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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
United Road Services, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
UNITED ROAD SERVICES, INC.
17 Computer Drive West
Albany, New York 12205
April __, 2000
Dear Stockholder of United Road Services, Inc.:
You are invited to attend a special meeting of the stockholders (the
"Meeting") of United Road Services, Inc., a Delaware corporation (the
"Company"), to be held on Wednesday, May 3, 2000, beginning at [10:00 a.m.]
local time, at [the Albany Marriott, 189 Wolf Road, Albany, New York].
At the Meeting, you will be asked to approve an amendment to the
Company's Amended and Restated Certificate of Incorporation to effect a reverse
stock split of the Company's outstanding Common Stock, whereby the Company will
issue one new share of Common Stock in exchange for between four and ten shares
of the outstanding Common Stock.
The Company's Board of Directors believes that the reverse stock split
proposal is advisable and in the best interest of the Company and its
stockholders and recommends that the stockholders vote FOR this proposal.
The enclosed Notice and Proxy Statement contain details concerning the
reverse stock split proposal. We urge you to read and consider these documents
carefully. Whether or not you plan to be at the Meeting, please be sure to sign,
date and return the enclosed proxy card in the enclosed envelope as promptly as
possible so that your shares may be represented at the Meeting and voted in
accordance with your wishes. Your vote is important regardless of the number of
shares you own.
Sincerely,
Gerald R. Riordan
Chief Executive Officer and Secretary
<PAGE>
UNITED ROAD SERVICES, INC.
17 Computer Drive West
Albany, New York 12205
Notice of Special Meeting of Stockholders
to be Held
May 3, 2000
To the Stockholders of
UNITED ROAD SERVICES, INC.
Notice is hereby given that a Special Meeting of Stockholders (the
"Meeting") of United Road Services, Inc., a Delaware corporation (the
"Company"), will be held at [the Albany Marriott, 189 Wolf Road, Albany, New
York], on Wednesday, May 3, 2000, beginning at [10:00 a.m.] local time, to
consider and act upon the following proposal:
To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to effect a reverse stock split of
the Company's outstanding Common Stock, whereby the Company
will issue one new share of Common Stock in exchange for
between four and ten shares of the outstanding Common Stock.
The Board of Directors has fixed the close of business on March 22, 2000
as the record date for determining the stockholders entitled to notice of and to
vote at the Meeting. The reverse stock split proposal is more fully described in
the accompanying Proxy Statement, which forms a part of this Notice and should
be read carefully by all stockholders.
By Order of the Board of Directors,
Gerald R. Riordan
Chief Executive Officer and Secretary
April __, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND
MAIL THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED (WHICH REQUIRES NO POSTAGE
FOR MAILING IN THE UNITED STATES). A PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
<PAGE>
PRELIMINARY COPY - SUBJECT TO COMPLETION - DATED MARCH 30, 2000
UNITED ROAD SERVICES, INC.
17 Computer Drive West
Albany, New York 12205
__________________
Proxy Statement
for
Special Meeting of Stockholders to Be Held May 3, 2000
__________________
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of United Road Services, Inc., a Delaware
corporation (the "Company"), for use at the Special Meeting of Stockholders
scheduled for May 3, 2000 (the "Meeting"), beginning at [10:00 a.m.] local time,
at [the Albany Marriott, 189 Wolf Road, Albany, New York], to consider and act
upon the following proposal:
To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to effect a reverse stock split
of the Company's outstanding Common Stock, whereby the
Company will issue one new share of Common Stock in exchange
for between four and ten shares of the outstanding Common
Stock.
If the form of Proxy which accompanies this Proxy Statement is executed
and returned, it will be voted. A Proxy may be revoked at any time prior to the
voting thereof by written notice to the Secretary of the Company.
A majority of the outstanding shares entitled to vote at the Meeting and
represented in person or by proxy will constitute a quorum. Approval of the
reverse stock split proposal requires the affirmative vote of a majority of the
shares entitled to vote thereon. Abstentions and proxies relating to "street
name" shares for which brokers have not received voting instructions from the
beneficial owner ("Broker Non-Votes") will be counted to determine whether a
quorum is present. Both abstentions and Broker Non-Votes will be counted as part
of the total number of votes cast on the reverse stock split proposal in
determining whether the proposal has been approved by the stockholders. Thus,
both abstentions and Broker Non-Votes will have the effect of votes "against"
the proposal.
Expenses incurred in the solicitation of proxies will be borne by the
Company. Officers of the Company may make additional solicitations in person or
by telephone.
As of March 22, 2000, the Company had outstanding 17,851,649 shares of
Common Stock and such shares are the only shares entitled to vote at the
Meeting. Each share is entitled to one vote on each matter to be voted upon at
the Meeting.
This Proxy Statement and the accompanying proxy card are first being
mailed to the Company's stockholders on or about April ___, 2000.
<PAGE>
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of March 22, 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 Securities Act of 1933, as amended),
and (iv) all 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.
Number of
Beneficially-Owned Percent of
Name Shares Class(1)
- ---- ------------------- -----------
Gerald R. Riordan 30,770 *
Richard A. Molyneux 13,334(2) *
Grace M. Hawkins 20,000(2) *
Mark J. Henninger 384,291(3) 2.2
Edward W. Morawski 692,277 3.9
Todd Q. Smart 309,279(4) 1.7
Merril M. Halpern(5) -- --
Robert L. Berner, III(5) -- --
Michael S. Pfeffer(5) -- --
Donald J. Marr 119,999(2) *
Edward T. Sheehan(6) 758,569(7) 4.2
Allan D. Pass, Ph.D(8) 90,000(2) *
Robert J. Adams, Jr.(9) 45,000(2) *
Charter URS LLC 5,391,760(10) 23.2
All directors and executive officers
as a group (12 persons) 2,493,306 14.0
________________________
* Less than one percent.
(1) The applicable percentage of ownership is based upon 17,851,649 shares of
Common Stock outstanding as of March 22, 2000.
(2) Consists entirely of shares issuable pursuant to options exercisable within
60 days.
(3) Includes 6,667 shares issuable pursuant to options exercisable within 60
days and 377,624 shares held of record by the Henninger Family Revocable
Trust dated January 21, 1999.
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(4) Includes 6,667 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, Loudenville, NY
12211.
(7) Includes 11,235 shares held by children of Mr. Sheehan. Mr. Sheehan
disclaims beneficial ownership of such shares. Also includes 704,000 shares
held of record by the Edward T. Sheehan 1992 Revocable Trust and 43,334
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 Company's 8%
Convertible Subordinated Debentures due 2008 (the "Debentures") held by
Charter URS LLC, a Delaware limited liability company ("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 Group International, Inc., a Delaware corporation
("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.
REVERSE STOCK SPLIT PROPOSAL
The Board of Directors of the Company has unanimously approved a
proposal to amend the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") to effect a reverse stock
split of the Company's outstanding Common Stock on the terms described herein
(the "Reverse Stock Split"). The Board of Directors has declared the amendment
to the Certificate of Incorporation to be advisable and has recommended that the
amendment be presented to the stockholders of the Company for approval.
Except for adjustments that may result from the treatment of fractional
shares as described below, each stockholder will hold the same percentage of
Common Stock outstanding immediately following the Reverse Stock Split as such
stockholder held immediately prior to the Reverse Stock Split. If approved by
the stockholders of the Company as provided herein, the Reverse Stock Split will
be effected by an amendment to the Certificate of Incorporation in substantially
the form attached to this Proxy Statement as Appendix A (the "Reverse Stock
Split Amendment") and will become effective upon the filing of the Reverse Stock
Split Amendment with the Secretary of State of Delaware (the "Effective Date").
The following discussion is qualified in its entirety by the full text of the
Reverse Stock Split Amendment, which is hereby incorporated by reference herein.
On the Effective Date, the Reverse Stock Split will result in the automa
tic conversion of between four and ten shares (as determined by the Board of
Directors in the manner described
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<PAGE>
below) of issued and outstanding Common Stock into one share of Common Stock.
The Board believes that stockholder approval of an exchange ratio range, as
opposed to approval of a specified exchange ratio, in which the Reverse Stock
Split may be effected provides the Board with maximum flexibility to achieve the
purposes of the Reverse Stock Split. Fractional shares of Common Stock will not
be issued as a result of the Reverse Stock Split, but instead, any fractional
interests will be rounded up to the nearest whole share. Each stockholder
immediately prior to the Reverse Stock Split will continue to be a stockholder
immediately after the Reverse Stock Split.
If the Reverse Stock Split proposal is approved by the stockholders, the
Reverse Stock Split will be effected only upon a determination by the Board that
the Reverse Stock Split is in the best interest of the Company and its
stockholders at that time. Notwithstanding approval of the Reverse Stock Split
proposal by the stockholders of the Company, the Board may, in its sole
discretion, determine not to effect the Reverse Stock Split or to delay such
action based on the then-current trading price of the Common Stock or certain
other factors described herein. See "--Effect of the Reverse Stock Split
Proposal."
Dissenting stockholders have no appraisal rights under Delaware law, the
Company's Certificate of Incorporation or the Company's Amended and Restated By-
laws in connection with the approval of the Reverse Stock Split Amendment and
the consummation of the Reverse Stock Split.
Reasons for the Reverse Stock Split
The primary purpose of the Reverse Stock Split is to combine the
outstanding shares of Common Stock so that the Common Stock outstanding after
giving effect to the Reverse Stock Split trades at a significantly higher price
per share than the Common Stock outstanding before giving effect to the Reverse
Stock Split. The Company believes that this higher trading price will aid the
Company in remaining eligible for listing on the The Nasdaq Stock Market, Inc.
National Market (the "Nasdaq National Market").
The Company's Common Stock must maintain a minimum bid price of $5.00
per share in order to remain eligible for continued listing on the Nasdaq
National Market. On August 24, 1999, the staff (the "Staff") of the Nasdaq Stock
Market, Inc. ("Nasdaq") notified the Company that the bid price for its Common
Stock had been below $5.00 per share for a period of thirty consecutive days.
The Staff advised the Company that it would be given a period of ninety days
within which to comply with the minimum bid price requirement in order to
maintain its listing on the Nasdaq National Market. The Company was unable to
meet this requirement during the ninety-day period.
On January 20, 2000, in accordance with Nasdaq procedures,
representatives of the Company participated in a telephonic hearing with the
Staff in order to request a temporary exemption from the minimum bid price
requirement for continued listing on the Nasdaq National Market. In this
hearing, the Staff recommended that the Company implement a reverse stock
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split in order to satisfy the $5.00 minimum bid price requirement. On January
28, 2000, the Company advised the Staff that the Company would submit to its
stockholders for their approval a proposal to amend the Company's Certificate of
Incorporation to effect a reverse stock split of its Common Stock.
On February 14, 2000, the Staff advised the Company that the Company
would be permitted to maintain the listing of its Common Stock on the Nasdaq
National Market only if (i) the Company is able to evidence a closing bid price
of at least $5.00 per share no later than May 5, 2000, and (ii) the Company is
able to evidence a closing bid price of at least $5.00 per share for a minimum
of ten consecutive trading days immediately thereafter. The Company believes,
but cannot assure, that the Reverse Stock Split will enable the Common Stock to
trade above the $5.00 minimum bid price established by the Nasdaq listing
requirements for continued listing on the Nasdaq National Market (the "Nasdaq
National Market Listing Requirements") and to satisfy the minimum bid price
requirement for at least ten consecutive trading days thereafter.
The Company believes that maintaining the listing of its Common Stock on
the Nasdaq National Market is in the best interest of the Company and its
stockholders. Inclusion in the Nasdaq National Market increases liquidity and
may potentially minimize the spread between the "bid" and "asked" prices quoted
by market makers. Further, a Nasdaq National Market listing may enhance the
Company's access to capital and increase the Company's flexibility in responding
to anticipated capital requirements. The Company believes that prospective
investors will view an investment in the Company more favorably if its shares
qualify for listing on the Nasdaq National Market.
The Company also believes that the current per share price level of the
Common Stock has reduced the effective marketability of the Company's shares of
Common Stock because of the reluctance of many leading brokerage firms to
recommend low-priced stock to their clients. Certain investors view low-priced
stock as speculative and unattractive, although certain other investors may be
attracted to low-priced stock because of the greater trading volatility
sometimes associated with such securities. In addition, a variety of brokerage
house policies and practices tend to discourage individual brokers within those
firms from dealing in low-priced stock. Such policies and practices pertain to
the payment of brokers commissions and to time-consuming procedures that
function to make the handling of low-priced stocks unattractive to brokers from
an economic standpoint.
In addition, because brokerage commissions on low-priced stock generally
represent a higher percentage of the stock price than commissions on higher-
priced stock, the current share price of the Common Stock can result in
individual stockholders paying transaction costs (commissions, markups or
markdowns) that represent a higher percentage of their total share value than
would be the case if the share price were substantially higher. This factor also
may limit the willingness of institutions to purchase the Common Stock at its
current low share price.
In addition, if the Common Stock is not listed on the Nasdaq National
Market and the trading price of the Common Stock were to remain below $5.00 per
share, trading in the Common Stock would also be subject to the requirements of
certain rules promulgated under the Exchange Act which require additional
disclosures by broker-dealers in connection with any trades involving a stock
defined as a "penny stock" (generally, a non-Nasdaq equity security that
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has a market price of less than $5.00 per share, subject to certain exceptions).
In such event, the additional burdens imposed upon broker-dealers to effect
transactions in the Common Stock could further limit the market liquidity of the
Common Stock and the ability of investors to trade the Common Stock.
As discussed below, in the event that the Common Stock is delisted from
the Nasdaq National Market, the Company may not qualify for listing on the
Nasdaq SmallCap Market. See "--Other Nasdaq Requirements." In such an event,
sales of the Common Stock would likely be conducted only in the over-the-counter
market or potentially in regional exchanges. This may have a negative impact on
the liquidity and price of the Common Stock and investors may find it more
difficult to purchase or dispose of, or to obtain accurate quotations as to the
market value of, the Common Stock.
For all the above reasons, the Company believes that the Reverse Stock
Split is in the best interests of the Company and its stockholders. There can be
no assurance, however, that the Reverse Stock Split will have the desired
consequences. There can also be no assurance that the market capitalization of
the Common Stock after the proposed Reverse Stock Split will be equal to the
market capitalization before the proposed Reverse Stock Split.
Effect of the Reverse Stock Split Proposal
Although the Company expects to file the Reverse Stock Split Amendment
with the Delaware Secretary of State's office promptly following approval of the
Reverse Stock Split proposal at the Meeting, the actual timing of such filing
will be determined by the Board of Directors based upon its evaluation as to
when such action is most advantageous to the Company and its stockholders.
Further, notwithstanding approval of the Reverse Stock Split proposal by the
stockholders of the Company, the Board of Directors may elect not to file the
Reverse Stock Split Amendment.
In the event that the Board of Directors determines to effect the
Reverse Stock Split, the Board will set the exchange ratio for the Reverse Stock
Split based upon, among other things, the following factors: (i) the Nasdaq
Listing Requirements, (ii) the then-current trading price of the Common Stock,
and (iii) the advice of the Company's advisors.
After the Effective Date of the Reverse Stock Split, each stockholder
will own a reduced number of shares of Common Stock but will hold the same
percentage of the outstanding shares (subject to adjustments for fractional
interests resulting from the Reverse Stock Split) as such stockholder held prior
to the Effective Date. Each stockholder of the Company immediately before the
Effective Date will continue to be a stockholder immediately after the Effective
Date. The number of shares of Common Stock that may be purchased upon the
exercise of outstanding options, warrants, and other securities convertible
into, or exercisable or exchangeable for, shares of Common Stock, and the per
share exercise or conversion prices thereof, will be adjusted appropriately with
respect to the Reverse Stock Split in accordance with their terms as of the
Effective Date.
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The Reverse Stock Split may also result in some stockholders owning "odd
lots" of less than 100 shares of Common Stock received as a result of the
Reverse Stock Split. Brokerage commissions and other costs of transactions in
odd lots may be higher, particularly on a per-share basis, than the cost of
transactions in even multiples of 100 shares.
The par value of the Common Stock will be increased from $0.001 to $__
per share following the Reverse Stock Split and the number of shares of the
Common Stock outstanding will be reduced. As a consequence, the aggregate par
value of the outstanding Common Stock will not change. The Reverse Stock Split
will not affect the Company's total stockholders' equity. All share and per
share information will be retroactively adjusted following the Effective Date to
reflect the Reverse Stock Split for all periods presented in future filings.
The Board considered reducing the number of shares of authorized Common
Stock in connection with the Reverse Stock Split but determined that the
availability of additional shares may be beneficial to the Company in the
future. The availability of additional authorized shares will allow the Board to
issue shares for corporate purposes, if appropriate opportunities should arise,
without further action by stockholders or the time delay involved in obtaining
stockholder approval (except to the extent that approval is otherwise required
by applicable law). Such purposes could include meeting requirements for working
capital or capital expenditures or, depending on market conditions, effecting
future acquisitions of other businesses, through the issuance of shares. In
addition, if another party should seek to acquire or take over control of the
Company and the Board does not believe such transaction is in the best interest
of the Company and its stockholders, some or all of the authorized shares could
be issued to another party to try to block the transaction. In this regard, it
should be noted that the Common Stock has no preemptive rights.
Based on the 17,851,649 shares of Common Stock outstanding as of March
22, 2000, the following table reflects the approximate percentage reduction in
the outstanding shares of Common Stock and the approximate number of shares of
Common Stock that would be outstanding as a result of the Reverse Stock Split,
based on the exchange ratio range included in the Reverse Stock Split:
Split Exchange Ratio Percentage Reduction Resulting Shares Outstanding
- -------------------- -------------------- ----------------------------
1 for 4 75% 4,462,912
1 for 5 80% 3,570,330
1 for 6 83.3% 2,981,225
1 for 7 85.7% 2,552,786
1 for 8 87.5% 2,231,456
1 for 9 88.9% 1,981,533
1 for 10 90% 1,785,165
The Reverse Stock Split will affect all stockholders equally and will
not affect any stockholder's proportionate equity interest in the Company
(except with respect to adjustments for fractional interests). None of the
rights currently accruing to holders of the Common Stock, options or warrants to
purchase Common Stock, or securities convertible into Common Stock will be
affected by the Reverse Stock Split. Following the Reverse Stock Split, each
share of the Common Stock resulting from the Reverse Stock Split will entitle
the holder thereof to one vote
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per share and will otherwise be identical to the outstanding Common Stock
immediately prior to the Effective Date.
Exchange of Stock Certificates; No Fractional Shares
The combination and reclassification of shares of Common Stock pursuant
to the Reverse Stock Split will occur automatically on the Effective Date
without any action on the part of stockholders of the Company and without regard
to the date on which certificates evidencing shares of Common Stock prior to the
Reverse Stock Split are physically surrendered for new certificates. As of the
Effective Date, every four to ten shares of issued and outstanding Common Stock
will be converted and reclassified into one share of post-split Common Stock.
For example, a holder of 100 shares immediately prior to the Effective Date
would hold between 10 and 25 shares after the Effective Date. Fractional shares
of Common Stock will not be issued as a result of the Reverse Stock Split, but
instead, any fractional interests will be rounded up to the nearest whole share.
Each stockholder immediately prior to the Reverse Stock Split will continue to
be a stockholder immediately after the Reverse Stock Split.
As soon as practicable after the Effective Date, transmittal forms will
be mailed to each holder of record of shares of Common Stock, to be used in
forwarding such holder's stock certificates for surrender and exchange for
certificates evidencing the number of shares of Common Stock such stockholder is
entitled to receive as a consequence of the Reverse Stock Split. The transmittal
forms will be accompanied by instructions specifying other details of the
exchange. Upon receipt of such transmittal form, each stockholder should
surrender the certificates evidencing shares of Common Stock prior to the
Reverse Stock Split in accordance with the applicable instructions. Each holder
who surrenders certificates will receive new certificates evidencing the whole
number of shares of Common Stock that such stockholder holds as a result of the
Reverse Stock Split including shares resulting from the rounding up of any
fractional shares. Stockholders will not be required to pay any transfer fee or
other fee in connection with the exchange of certificates.
STOCKHOLDERS SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES FOR EXCHANGE
UNTIL THEY RECEIVE A TRANSMITTAL FORM FROM THE COMPANY.
As of the Effective Date, each certificate representing shares of Common
Stock outstanding prior to the Effective Date will be deemed canceled and, for
all corporate purposes, will be deemed only to evidence the right to receive the
number of shares of Common Stock into which the shares of Common Stock evidenced
by such certificate have been converted as a result of the Reverse Stock Split.
Other Nasdaq Requirements
In addition to the $5.00 minimum bid price per share requirement
described above, the continued listing of the Common Stock on the Nasdaq
National Market is subject to the maintenance of the other quantitative and
qualitative requirements set forth in the Nasdaq
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National Market Listing Requirements. In particular, the Nasdaq National Market
Listing Requirements require that a company currently included in the Nasdaq
National Market meet each of the following standards to maintain its continued
listing:
Nasdaq National Market Listing Considerations:
---------------------------------------------
(1) either (a) a market capitalization of $50,000,000, or (b) total
assets of $50,000,000 and total revenue of $50,000,000 in the most
recently completed fiscal year or two of the three most recently
completed fiscal years;
(2) a public float of 1,100,000 shares;
(3) a market value of public float of $15,000,000;
(4) a minimum bid price of $5 per share;
(5) 400 round lot shareholders;
(6) four market makers; and
(7) compliance with Nasdaq corporate governance rules.
Although the Company believes that it will meet each of these
requirements as of the first full trading day after the Effective Date, there
can be no assurance that such will be the case or that other factors will not
cause the Company to fail to meet such requirements.
In the event that the Company is unable to satisfy the requirements for
continued listing on the Nasdaq National Market, the Company may not be able to
satisfy the requirements for listing on the Nasdaq SmallCap Market on an ongoing
basis either before or after the Reverse Stock Split. The requirements for
listing on the Nasdaq SmallCap Market are listed below:
Nasdaq SmallCap Market Listing Considerations:
---------------------------------------------
(1) either (a) net tangible assets of $2,000,000, (b) net income in two
of the last three years of $500,000, or (c) a market capitalization
of $35,000,000;
(2) a public float of 500,000 shares;
(3) a market value of public float of $1,000,000;
(4) a minimum bid price of $1.00 per share;
(5) two market makers;
(6) 300 round lot shareholders; and
(7) compliance with Nasdaq corporate governance rules.
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Accordingly, the Company believes that the Reverse Stock Split
represents the Company's best opportunity to remain listed on Nasdaq.
Federal Income Tax Consequences
The following discussion of the material federal income tax consequences
of the Reverse Stock Split is based upon the Internal Revenue Code of 1986, as
amended, Treasury regulations thereunder, judicial decisions and current
administrative rulings and practices, all as in effect on the date hereof and
all of which could be repealed, overruled or modified at any time, possibly with
retroactive effect. No ruling from the Internal Revenue Service (the "IRS") with
respect to the matters discussed herein has been requested and there is no
assurance that the IRS would agree with the conclusions set forth in this
discussion.
This discussion may not address certain federal income tax consequences
that may be relevant to particular stockholders in light of their personal
circumstances or to certain types of stockholders (such as dealers in
securities, insurance companies, foreign individuals and entities, financial
institutions and tax-exempt entities) that may be subject to special treatment
under the federal income tax laws. This discussion also does not address any tax
consequences under state, local or foreign laws.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT.
Except as discussed below, no gain or loss should be recognized by a
stockholder who receives only Common Stock in connection with the transactions
contemplated by the Reverse Stock Split. The aggregate tax basis of the shares
of Common Stock held by a stockholder following the Reverse Stock Split will
equal the stockholder's aggregate basis in the Common Stock held immediately
prior to the Reverse Stock Split and generally will be allocated among the
shares of Common Stock held following the Reverse Stock Split on a pro-rata
basis. Stockholders who have used the specific identification method to identify
their basis in shares of Common Stock combined in the Reverse Stock Split should
consult their own tax advisors to determine their basis in the shares of Common
Stock received in exchange therefor in the Reverse Stock Split. Shares of Common
Stock received should have the same holding period as the Common Stock
surrendered.
The Board of Directors unanimously recommends that you vote
FOR the Reverse Stock Split proposal.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
The Board of Directors of the Company knows of no other business which
may come before the Meeting. However, if any other matters are properly
presented to the Meeting or any
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<PAGE>
adjournment thereof, the persons named in the proxies will vote upon them in
accordance with their best judgment.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal relating to the Company's Annual Meeting of
Stockholders to be held in 2000 must be received at the Company's executive
offices no later than December 29, 1999, for evaluation as to inclusion in the
proxy statement in connection with such meeting.
Under the Bylaws, in order for a stockholder to propose business
(including to nominate a candidate for director) to be considered at an annual
meeting of stockholders, timely written notice of such business must be given to
the Company's Secretary. To be timely with respect to the Company's Annual
Meeting of Stockholders to be held in 2000, such notice must be received at the
principal executive offices of the Company between February 23 and March 25,
2000 (except in the event that the date of such annual meeting is prior to April
24, 2000 or after July 23, 2000, in which event a stockholder's notice must be
so delivered not earlier than the 90th day prior to the date of the annual
meeting and not later than the 60th day prior to such date or the 10th day
following the day on which public announcement of the date of such meeting is
first made by the Company). Such notice must provide the information specified
in the Bylaws regarding the stockholder giving the notice and the nature of the
business to be proposed or the candidate to be nominated. Such notice is
separate from and in addition to the requirements a stockholder must meet to
have a proposal included in the Company's proxy statement.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE SIGN THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
Gerald R. Riordan
Chief Executive Officer and Secretary
Date: April __, 2000
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<PAGE>
Appendix A
----------
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
UNITED ROAD SERVICES, INC.
The undersigned, the Chief Executive Officer of United Road Services,
Inc., a Delaware corporation (the "Corporation"), does hereby certify as
follows:
1. The name of the Corporation is United Road Services, Inc.
2. Article FOURTH of the Corporation's Amended and Restated Certificate
of Incorporation (the "Certificate of Incorporation") is hereby amended as
follows:
(a) By replacing the second sentence of Article FOURTH with the
following: The total number of shares which the corporation shall have
the authority to issue is 40,000,000 shares of capital stock divided
into (a) 35,000,000 shares of Common Stock having a par value of $____
per share, and (b) 5,000,000 shares of Preferred Stock having a par
value of $0.001 per share.
(b) By adding to the end of the second sentence of Article FOURTH,
the following:
Simultaneously with the effective date of this Certificate of Amendment
(the "Effective Date"), all issued and outstanding shares of Common Stock
("Existing Common Stock") shall be and hereby are automatically combined and
reclassified as follows: each _____ shares of Existing Common Stock shall be
combined and reclassified (the "Reverse Split") as one share of issued and
outstanding Common Stock ("New Common Stock"), provided that there shall be no
fractional shares of New Common Stock. In the case of any holder of fewer than
____ shares of Existing Common Stock or any number of shares of Existing Common
Stock which, when divided by ____, does not result in a whole number (a
"Fractional Share Holder"), the fractional share interest of New Common Stock
held by such Fractional Share Holder as a result of the Reverse split shall be
rounded up to the nearest whole share of new Common Stock.
The Corporation shall, through its transfer agent, provide certificates
representing New Common Stock to holders of Existing Common Stock in
<PAGE>
exchange for certificates representing Existing Common Stock. From and after the
Effective Date, certificates representing shares of Existing Common Stock are
hereby canceled and shall represent only the right of the holders thereof to
receive New Common Stock.
From and after the Effective Date, the term "New Common Stock" as used
in this Article FOURTH shall mean Common Stock as provided in the Certificate of
Incorporation.
3. The foregoing amendment was duly approved and adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware and the By-Laws of the Corporation at a meeting of the Board of
Directors of the Corporation on May __, 2000, at which a quorum was present and
acting throughout. The Board of Directors declared the advisability of the
amendment and directed that the amendment be submitted to the stockholders of
the Corporation for approval.
4. At a Special Meeting of the Stockholders of the Corporation held on
May 3, 2000, duly called and held in accordance with the provisions of Section
222 of the General Corporation Law of the State of Delaware, a majority of the
shares of the outstanding Common Stock entitled to vote thereon were voted in
favor of the amendment in accordance with Section 242 of the General Corporation
Law of the State of Delaware.
5. This amendment shall be effective on the date this Certificate of
Amendment is filed and accepted by the Secretary of State of the State of
Delaware.
The undersigned, being the Chief Executive Officer of the Corporation,
for purposes of amending its Certificate of Incorporation pursuant to the
General Corporation Law of the State of Delaware, acknowledges that it is his
act and deed and that the facts stated herein are true, and has signed this
instrument on May __, 2000.
UNITED ROAD SERVICES, INC.
By: _______________________________
Gerald R. Riordan
Chief Executive Officer
ATTEST:
_________________________
Donald J. Marr
Chief Financial Officer
2
<PAGE>
(front of card)
PROXY CARD
UNITED ROAD SERVICES, INC.
Special Meeting of Stockholders
May 3, 2000
The undersigned hereby appoints Gerald R. Riordan and Donald J. Marr (the
"Proxies"), and each of them, attorneys and proxies of the undersigned, each
with power of substitution and resubstitution, to attend, vote and act for the
undersigned at the Special Meeting of Stockholders (the "Meeting") of United
Road Services, Inc. (the "Company") to be held on May 3, 2000 at 10:00 a.m.
Eastern Daylight Time at [the Albany Marriott at 189 Wolf Road, Albany, New York
12205]. The Proxies shall cast votes according to the number of shares of the
Company which the undersigned may be entitled to vote with respect to the
proposal set forth on the reverse, in accordance with the specification
indicated, if any, and shall have all the powers which the undersigned would
possess if personally present. The undersigned hereby revokes any prior proxy to
vote at the Meeting, and hereby ratifies and confirms all that said Proxies, or
any of them, may lawfully do by virtue hereof and thereof.
(Continued and to be signed on the reverse side)
<PAGE>
(reverse side of card)
THIS PROXY WILL BE VOTED REVERSE STOCK SPLIT PROPOSAL. The
AS SPECIFIED AT RIGHT Company's Amended and Restated
WITH RESPECT TO THE Certificate of Incorporation is
ACTIONS TO BE TAKEN ON to be amended to effect a reverse
THE FOLLOWING PROPOSAL. stock split of the Company's
IN THE ABSENCE OF ANY outstanding Common Stock, whereby
SPECIFICATION, THIS PROXY the Company will issue one new
WILL BE VOTED IN FAVOR OF share of Common Stock in exchange
THE PROPOSAL. for between four and ten shares of
the outstanding Common Stock.
[ ] Vote FOR the proposal
[ ] Vote WITHHELD from the proposal
If any other matters properly come before the
Meeting or any adjournment thereof, this proxy
will be voted according to the judgment of the
persons named on the reverse side as Proxies.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF
THE NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
THE COMPANY AND THE PROXY STATEMENT DATED APRIL
__, 2000.
THIS PROXY IS SOLICITED AND PROPOSED BY THE
BOARD OF DIRECTORS OF THE COMPANY, WHICH
UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Signature___________________ Signature___________________ Dated _____________
IF HELD JOINTLY
Note: For shares held jointly, each joint owner should personally sign. If
signing as executor, or in any other representative capacity, or as an
officer of a corporation, please indicate your full title as such.
