shares, the Majority Holders will thereafter be
entitled to designate three members of the Board of Directors.
(c) If the Original Holders ever own less than 25% of the Original
Holders Shares but at least 10% of the Original Holders Shares, and
regardless of whether the Original Holders subsequently regain ownership of
25% or more of such shares, the Majority Holders will thereafter be
entitled to designate one member of the Board of Directors.
(d) If the Original Holders ever own less than 10% of the Original
Holders Shares, and regardless of whether the Original Holders subsequently
regain ownership of 10% or more of such shares, the Majority Holders will
thereafter not be entitled to designate any members of the Board of
Directors.
The foregoing provisions relating to election of directors are summarized in
the following table:
<TABLE>
<CAPTION>
Percentage of Series A
Preferred Stock
Owned by the Original Holders Number of Directors
----------------------------- -------------------
<S> <C>
50% or more A majority of the Board
At least 25% but less than 50% Three
At least 10% but less than 25% One
Less than 10% None
</TABLE>
As a result, as long as the Original Holders own at least 50% of the
Original Holders Shares and a majority of the shares of the Series A Preferred
Stock, Blue Truck will retain control of the Board and decide the outcome of
most matters to be determined by the Board of Directors.
Control of the Vote on Matters Submitted to Stockholders
Except with respect to certain elections of directors (as described below),
holders of Series A Preferred Stock will be entitled to vote on all matters
presented to a vote of the stockholders of the Company, voting together with
holders of the Common Stock as a single class (other than matters required to
be submitted to a class or series vote pursuant to the General Corporation Law
of the State of Delaware or the Company's Certificate of Incorporation or By-
laws).
At any time that (i) the Majority Holders are not entitled to designate at
least three members of the Board of Directors, or (ii) any person solicits
proxies or consents in support of or seeking the election of any director who
has not been nominated by the Board of Directors, then the holders of Series A
Preferred Stock will be entitled to vote in the election of the directors of
the Company (so long as, in the case of clause (ii) above, such vote is in
favor of the Board's nominees).
3
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The holder of each share of Series A Preferred Stock shall be entitled to
the number of votes equal to the number of full shares of Common Stock into
which such share of Series A Preferred Stock could be converted on the record
date for such vote. Fractional votes will not, however, be permitted and any
fractional votes resulting from the foregoing formula (after aggregating all
shares of Common Stock into which shares of Series A Preferred Stock held by
each holder could be converted) will be rounded to the nearest whole number. As
a result, immediately after the Closing, Blue Truck will be able to control the
vote on all matters submitted to the stockholders of the Company other than
certain elections of directors as described above.
Certain Fees
At the Closing, the Company will pay KPS Management, LLC, an affiliate of
Blue Truck and KPS ("KPS Management"), a transaction fee of $2,500,000.
Following the Closing, the Company will pay KPS Management an annual
management fee of (a) $1,000,000, payable quarterly, for so long as holders of
the Series A Preferred Stock have the right under the Investors' Agreement or
the Certificate of Designations to designate a majority of the Company's
directors, or (b) $500,000, payable quarterly, for so long as holders of the
Series A Preferred Stock have the right under the Investors' Agreement or the
Certificate of Designations to designate at least three of the Company's
directors. No management fee will be payable in the event holders of the Series
A Preferred Stock do not have the right under the Investors' Agreement or the
Certificate of Designations to designate at least three of the Company's
directors.
Continuing Directors
Following the appointment of the Blue Truck Nominees, there will be five
continuing directors of the Company. The name, age and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past give years, of each continuing director are set forth
below:
Robert L. Berner, III, 38, has served as a director since December 1998. Mr.
Berner is a Managing Director of Charterhouse Group International, Inc.
("Charterhouse International") and a member of its Investment Committee. Mr.
Berner joined Charterhouse International in January 1997. From 1986 through
December 1996, Mr. Berner was a Principal in the Mergers and Acquisitions
Department at Morgan Stanley & Co., Incorporated.
Gerald R. Riordan, 51, has served as a director and as the Company's Chief
Executive Officer since October 1999 and as the Company's Secretary since
November 1999. Between December 1997 and October 1999, Mr. Riordan was an
entrepreneur pursuing private investments in real estate and other ventures.
From October 1996 to December 1997, he was President and Chief Operating
Officer of Ryder TRS, Inc. (not owned by Ryder System, Inc.), a truck rental
company. From 1995 to October 1996, Mr. Riordan served as President of Ryder
Consumer Truck Rental and Ryder Student Transportation Services.
Edward W. Morawski, 51, has served as a director and as a Vice President of
the Company since May 1998. In 1977, Mr. Morawski founded Northland Auto
Transporters, Inc. and Northland Fleet Leasing, Inc. (collectively,
"Northland"), one of the businesses acquired by the Company in connection with
its initial public offering (all such businesses collectively, the "Founding
Companies"), and served as the President of Northland from inception until its
acquisition by the Company in May 1998.
Michael S. Pfeffer, 36, has served as a director since March 1998. Mr.
Pfeffer has been a Senior Vice President of Charterhouse International since
May 1998. From September 1996 to May 1998, Mr. Pfeffer served in executive
positions in the equity capital group of General Electric Capital Corporation,
most recently as Senior Vice President. From August 1993 to September 1996, Mr.
Pfeffer was Vice President of Charterhouse Environmental Capital Group.
4
<PAGE>
Todd Q. Smart, 35, has served as a director since May 1998. Mr. Smart
founded Absolute Towing and Transporting, Inc. ("Absolute"), one of the
Founding Companies, and served as the President of Absolute from inception
until its acquisition by the Company in May 1998. Mr. Smart provided the
Company with acquisition-related consulting services from May 1998 though
September 1999. Since June 1998, Mr. Smart has operated an official police
garage in Los Angeles, California.
Messrs. Berner and Pfeffer were nominated by Charterhouse to serve as
directors of the Company pursuant to the provisions of the Charterhouse
Investors Agreement.
Resigning Directors
At the Closing, the following directors will resign so that certain of the
Blue Truck Nominees may be appointed in their place: Richard A. Molyneux,
Merril M. Halpern, Grace M. Hawkins, and Mark J. Henninger.
Blue Truck Nominees
The name, age and present principal occupation or employment, and material
occupations, positions, offices or employment for the past five years, of each
person whom Blue Truck has nominated to serve on the Board of Directors
effective as of the Closing are set forth below. Blue Truck has informed the
Company that each of such persons has consented to act as a director.
Eugene J. Keilin, 57, is a founding principal of KPS and of Keilin & Co. LLC
("Keilin"), an investment banking firm specializing in providing financial
advisory services in connection with mergers, acquisitions, restructurings and
turnaround transactions, often on behalf of employee groups. Mr. Keilin is
Chairman of the board of directors of Blue Ridge Paper Products, Inc. ("Blue
Ridge"), a leading manufacturer of envelope-grade paper and board used in
liquid packaging, and serves on the board of directors of Blue Heron Paper
Company ("Blue Heron") a manufacturer of newsprint and groundwood paper
products. Prior to founding Keilin, Mr. Keilin was a General Partner of Lazard
Freres & Co. Mr. Keilin was Chairman of the Municipal Assistance Corporation
for the City of New York from 1993-1995, an agency created in 1975 to deal with
New York City's financial crisis. Mr. Keilin is a Chairman of the Citizens
Budget Commission, a Trustee of the Brooklyn Museum, and serves on the board of
directors of Concern Worldwide, U.S. Mr. Keilin attended Rice University and
Harvard Law School.
Michael G. Psaros, 33, is a founding principal of KPS and a principal of
Keilin. Mr. Psaros serves on the boards of directors of the following
companies: Blue Ridge, Blue Heron, and Golden Northwest Aluminum Corp., a
producer of primary and extruded aluminum products. Mr. Psaros was formerly an
investment banker with Bear, Stearns & Co., Inc. Mr. Psaros graduated from
Georgetown University and attended Sofia University in Tokyo, Japan.
David Shapiro, 38, is a founding principal of KPS and a principal of Keilin.
Mr. Shapiro is Chairman of the board of directors of Blue Heron and serves on
the board of directors of Blue Ridge. Mr. Shapiro was formerly an investment
banker at Drexel Burnham Lambert Incorporated and Dean Witter Reynolds, Inc.
Mr. Shapiro graduated from the University of Michigan and received an M.B.A.
from the University of Chicago Graduate School of Business.
Stephen Presser, 40, joined KPS as a member and general counsel in 1998. Mr.
Presser is also a principal of Keilin. Mr. Presser is a member of the board of
directors of Blue Ridge and Blue Heron. Prior to joining KPS, Mr. Presser was a
partner in the law firm of Cohen, Weiss and Simon of New York, New York. Mr.
Presser received an A.B. and an M.A. from Brown University in 1981 and a J.D.
from the Harvard Law School in 1984.
Raquel Palmer, 27, is an associate of KPS and of Keilin. Ms. Palmer serves
on the board of directors of Blue Ridge and Blue Heron. Ms. Palmer was formerly
an investment banker with Kidder, Peabody & Co. Ms. Palmer is a graduate of
Stanford University.
5
<PAGE>
Brian Riley, 30, has been an associate of KPS and of Keilin since August,
1993. Mr. Riley serves on the board of directors of Blue Ridge and Blue Heron.
Prior to joining KPS, Mr. Riley was an investment banker in the Mergers and
Acquisitions Department of Smith Barney, Harris & Upham. Mr. Riley is a
graduate of the University of Pennsylvania's Wharton School.
The Company has been advised by Blue Truck that, to the best of Blue Truck's
knowledge, none of the Blue Truck Nominees, (i) is currently a director of, or
holds a position with, the Company, (ii) has a familial relationship with any
of the directors or executive officers of the Company, (iii) beneficially owns
any securities (or rights to acquire securities) of the Company, (iv) is a
party adverse to the Company or any of its subsidiaries, or has a material
interest adverse to the Company or any of its subsidiaries, in any legal
proceeding, or (v) has been involved in any transactions with the Company or
any of its directors, executive officers or affiliates which are required to be
disclosed pursuant to the rules and regulations of the SEC.
Board of Directors following the Closing
Following the closing of the transactions contemplated by the Purchase
Agreement, it is expected that the Board of Directors will be constituted as
follows:
<TABLE>
<CAPTION>
Class III
Class II Directors Directors Class I Directors
with terms expiring with terms with terms
in 2000 expiring in 2001 expiring in 2002
------------------- ------------------ ------------------
<S> <C> <C>
Robert L. Berner, III Edward W. Morawski Gerald R. Riordan
David Shapiro Todd Q. Smart Michael S. Pfeffer
Raquel Palmer Eugene J. Keilin Michael Psaros
Brian Riley Stephen Presser
</TABLE>
Executive Officers
The following table sets forth certain information with respect to the
executive officers of the Company who are not directors of the Company:
Executive Officers Who Are Not Directors
Donald J. Marr, 41, has served as Senior Vice President and Chief Financial
Officer of the Company since January 1998. From 1986 through 1997, Mr. Marr
held a series of management positions with KeyCorp, most recently as Senior
Vice President, Planning and Analysis. Mr. Marr is a certified public
accountant. From 1984 to 1986, Mr. Marr held various positions at the
accounting firm currently known as PricewaterhouseCoopers. Prior to 1984, Mr.
Marr served as a logistics specialist in the United States Navy.
Michael A. Wysocki, 46, has been President of the Company's Transport
Business Unit since January 2000. Mr. Wysocki founded MPG Transco, Ltd., a
Livonia, Michigan based auto transport company ("MPG") in 1973, and served as
its President and Chief Executive Officer from inception until MPG was acquired
by the Company in January 1999. From January 1999 until January 2000, Mr.
Wysocki served as general manager of the Company's MPG division. Since July
1985, Mr. Wysocki has been the Chief Executive Officer of Translesco, Inc., a
corporation that leases employees to MPG ("Translesco").
Harold W. Borhauer II, 51, has been President of the Company's Towing and
Recovery Business Unit since January 2000. In 1983, Mr. Borhauer founded
Arizona's Towing Professionals, Inc., which does business as Shamrock Towing
("Shamrock"), a Phoenix, Arizona based towing and recovery company that was
acquired by the Company in March 1999. Mr. Borhauer served as Shamrock's Chief
Executive Officer from 1983 until its acquisition by the Company. From March
1999 until January 2000, Mr. Borhauer served as general manager of the
Company's Shamrock division.
Organization and Remuneration of Board of Directors
The Board of Directors held nine meetings during the fiscal year ended
December 31, 1999 and also acted from time to time by unanimous written
consent. Each director attended at least 75% of all of the meetings held by the
Board of Directors and any committees on which said director served.
6
<PAGE>
As compensation for service as a director of the Company, each director who
is not an employee of the Company or any of its subsidiaries or affiliated with
Charterhouse is entitled to receive (i) upon election as a director and on the
date of each annual meeting of the Board of Directors thereafter, a grant of
options to purchase 2,000 shares of Common Stock at the fair market value on
the date of grant, and (ii) cash compensation of $2,500 for each meeting
attended in person and $750 per each meeting in which the director participates
by telephone. In addition, all directors are reimbursed for their out-of-pocket
expenses incurred in connection with attending meetings of the Board of
Directors and committees thereof.
In addition, each director who is neither an officer nor an employee of the
Company (i) is entitled to receive upon accepting the position of chairman of a
committee of the Board of Directors (or, as of September 30, 1999, with respect
to directors who were committee chairmen on that date), a grant of options to
purchase 250 shares of the Company's Common Stock pursuant to the 1998 stock
option plan, and (ii) who serves on a committee of the Board of Directors is
entitled to receive $500 in cash (the "Committee Fee") for each committee
meeting attended by such director; provided that no Committee Fee shall be
payable to any director unless and until the closing price of the Common Stock
exceeds $50.00 per share for five consecutive trading days following the date
of the meeting to which the Committee Fee relates.
During 1999, Ms. Hawkins and Messrs. Henninger, Smart and Molyneux each
received options to purchase 2,000 shares of Common Stock in connection with
their service on the Board of Directors. Mr. Molyneux was also awarded, as of
September 30, 1999, (i) options to purchase 7,500 shares of Common Stock in
connection with his appointment as Chairman of the Board of Directors, and (ii)
options to purchase an aggregate of 750 shares of Common Stock in connection
with his service as Chairman of the Company's audit, compensation and
independent committees. As of September 30, 1999, Mr. Smart was also awarded
options to purchase 250 shares of Common Stock in connection with his service
as Chairman of the Company's executive committee. The Company also has
consulting or employment agreements with certain directors. See the section of
this information statement entitled "Certain Relationships and Related
Transactions."
The Board of Directors has an audit committee and a compensation committee.
Audit committee
The audit committee reviews with the Company's independent auditors the
scope of their annual and interim examinations and consults with the auditors
during any audit when appropriate. The audit committee is also responsible for
(i) making recommendations to the Board of Directors with respect to the
independent auditors who conduct the annual examination of the Company's
accounts, (ii) reviewing the scope of the annual audit and meeting periodically
with the Company's independent auditors to review their findings and
recommendations, (iii) approving major accounting policies or changes thereto,
and (iv) periodically reviewing the Company's principal internal financial
controls. The audit committee held three meetings during the fiscal year ended
December 31, 1999. The current members of the audit committee are Messrs.
Molyneux, Pfeffer and Smart.
Compensation Committee
The compensation committee (i) develops and monitors compensation
arrangements for the executive officers of the Company based upon
recommendations of the Chief Executive Officer, in the case of executives other
than the Chief Executive Officer, (ii) reviews the compensation of any employee
of the Company whose compensation exceeds $100,000 per annum, (iii) adopts
amendments to all of the Company's employee benefit plans intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended,
(iv) administers the Company's 1998 stock option plan and (v) performs such
other activities and functions related to executive compensation as the Board
of Directors may from time to time direct. The compensation committee held one
meeting during the fiscal year ended December 31, 1999, and acted from time to
time by unanimous written consent. The current members of the compensation
committee are Ms. Hawkins, Mr. Henninger and Mr. Molyneux.
7
<PAGE>
Compensation Committee Interlocks and Insider Participation. As of December
31, 1999, the compensation committee of the Board of Directors consisted of Ms.
Hawkins, and Messrs. Molyneux and Henninger. Mr. Henninger was appointed to the
compensation committee after the resignation of Donald J. Moorehead, Jr. from
the Board of Directors as of September 30, 1999. No member of the compensation
committee was an officer or employee of the Company or its subsidiaries during
1999, or an officer of the Company or its subsidiaries at any time prior to
1999. During 1999, none of the Named Executive Officers (as defined in this
information statement under the heading "Executive Compensation--Summary
Compensation Table") served as a director or member of the compensation
committee of another entity, one of whose executive officers served as a
director or member of the compensation committee of the Company. Mr. Henninger
has certain agreements with the Company described under the section below
entitled "Certain Relationships and Related Transactions."
Executive Compensation
Summary Compensation Table
The following table presents summary information concerning the compensation
of (i) all individuals who served as the Company's Chief Executive Officer
("CEO") during 1999 and (ii) the Company's four most highly compensated
officers during 1999 other than the CEO (together, the "Named Executive
Officers") for services rendered to the Company and its subsidiaries during the
fiscal years 1998 and 1999. Other than the Named Executive Officers, no
executive officer of the Company received salary and bonus payments exceeding
$100,000 in the aggregate during fiscal year 1999. No compensation was paid by
the Company to the Named Executive Officers during fiscal year 1997.
<TABLE>
<CAPTION>
Securities
Underlying All Other
Name Year Salary Bonus Options Compensation
---- ---- -------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Gerald R. Riordan(1)............. 1999 $ 61,539 -- 75,000 $ 4,575(2)
Chief Executive Officer
Edward T. Sheehan(3)............. 1999 118,850 -- -- 196,539(4)
Former Chief Executive Officer 1998 141,678 -- 9,000 --
Donald J. Marr................... 1999 74,827 $66,042 5,000 --
Chief Financial Officer 1998 75,000 50,000 12,500 --
Allan D. Pass, Ph.D(5)........... 1999 222,115 -- -- --
Former Chief Operating Officer 1998 125,765 -- 15,500 8,887(2)
Robert J. Adams, Jr.(6).......... 1999 174,615 -- -- 7,692(7)
Former Chief Acquisition Officer 1998 110,002 -- 11,000 4,554(8)
</TABLE>
--------
(1) Mr. Riordan's employment with the Company began as of October 11, 1999.
(2) Consists of housing expenses paid by the Company on behalf of the Named
Executive Officer.
(3) Mr. Sheehan was employed by the Company from October 1997 until June 21,
1999.
(4) Consists of (i) $26,923 representing previously unpaid salary for Mr.
Sheehan's service to the Company for the period from February 26, 1998 to
May 15, 1998, (ii) $17,308 representing reimbursement for vacation time
accrued but unused by Mr. Sheehan, and (iii) $152,308 in severance payments
made pursuant to the Employment Termination and Release Agreement between
the Company and Mr. Sheehan.
(5) Dr. Pass' employment with the Company began as of April 20, 1998. From
January 1, 1998 through April 19, 1998, Dr. Pass provided consulting
services to the Company. Dr. Pass terminated his employment agreement with
the Company effective as of December 15, 1999.
(6) Mr. Adams' employment with the Company began as of June 1, 1998. From
February 1, 1998 through June 1, 1998, Mr. Adams provided acquisition-
related consulting services to the Company. Mr. Adams terminated his
employment agreement with the Company effective as of December 15, 1999.
(7) Consists of severance payments made to Mr. Adams pursuant to his Amended
and Restated Employment Agreement with the Company.
(8) Consists of relocation expenses paid by the Company on behalf of the Named
Executive Officer.
8
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Option Grants in 1999
The following table sets forth information concerning stock option grants to
Mr. Riordan and Mr. Marr during 1999. None of the other Named Executive
Officers received grants of stock options during 1999.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Percentage of Annual Rates of Stock
Total Options Price Appreciation
Number of Shares Granted to for Option Term(1)
Underlying Employees in Exercise Price Expiration ---------------------
Name Options Granted Fiscal Year (per share) Date 5% 10%
---- ---------------- ------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gerald R. Riordan....... 75,000(2) 66.0 $29.06 10/11/09 $1,370,250 $3,476,250
Donald J. Marr.......... 5,000(3) 4.4 33.13 9/1/09 104,200 264,000
</TABLE>
--------
(1) Represents the potential realizable value of each grant of options assuming
that the market price of the underlying securities appreciates in value
from the date of grant to the end of the option term at the rates of 5% and
10% compounded annually.
(2) All of such options were issued at fair market value on October 11, 1999
and vest over a period of three years at a rate of 33 1/3% per year
beginning on October 11, 2000.
(3) All of such options were granted pursuant to the 1998 stock option plan,
were issued at fair market value on September 1, 1999 and were fully vested
on the date of grant.
Fiscal Year-End Option Values
The following table sets forth information concerning the number of shares
of Common Stock underlying exercisable and unexercisable options held by the
Named Executive Officers as of December 31, 1999. The exercise price for each
of these options exceeded the fair market value of such options based on the
last reported sale price of the Common Stock on December 31, 1999 ($1.625 per
share, equivalent to $16.25 per share after giving effect to the ten for one
reverse stock split effected by the Company as of May 4, 2000) and, therefore,
the options had no value as of such date. No options were exercised by any of
the Named Executive Officers during 1999.
<TABLE>
<CAPTION>
Exercisable Unexercisable
Name Options Options
---- ----------- -------------
<S> <C> <C>
Gerald R. Riordan............................. -- 75,000
Donald J. Marr................................ 9,167 8,333
Edward T. Sheehan............................. 3,000 6,000
Allan D. Pass, Ph.D........................... 5,167 10,333
Robert J. Adams, Jr........................... 3,667 7,333
</TABLE>
Employment Agreements
Below is a discussion of the existing employment agreements with each of the
Named Executive Officers prior to the Closing.
The Company's employment agreement with Mr. Riordan, which was effective as
of October 11, 1999, has an initial term of three years with an evergreen
extension continuing after the initial term unless either the Company or Mr.
Riordan provides ten days' notice of termination. Pursuant to this agreement,
Mr. Riordan is entitled to receive an annual salary of not less than $300,000.
The terms of the agreement require the Company to pay Mr. Riordan a termination
fee (over a period of 24 months) equal to approximately two times his annual
salary and bonus if (i) the agreement is terminated without "Cause" (as defined
in Mr. Riordan's employment agreement) by the Company, or (ii) the agreement is
terminated by Mr. Riordan following the Company's assignment to him of regular
duties, responsibilities or status which the Board of Directors determines, in
good faith, to be materially inconsistent with, or a reduction or alteration in
the nature and status of, Mr. Riordan's duties, responsibilities and status as
set forth in the agreement. In addition, all stock options pursuant to any of
the Company's stock option plans granted to Mr. Riordan prior to the effective
date of such a termination will continue to vest as if such termination had not
occurred, and he will be entitled to continue to receive health, life and
disability insurance benefits for a period of two years after termination. Upon
the occurrence of a "Change of Control" (as defined in Mr. Riordan's employment
agreement) of the Company, Mr. Riordan has
9
<PAGE>
the option, exercisable within one year after the Change of Control, to
terminate his employment agreement and receive a lump sum payment equal to
approximately three times his base salary and bonus. Upon such an event, he
will be entitled to continue to receive health, life and disability insurance
benefits for a period of three years thereafter. Regardless of whether Mr.
Riordan terminates his employment agreement after a Change of Control, all of
his stock options that are unvested as of the effective date of a Change of
Control will become immediately vested and exercisable. The agreement contains
a covenant prohibiting Mr. Riordan from competing with the Company for a period
of one year following any expiration or termination of the agreement. The
agreement also provides for customary benefits and perquisites.
The Company's employment agreement with Mr. Marr, which was effective as of
September 8, 1999, expires on October 11, 2000. Pursuant to his employment
agreement, Mr. Marr is entitled to receive annual compensation of not less than
$180,000, subject to an annual increase at the discretion of the compensation
committee of the Board of Directors. Mr. Marr is also entitled to an additional
annual bonus at the discretion of the compensation committee. The agreement
requires the Company to pay Mr. Marr a termination fee (over a period of one
year) equal to his base salary at the time of termination and his bonus, if
any, for the year immediately preceding termination, if (i) the agreement is
terminated without "Cause" (as defined in Mr. Marr's employment agreement) by
the Company, (ii) the agreement is terminated by Mr. Marr following the
Company's assignment to him of regular duties, responsibilities or status which
the Board of Directors determines, in good faith, to be materially inconsistent
with, or a reduction or alteration in the nature and status of, Mr. Marr's
duties, responsibilities and status in effect prior to such assignment, or
(iii) Mr. Marr terminates his employment within one month following a
relocation of the Company's headquarters more than 45 miles from its current
location. In addition, all stock options granted to Mr. Marr pursuant to any of
the Company's stock option plans prior to the effective date of such a
termination will continue to vest as if such termination had not occurred, and
he will be entitled to continue to receive health, life and disability
insurance benefits for a period of two years after termination. If after a
"Change of Control" (as defined in Mr. Marr's employment agreement) of the
Company, (i) Mr. Marr is assigned duties, responsibilities or status
inconsistent with his duties, responsibilities or status prior to the Change of
Control, (ii) Mr. Marr's salary or specified bonus is reduced, (iii) the
Company or its successor fails to continue the Company's insurance, disability
or option plans, or any other benefit plans, policies, practices or
arrangements in which Mr. Marr participated prior to the Change of Control, or
the Company or its successor fails to provide for Mr. Marr's participation in
such plans or arrangements on the same basis as existed prior to the Change of
Control, (iv) the Company fails to obtain a satisfactory agreement from its
successor to assume Mr. Marr's employment agreement, (v) Mr. Marr's employment
is terminated for any reason other than for Cause, or (vi) the persons who were
directors of the Company immediately prior to the Change of Control cease to
constitute a majority of the Board of Directors of the Company following such
transaction, Mr. Marr has the option, exercisable until October 11, 2000, to
terminate his employment agreement and receive a lump sum payment equal to
approximately three times his base salary and bonus. In such event, he will be
entitled to continue to receive health, life and disability insurance benefits
for a period of three years after such termination. Regardless of whether Mr.
Marr terminates his employment agreement after a Change of Control, all of his
stock options that are unvested as of the effective date of a Change of Control
will become immediately vested and exercisable. The agreement contains a
covenant prohibiting Mr. Marr from competing with the Company for a period of
one year following any expiration or termination of his agreement. The
agreement also provides for customary benefits and perquisites.
The Company had an employment agreement with Mr. Sheehan that provided Mr.
Sheehan with an annual base salary of not less than $300,000. On June 21, 1999,
Mr. Sheehan's employment agreement was terminated and the Company and Mr.
Sheehan entered into an Employment Termination and Release Agreement. Under the
termination agreement, Mr. Sheehan received (i) a lump sum payment equal to
$26,923 representing previously unpaid salary for Mr. Sheehan's service to the
Company for the period of February 26, 1998 to May 15, 1998, and (ii) a lump
sum payment equal to $17,308 for unused vacation. Pursuant to the agreement,
Mr. Sheehan is entitled to a severance payment of $600,000 payable over a two
year period in equal installments. In addition, the agreement provides that all
stock options granted to Mr. Sheehan pursuant to any of the Company's stock
option plans prior to the termination of Mr. Sheehan's employment will continue
to vest as if
10
<PAGE>
such termination had not occurred, and that Mr. Sheehan is entitled to continue
to receive medical, life, dental and disability insurance benefits for a period
of five years after termination. The agreement further provides that all shares
of Common Stock purchased by Mr. Sheehan pursuant to the Stock Purchase and
Restriction Agreement, dated November 1997, between the Company and Mr. Sheehan
shall be considered fully "vested" under such agreement as of the date of
termination, and that the Company shall have no right to repurchase such
shares. The agreement contains a covenant prohibiting Mr. Sheehan from
competing with the Company for a period of two years following the termination
of his employment.
The Company had employment agreements with Dr. Pass and Mr. Adams which were
terminated by said individuals as of December 15, 1999. Each of these
agreements had an initial term of three years with an evergreen extension
continuing after the initial term unless either the Company or such individual
provided ten days' notice of termination. Pursuant to these employment
agreements, Dr. Pass and Mr. Adams were entitled to receive an annual salary of
not less than $250,000 and $200,000, respectively. The terms of the agreements
required the Company to pay Dr. Pass and Mr. Adams a termination fee equal to
approximately two times such individual's salary and bonus if (i) such
individual's agreement was terminated without "Cause" (as defined in the
employment agreements of Dr. Pass and Mr. Adams, respectively) by the Company,
(ii) the Board of Directors determined in good faith that such individual had
been assigned duties, responsibilities or status materially inconsistent with
the duties, responsibilities and status set forth in his employment agreement,
or (iii) if such individual terminated his employment with the Company within
six months after any termination of Mr. Sheehan's employment with the Company.
The agreements also provided that, upon any such event, all stock options
granted to such individuals pursuant to any of the Company's stock option plans
prior to the effective date of termination would continue to vest as if such
termination had not occurred and such individuals would be entitled to continue
to receive health, life and disability insurance benefits for a period of two
years after termination. Each agreement also contained a covenant prohibiting
Dr. Pass and Mr. Adams from competing with the Company for a period of one year
following any expiration or termination of the agreement.
Compensation Committee Report on Executive Compensation
The following is a report from the compensation committee describing the
policies pursuant to which compensation was paid to executive officers of the
Company for performance during 1999.
Compensation Philosophy and Approach
Generally, the Company seeks to attract, retain and motivate its executive
officers through a combination of base salary, incentive awards based upon
individual performance and stock option awards under the Company's 1998 stock
option plan and otherwise. The compensation committee believes that a
substantial portion of the aggregate annual compensation of each executive
officer should be influenced by the performance of the Company and the
individual contribution of the executive officer.
Base Salaries
The Company's base salary levels are set in the employment agreements
entered into between the Company and each executive officer. The compensation
committee believes that the base salaries of the Company's executive officers
for 1999 were generally below those for other comparable positions within the
motor vehicle and equipment towing, recovery and transport service industry and
similar industries. However, the Company places significant emphasis on
incentive awards and stock option grants as a means of motivating and rewarding
its management. The compensation committee believes that this strategy provides
optimal incentives for management to create long-term shareholder value.
Incentive Compensation Payments
In addition to base pay, the Company's senior executives (including the
Company's Chief Executive Officer) are eligible to receive bonuses and stock
option awards. Bonuses and stock options are awarded by the compensation
committee based upon the individual performance of each executive officer. Mr.
Marr received a
11
<PAGE>
cash bonus of $66,042 as of December 31, 1999. Mr. Riordan earned a bonus of
$100,000 for his services during 1999, 50% of which was paid in the form of
Common Stock. The Company's other Named Executive Officers terminated their
respective employment agreements prior to December 31, 1999 and, therefore, did
not receive a bonus during 1999. Stock option grants made to the Named
Executive Officers during 1999 are described in this information statement
under the heading "Option Grants in 1999."
Compensation of the Chief Executive Officer
The compensation policies applicable to Mr. Riordan, the Company's Chief
Executive Officer and Secretary, are similar to those applicable to the
Company's other executive officers. The Company entered into an employment
agreement with Mr. Riordan effective as of October 11, 1999, pursuant to which
Mr. Riordan is scheduled to receive a base salary of no less than $300,000 per
annum.
In connection with his appointment as Chief Executive Officer, Mr. Riordan
was granted a non-statutory stock option to purchase 75,000 shares of the
Company's Common Stock. The option granted to Mr. Riordan vests over a period
of three years, at a rate of 33 1/3% each year, beginning on October 11, 2000.
The exercise price for the option was based on the fair market value of the
Common Stock on the date of the grant, and the option expires after a term of
ten years. In addition, pursuant to the terms of his employment agreement, Mr.
Riordan was awarded a bonus consisting of $50,000 in cash and 3,077 shares of
Common Stock as of January 1, 2000.
The compensation committee believes that Mr. Riordan's base salary and
overall compensation package is below or comparable to compensation received by
persons in similar positions in the motor vehicle and equipment towing,
recovery and transport service industry and similar industries. However, stock
option grants provide a mechanism for the Chief Executive Officer, along with
other senior executive officers of the Company, to benefit directly from strong
management performance. Thus, a substantial portion of Mr. Riordan's total
compensation is tied directly to the creation of stockholder value.
Deductibility of Compensation in Excess of $1 Million per Year
Section 162(m) of the Internal Revenue Code of 1986 (as amended, the "Code")
in general, precludes a public corporation from claiming a tax deduction for
compensation in excess of $1 million paid in any taxable year to any Named
Executive Officer. Because the total compensation for executive officers of the
Company was significantly below the $1 million threshold in 1999, the Board of
Directors did not address the issues related to this provision in 1999. In
connection with the transactions contemplated by the Purchase Agreement, the
Board of Directors has proposed certain measures intended to ensure compliance
with the performance-based compensation exception to the deduction limit set
forth in Section 162(m) of the Code. See the section of the Proxy Statement
entitled "Proposal No. 2--The Amendment to the Stock Option Plan--Compliance
with Section 162(m) of the Code."
This report by the compensation committee shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this information statement into any filing under the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, and shall not otherwise be
deemed filed under such Acts.
Respectfully Submitted By:
THE COMPENSATION COMMITTEE
Grace M. Hawkins
Mark J. Henninger
Richard A. Molyneux
12
<PAGE>
Certain Relationships And Related Transactions
Each of Messrs. Morawski, Smart and Henninger is a former owner of a
business acquired by the Company during 1998. The Company is required to make
earn-out payments to these individuals for each of the years 1998 through 2002,
if their respective businesses achieve target levels of net revenue. The target
level of net revenue for each business, for the years 1999 through 2002, is
generally 110% of the greater of its actual net revenue or its target net
revenue for the prior year. If the target net revenue is achieved for a
particular year, the Company must make an initial payment in Common Stock
generally equal to 5% of the excess of actual net revenue over the target
level. In addition, once the target level of net revenue for a particular year
is met, the Company must make subsequent and equal payments in Common Stock for
each year through 2002, but only if the actual net revenue for the respective
subsequent year exceeds the actual net revenue for the year that the earn-out
target was first achieved. None of Messrs. Morawski, Smart or Henninger
received an earn-out payment based on the performance of his respective
business during 1999.
Pursuant to the agreements entered into in connection with the Company's
acquisition of their respective businesses, Messrs. Morawski, Smart and
Henninger have agreed not to compete with the Company for a period of five
years from the date of the Company's initial public offering in defined
business and geographic areas.
In connection with the Company's purchases of their respective businesses,
the Company entered into consulting agreements with Mr. Smart and Mr.
Henninger. Pursuant to these agreements, Mr. Smart and Mr. Henninger were each
entitled to receive a consulting fee equal to two percent (2%) of the gross
revenue of each business they assisted the Company in acquiring, with the fee
to be based on the acquired business' gross revenue for the twelve months
immediately preceding its acquisition by the Company. These consulting
agreements were terminated in September 1999. The Company made no payments to
either Mr. Smart or Mr. Henninger under their consulting agreements during
1999.
In connection with the Company's acquisition of Northland, the Company
entered into an employment agreement with Mr. Morawski pursuant to which he
serves as one of the Company's vice presidents for a term of three years, with
an annual base salary of $150,000.
The employment and consulting agreements described above also contain
covenants not to compete for one year after termination of the agreement.
In June 1998, Mr. Smart was awarded a contract for police towing in a police
district in Los Angeles. Mr. Smart conducts these operations through a business
that he controls. The Company has the option, exercisable until May 1, 2001, to
buy Mr. Smart's business. The purchase price under this option is equal to 13
times the after-tax income of the business for the 12 month period prior to the
exercise of the option. Mr. Henninger is also seeking the award of a contract
for police towing in another district in Los Angeles. If Mr. Henninger is
awarded this contract, the Company will have the right, exercisable until
August 7, 2001, to buy this business on the same terms described above relating
to Mr. Smart's business.
In January 1999, the Company paid approximately $5.4 million in cash and
issued approximately 50,835 shares of Common Stock to Michael A. Wysocki in
consideration of the Company's acquisition of MPG. In connection with this
acquisition, the Company entered into an employment agreement with Mr. Wysocki
pursuant to which he served as general manager of the Company's MPG division
from January 1999 until January 2000. Mr. Wysocki received a salary of $110,000
for his services under this agreement. Mr. Wysocki is the majority owner of
Translesco, Inc., a corporation from which the Company leases employees to
provide services to the Company's MPG division. During 1999, the Company paid
Translesco approximately $10.5 million in connection with the lease of such
employees. In January 2000, the Company entered into a new employment agreement
with Mr. Wysocki pursuant to which Mr. Wysocki agreed to serve as President of
the Company's Transport Business Unit for a term of 18 months at an annual
salary of $150,000. This agreement may be extended by mutual agreement of the
parties and prohibits Mr. Wysocki from competing with the
13
<PAGE>
Company during the term of the agreement and for a period of two years after
termination. In connection with his employment agreement, the Company granted
Mr. Wysocki options to purchase 7,500 shares of Common Stock at an exercise
price equal to the fair market value of the Company's Common Stock on the date
of grant.
In March 1999, the Company paid approximately $785,000 in cash and issued
approximately 8,194 shares of Common Stock to Harold W. Borhauer II and his
wife, Lynda A. Borhauer, in connection with the Company's acquisition of
Shamrock. In consideration for this acquisition, the Company entered into two
lease agreements with Mr. and Mrs. Borhauer pursuant to which the Company
leases property used to conduct the Shamrock business. Mr. and Mrs. Borhauer
received aggregate lease payments of $91,903 under these lease agreements in
1999. In January 2000, the Company entered into an employment agreement with
Mr. Borhauer pursuant to which Mr. Borhauer agreed to serve as President of the
Company's Towing and Recovery Division for a term of 18 months at an annual
salary of $125,000. This agreement may be extended by mutual agreement of the
parties and prohibits Mr. Borhauer from competing with the Company during the
term of the agreement and for a period of two years after termination. In
connection with this agreement, the Company granted Mr. Borhauer options to
purchase 6,000 shares of Common Stock at an exercise price equal to the fair
market value of the Company's Common Stock on the date of grant.
On November 9, 1998, Charterhouse and the Company entered into a purchase
agreement (the "1998 Charterhouse Purchase Agreement") relating to, among other
things, the purchase of the Company's 8% Convertible Subordinated Debentures
due 2008 (the "1998 Debentures"). The aggregate amount of the outstanding
principal of, and all accrued interest on, the 1998 Debentures as of the date
of this information statement is approximately $83.8 million. In connection
with the transactions contemplated by the Purchase Agreement, Charterhouse and
the Company entered into an amended and restated purchase agreement, dated
April 14, 2000, as amended on May 26, 2000 (as amended, the "Amended
Charterhouse Purchase Agreement") providing for, effective as of the Closing,
amendments to the terms of the 1998 Debentures and restructuring of the
transactions contemplated by the 1998 Charterhouse Purchase Agreement. The
Amended Charterhouse Purchase Agreement is more fully described in the Proxy
Statement under the heading "Proposal No. 1: The Preferred Stock Transactions--
Other Agreements--Amended Charterhouse Purchase Agreement." Charterhouse Equity
Partners III, L.P., a Delaware limited partnership ("CEP III"), is the
principal member of Charterhouse. The general partner of CEP III is CHUSA
Equity Investors III, L.P., whose general partner is Charterhouse Equity III,
Inc., a wholly-owned subsidiary of Charterhouse International. Mr. Pfeffer
serves as a Senior Vice President of Charterhouse International. Mr. Berner
serves as a Managing Director of Charterhouse International. For a detailed
description of the interests of Charterhouse in the transactions contemplated
by the Purchase Agreement, see the information provided in the Proxy Statement
under the heading "Proposal No. 1: The Preferred Stock Transactions--the KPS
Transaction--Interests of Certain Persons in the KPS Transaction--Interests of
Charterhouse."
14
<PAGE>
Securities Beneficially Owned By Principal Stockholders And Management
The following table sets forth the beneficial ownership of the Common Stock
as of May 26, 2000 by (i) each stockholder known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock,
(ii) each director, (iii) each named executive officer (as defined in Item
402(a)(3) of Regulation S-K under the Exchange Act) and two other current
executive officers, and (iv) all current directors and executive officers as a
group. Unless otherwise indicated, each such person (alone or with family
members) has sole voting and dispositive power with respect to the shares
listed opposite such person's name. Except as otherwise indicated, the address
of each such person is c/o United Road Services, Inc., 17 Computer Drive West,
Albany, New York 12205.
<TABLE>
<CAPTION>
Number of
Beneficially-Owned Percent of
Name Shares Class(1)
---- ------------------ ----------
<S> <C> <C>
Gerald R. Riordan.......................... 3,077 *
Richard A. Molyneux........................ 2,000(2) *
Grace M. Hawkins........................... 2,000(2) *
Mark J. Henninger.......................... 38,429(3) 2.0
Edward W. Morawski......................... 69,227 3.6
Todd Q. Smart.............................. 30,927(4) 1.6
Merril M. Halpern(5)....................... -- --
Robert L. Berner, III(5)................... -- --
Michael S. Pfeffer(5)...................... -- --
Donald J. Marr............................. 11,999(2) *
Edward T. Sheehan(6)....................... 75,856(7) 3.9
Allan D. Pass, Ph.D(8)..................... 9,000(2) *
Robert J. Adams, Jr.(9).................... 4,500(2) *
Charter URS LLC............................ 539,176(10) 21.9
John David Floyd(11)....................... 129,371(12) 6.7
Michael A. Wysocki......................... 86,676(13) 4.5
Harold W. Borhauer II...................... 14,194 *
All directors and executive officers
as a group (12 persons)................... 258,529 13.3
</TABLE>
--------
* Less than one percent.
(1) The applicable percentage of ownership is based upon 1,921,077 shares of
Common Stock outstanding as of May 26, 2000.
(2) Consists entirely of shares issuable pursuant to options exercisable
within 60 days.
(3) Includes 666 shares issuable pursuant to options exercisable within 60
days and 37,762 shares held of record by the Henninger Family Revocable
Trust, dated January 21, 1999.
(4) Includes 666 shares issuable pursuant to options exercisable within 60
days.
(5) The address of this director is c/o Charterhouse Group International,
Inc., 535 Madison Avenue, New York, New York 10022.
(6) The address of this stockholder is 6 East Ridge Road, Loudonville, NY
12211.
(7) Includes 1,123 shares held by children of Mr. Sheehan. Mr. Sheehan
disclaims beneficial ownership of such shares. Also includes 70,400 shares
held of record by the Edward T. Sheehan 1992 Revocable Trust and 4,333
shares issuable pursuant to options exercisable within 60 days.
(8) The address of this stockholder is 10775 Babcock Blvd., Gibsonia, PA
15044.
(9) The address of this stockholder is 885 Beaverbrook Drive, Atlanta, GA
30318.
(10) Consists entirely of shares issuable upon conversion of the Debentures
held by Charterhouse. According to a Schedule 13D, dated as of December
7, 1998 and amended as of March 16, 1999, Charterhouse Equity Partners
III, L.P., a Delaware limited partnership ("CEP III"), is the principal
member of Charterhouse. The general partner of CEP III is CHUSA Equity
Investors III, L.P., whose general partner is Charterhouse Equity III,
Inc., a wholly-owned subsidiary of Charterhouse International. Each of
Charterhouse and CEP III has shared voting and dispositive power over the
shares held of record by Charterhouse and may be deemed to beneficially
own these shares. Mr. Halpern serves as Chairman of the board and Chief
Executive Officer of Charterhouse International. Mr. Berner serves as
Managing Director of Charterhouse International. Mr. Pfeffer serves as
Senior Vice President of Charterhouse International. Messrs. Halpern,
Berner and Pfeffer disclaim beneficial ownership with respect to the
shares held of record by Charterhouse. The address of Charterhouse is c/o
Charterhouse Group International, Inc., 535 Madison Avenue, New York, New
York 10022.
(11) The address of this stockholder is 219 Granite Court, Boulder City, NV
89005.
(12) Includes 450 shares issuable pursuant to options exercisable within 60
days.
(13) Includes 14,841 shares held by Translesco, Inc. of which Mr. Wysocki is
the majority owner.
15
<PAGE>
Common Stock Performance Graph
The following graph compares the percentage change in the Company's
cumulative total shareholder return on its Common Stock for the period during
which the Common Stock was registered under Section 12 of the Exchange Act
against the cumulative total return of the Nasdaq Total Return (U.S.) Index
(the "Nasdaq Index") and the cumulative total return of the Nasdaq
Transportation Index(1) (the "Transportation Index") for the same period. The
graph assumes an investment of $100 on May 1, 1998(2) in the Common Stock and
in the stocks comprising the Nasdaq Index and the Transportation Index, and
assumes reinvestment of dividends, if any.
[LINE GRAPH]
<TABLE>
<CAPTION>
May 1, December 31, December 31,
1998 1998 1999
------ ------------ ------------
<S> <C> <C> <C>
United Road Services, Inc................ 100 141 13
Nasdaq Index............................. 100 119 221
Transportation Index..................... 100 81 82
</TABLE>
--------
(1) The Transportation Index includes more than 100 railroads, trucking
companies, airlines, pipelines (except natural gas) and services such as
warehousing and travel arrangements.
(2) The Company's Common Stock began trading on the Nasdaq National Market on
May 1, 1998. Prior to May 1, 1998, the Common Stock was not publicly
traded. Comparative data is presented for the period beginning on May 1,
1998 and ending on December 31, 1999.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the Company's directors and
executive officers, and persons who own more than ten percent of the Company's
Common Stock, file with the SEC initial reports of ownership and reports of
changes in ownership of the Common Stock and other equity securities of the
Company. Officers, directors and greater than ten percent stockholders are also
required by SEC regulations to furnish the Company with copies of all Section
16(a) reports that they file with the SEC.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with, except that Mr. Riordan was late
in filing a Form 3 in connection with his commencement of employment with the
Company.
UNITED ROAD SERVICES, INC.
/s/ Gerald R. Riordan
Gerald R. Riordan
Chief Executive Officer
Date: June 13, 2000
16
