<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Emons Transportation Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
EMONS TRANSPORTATION GROUP, INC.
96 SOUTH GEORGE STREET
YORK, PENNSYLVANIA 17401
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders to be held at 9:00 a.m., on November 20, 1997
at The Yorktowne Hotel, 48 East Market Street, York, Pennsylvania 17401 (the
"Meeting").
I look forward to greeting you personally. The accompanying Proxy Statement
describes the matters to be acted on at the Meeting, and I urge you to read it
carefully.
At the Meeting, your Board of Directors is recommending the election of
seven directors and the appointment of Arthur Andersen LLP as independent
public accountants. Your Board of Directors believes that the election of the
seven directors and the appointment of Arthur Andersen LLP as independent
public accountants are in the best interests of all stockholders and has
unanimously recommended that you vote "FOR" both proposals.
It is important that your shares be represented at the Meeting regardless of
the number of shares you may hold. In order for your vote to be counted, you
must sign, date and return the enclosed proxy card or attend the meeting in
person. I urge you to sign and return the enclosed proxy card promptly.
Sincerely,
/s/ Robert Grossman
Robert Grossman
Chairman and President
York, Pennsylvania
October 15, 1997
<PAGE>
EMONS TRANSPORTATION GROUP, INC.
96 SOUTH GEORGE STREET
YORK, PENNSYLVANIA 17401
----------------
NOTICE OF 1997 ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD NOVEMBER 20, 1997
----------------
TO THE STOCKHOLDERS OF
EMONS TRANSPORTATION GROUP, INC.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of Emons
Transportation Group, Inc. (the "Company") will be held on Thursday, November
20, 1997, at 9:00 a.m., local time, at The Yorktowne Hotel, 48 East Market
Street, York, Pennsylvania 17401, for the following purposes:
(1) To elect seven directors of the Company to serve for the ensuing year
and until their successors are elected and qualified;
(2) To ratify the appointment of Arthur Andersen LLP as independent
public accountants to examine the financial statements of the Company for
its 1998 fiscal year; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Provision is made on the enclosed proxy card(s) for your direction as to the
matters set forth as items 1 and 2 above.
Only holders of the Company's Common Stock and $.14 Series A Cumulative
Convertible Preferred Stock of record at the close of business on October 1,
1997 are entitled to receive notice of and to vote at the Annual Meeting of
Stockholders and at all adjournments thereof.
A copy of the Company's Annual Report to Stockholders for the year ended
June 30, 1997 is enclosed herewith.
Whether or not you plan to attend the meeting in person, you are urged to
fill out, sign and mail promptly the enclosed proxy in the accompanying
envelope on which no postage is required if mailed in the United States.
By Order of the Board of Directors
/s/ Scott F. Ziegler
----------------------------------
Scott F. Ziegler
Secretary
York, Pennsylvania
October 15, 1997
<PAGE>
EMONS TRANSPORTATION GROUP, INC.
96 SOUTH GEORGE STREET
YORK, PENNSYLVANIA 17401
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 20, 1997
----------------
SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (sometimes hereinafter referred to as the
"Board") of Emons Transportation Group, Inc. (the "Company"), to be voted at
the annual meeting of stockholders to be held on November 20, 1997 (the
"Meeting"), at 9:00 a.m., local time, at The Yorktowne Hotel, 48 East Market
Street, York, Pennsylvania 17401, and at any postponement or adjournments
thereof, for the purposes set forth in the foregoing notice of the Meeting.
This Proxy Statement and the enclosed proxy are being sent to stockholders
commencing on or about October 15, 1997.
Solicitation will be primarily by mail but may also be made by personal
interview or by telephone, in each case by officers and regular employees of
the Company who will not be additionally compensated therefor. The Company
will request persons such as brokers, nominees and fiduciaries, holding stock
in their names for others, or holding stock for others who have the right to
give voting instructions, to forward proxy material to their principals and
request authority for the execution of the proxy. The total cost of soliciting
proxies will be borne by the Company.
VOTING
Holders of record at the close of business on October 1, 1997 (the "Record
Date") of common stock, par value $.01 per share, of the Company ("Common
Stock") and $.14 Series A Cumulative Convertible Preferred Stock of the
Company ("Convertible Preferred Stock") will be entitled to vote at the
Meeting.
On the Record Date, there were 5,901,313 shares of Common Stock and
1,547,676 shares of Convertible Preferred Stock outstanding. Each share of
Common Stock and Convertible Preferred Stock outstanding on the Record Date
will be entitled to one vote at the Meeting, with the Common Stock and
Convertible Preferred Stock voting together as a single class. Holders of
Common Stock and Convertible Preferred Stock are not entitled to cumulate
their votes on any matter to be considered at the Meeting. The presence at the
Meeting, in person or by proxy, of the holders of a majority of the total
number of shares of Common Stock and Convertible Preferred Stock outstanding
on the Record Date constitutes a quorum for the transaction of business by
such holders at the Meeting.
At the Meeting, abstentions and broker non-votes (as hereinafter defined)
will be counted as present for the purpose of determining the presence of a
quorum. For the purpose of computing the vote required for approval of matters
to be voted on at the Meeting, shares held by stockholders who abstain from
voting will be treated as being "present" and "entitled to vote" on the matter
and, thus, an abstention has the same legal effect as a vote against the
matter, except that abstentions will have no effect on the election of
directors of the Company. However, in the case of a broker non-vote as to a
particular matter, such shares will not be treated as "present" and "entitled
to vote" on the matter and, thus, a broker non-vote will have no effect on the
outcome of the vote on the matter, except that, in the case of any matter
which requires the affirmative vote of a majority of the outstanding stock
entitled to vote, a broker non-vote will have the same legal effect as a vote
against the matter. A "broker non-vote" refers to shares represented at the
Meeting in person or by proxy by a broker or nominee
1
<PAGE>
where such broker or nominee (i) has not received voting instructions on a
particular matter from the beneficial owners or persons entitled to vote and
(ii) the broker or nominee does not have the discretionary voting power on
such matter.
The holder of 1,400,510 shares of Common Stock and 615,429 shares of
Convertible Preferred Stock (or approximately 24% and 40% of the outstanding
Common Stock and Convertible Preferred Stock, respectively, entitled to vote
at the Meeting) has advised the Company that it intends to vote such shares,
in person or by proxy, proportionally in accordance with the votes cast by the
other holders of the outstanding Common Stock and Convertible Preferred Stock.
The holder holds such shares as escrow agent for holders of claims and
interests in Emons Industries, Inc., a direct wholly-owned subsidiary of the
Company ("Industries"), pursuant to the Second Amended and Restated Joint Plan
of Reorganization of Industries and ET Railcar Corporation dated November 10,
1986, and in such capacity has the right to vote such shares. See "PRINCIPAL
STOCKHOLDERS OF THE COMPANY".
Proxies in the enclosed form are solicited by the Board of Directors of the
Company in order to provide every stockholder an opportunity to vote on all
matters scheduled to come before the Meeting, whether or not the stockholder
attends in person. If proxies in the enclosed form are properly executed and
returned, the shares represented thereby will be voted at the Meeting in
accordance with the stockholder's directions. IN THE ABSENCE OF SPECIFIC
DIRECTIONS, PROPERLY EXECUTED PROXIES WILL BE VOTED "FOR" THE ELECTION OF
SEVEN DIRECTORS AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS. A STOCKHOLDER WHO SUBMITS A
PROXY MAY REVOKE IT AT ANY TIME PRIOR TO THE VOTING OF THE PROXY BY WRITTEN
NOTICE TO THE SECRETARY OF THE COMPANY OR BY ATTENDING THE MEETING AND VOTING
SUCH STOCKHOLDER'S SHARES IN PERSON.
ELECTION OF DIRECTORS
The by-laws of the Company provide that the number of directors of the
Company shall be determined by the Board of Directors. The Board has set the
number of directors at seven. The directors are to be elected at the Meeting
by the holders of Common Stock and Convertible Preferred Stock, to hold office
until their successors have been elected and qualified. It is intended that,
unless authorization to do so is withheld, the proxies will be voted "FOR" the
election of the nominees named below. Five of the seven nominees are now
directors of the Company. Each nominee has consented to be named in this Proxy
Statement and to serve as a director if elected. However, if any nominee shall
become unable to stand for election as a director at the Meeting, an event not
now anticipated by the Board, the proxy will be voted for a substitute
designated by the Board.
The nominees are listed on the following pages with brief statements of
their principal occupations and other information. Five of the nominees for
director named below were elected by the stockholders to their present terms
as directors at the annual meeting in 1996 and two are standing for election
for the first time.
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NOMINEE AGE OCCUPATION SINCE*
------- --- ---------- --------
<S> <C> <C> <C>
Michael J. Blake........ 54 Chairman of MedVision, Inc., Vallon, Inc., **
EdView, Inc. and Robinson, Blake & George, Inc.
Robert Grossman......... 56 Chairman of the Board, Chief Executive Officer 1972
and President of the Company
Kimberly A. Madigan..... 41 Principal of Chambers,Conlon & Hartwell 1995
Robert J. Smallacombe... 64 President and Chief Executive Officer of 1983
Executive Advisory Group Ltd.
Alfred P. Smith......... 43 Assistant Chief of Transportation of Canadian 1992
National Railway Company
Dean H. Wise............ 43 Partner at Carlisle, Fagan, Gaskins &Wise, Inc. 1996
Scott F. Ziegler........ 41 Vice President-Finance, Controller and Secretary **
of the Company
</TABLE>
- --------
* Dates set forth in this column include periods served as director of
Industries prior to the creation of the Company in 1986.
** Standing for election for the first time.
MICHAEL J. BLAKE. Mr. Blake has been Chairman of Robinson, Blake & George,
Inc., an investments firm, since December, 1992, Chairman of MedVision, Inc.,
a telemedicine company, since April, 1994, Chairman of Vallon, Inc., a Website
developer, since November, 1995, and Chairman of EdView, Inc., a software
developer, since January, 1997. Mr. Blake has also been a Director of the
Minneapolis Grain Exchanges, a futures exchange, since October, 1990. Mr.
Blake was a Director of BDS Communications, Inc. from August, 1991 to
February, 1996. Mr. Blake was also Chairman of MedIntell Systems Corporation
from July, 1993 to April, 1995.
ROBERT GROSSMAN. Mr. Grossman, who devotes all of his business time to the
affairs of the Company, has been a Director and the Chairman of the Board and
Chief Executive Officer of the Company since its inception in December, 1986
and was President of the Company until September, 1996. In September, 1997,
Mr. Grossman reassumed the position of President of the Company. He is now,
and for more than five years has been, the Chairman of the Board, President,
or Chief Executive Officer of each direct or indirect wholly-owned subsidiary
of the Company except for Emons Finance Corp. Mr. Grossman has held various
offices with the Company and its subsidiaries since 1971.
KIMBERLY A. MADIGAN. Ms. Madigan has been a Principal of Chambers, Conlon &
Hartwell, a company which consults on transportation and government relations
issues, since December, 1993. Ms. Madigan also serves as the President of the
National Railroad Construction and Maintenance Association. Ms. Madigan was a
member of the National Mediation Board, which directs the actions and policies
of the government agency charged with the administration of the Railway Labor
Act, from August, 1990 to July, 1992 and Chairman of the National Mediation
Board from July, 1992 to December, 1993.
ROBERT J. SMALLACOMBE. Mr. Smallacombe has been President and Chief
Executive Officer of Executive Advisory Group Ltd., a consulting and
management services firm, since March, 1986. From June, 1996 through May,
1997, Mr. Smallacombe has served as a Director for Northstar Rehabilitation,
Inc., located in Indiana, Pennsylvania, and Chairman of its Audit Committee.
He also served as its Chief Executive Officer from April through May, 1997.
Mr. Smallacombe has been a Director of Allied Devices Corporation, located in
Baldwin, New York, since July, 1996. He was President and Chief Operating
Officer of O'Brien Environmental Energy, Inc., from September, 1994 to May,
1996. On September 28, 1994, O'Brien Environmental Energy, Inc., filed a
voluntary petition for reorganization under Chapter 11 of the United States
Bankruptcy Code with the United States Bankruptcy Court for the District of
New Jersey. From February, 1993 to May, 1994 Mr. Smallacombe was Chief
Executive Officer of Cardinal Publishing, a publisher of church bulletins.
3
<PAGE>
ALFRED P. SMITH. Mr. Smith has been Assistant Chief of Transportation of
Canadian National Railway Company since September, 1997. Mr. Smith was the
President and Chief Operating Officer of the Company from September, 1996 to
September, 1997 and the President of the Maryland and Pennsylvania Railroad
Company from January, 1987 to September, 1997 and Yorkrail, Inc. from
December, 1987 to September, 1997. Mr. Smith was the President and Chief
Operating Officer of Maine Intermodal Transportation, Inc. from 1994 to
September, 1997 and St. Lawrence & Atlantic Railroad Company from May, 1989 to
September, 1997. Mr. Smith was Executive Vice President of the Company from
September, 1992 to September, 1996 and was Vice President of the Company from
January, 1987 to September, 1992.
DEAN H. WISE. Mr. Wise has been a Partner since April, 1995, with Carlisle,
Fagan, Gaskins & Wise, Inc., a management consulting firm based in Concord,
Massachusetts specializing in transportation and logistics services. Mr. Wise
held various positions, most recently as Vice President, at Mercer Management
Consulting, Inc., a management consulting firm, from July, 1983, until March,
1995.
SCOTT F. ZIEGLER. Mr. Ziegler has been Vice President-Finance, Controller
and Secretary of the Company since November, 1996 and was Vice President,
Controller and Secretary from January, 1993 until September, 1996. Mr. Ziegler
was the Director of Finance of Master Power, Inc., a power tools manufacturing
company, from December, 1987 to January, 1993. Mr. Ziegler has also been Vice
President-Finance, Controller and Secretary of each of the Company's
subsidiaries except for Emons Finance Corp. since November, 1996, and was Vice
President, Controller and Secretary of each of the Company's subsidiaries
except for Emons Finance Corp. from January, 1993 to November, 1996.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has three standing committees: an Audit Committee, a
Management Compensation Committee and an Executive Committee.
AUDIT COMMITTEE. The Audit Committee is charged with recommending
appointment of the independent auditors, consulting with the independent
auditors and reviewing the results of internal audits, independent audits, and
the audit report with the independent auditors engaged by the Company.
Further, the Audit Committee is empowered to make independent investigations
and inquiries into all financial reporting or other financial matters of the
Company, as it deems necessary. The members of the Audit Committee are
Kimberly A. Madigan, Robert J. Smallacombe and Dean H. Wise.
MANAGEMENT COMPENSATION COMMITTEE. The Management Compensation Committee
reviews, and recommends to the Board of Directors, the compensation of
executive officers of the Company and reviews and recommends to the Board of
Directors the adoption of any compensation plans in which officers are
eligible to participate. The Management Compensation Committee also
administers the Company's 1996 and 1986 Stock Option Plans, Incentive
Compensation Plan and 1991 Restricted Stock Plan. The members of the
Management Compensation Committee are Kimberly A. Madigan, Robert J.
Smallacombe and Dean H. Wise.
EXECUTIVE COMMITTEE. The Executive Committee has general authority over the
supervision and direction of the finances and business of the Company and has
the power and authority of the Board of Directors, except as limited by the
Company's Certificate of Incorporation, in the management of the business and
affairs of the Company between meetings of the Board of Directors. The members
of the Executive Committee are Robert Grossman, Alfred P. Smith and Kimberly
A. Madigan.
4
<PAGE>
During the fiscal year ended June 30, 1997, the Board of Directors of the
Company held four regularly scheduled meetings, one special meeting and one by
unanimous written consent. The Management Compensation Committee held four
meetings, and the Audit Committee held two meetings. The Executive Committee
held no meetings. Each director who is standing for re-election attended 100%
of the aggregate number of meetings of the Board of Directors and of the
committees of the Board on which they served.
The Company currently pays each director who is not a full-time employee of
the Company a yearly retainer of $10,000 and a fee of $500 for each Board
meeting attended or committee meeting attended which is not held on the same
day as a Board meeting. A fee of $250 is paid to each director who is not a
full-time employee for each telephonic Board meeting attended and for each
committee meeting held the same day as a meeting of the Board.
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of the Company:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL POSITION WITH THE COMPANY
---- --- -----------------------------------
<S> <C> <C>
Robert Grossman....... 56 Chairman, President and Chief Executive Officer of
the Company and Chairman or President of each of its
direct and indirect wholly-owned subsidiaries except
for Emons Finance Corp.
Scott F. Ziegler...... 41 Vice President-Finance, Controller and Secretary of
the Company and of each of its direct and indirect
wholly-owned subsidiaries except for Emons Finance
Corp.
Matthew C. Jacobson... 36 Vice President of the Company, Maine Intermodal
Transportation, Inc. and St. Lawrence & Atlantic
Railroad Company
Phillip A. DuPont..... 56 Vice President of the Company, Maryland and
Pennsylvania Railroad Company, Yorkrail, Inc. and
Emons Logistics Services, Inc.
</TABLE>
ROBERT GROSSMAN. For information regarding Mr. Grossman, see "ELECTION OF
DIRECTORS," above.
SCOTT F. ZIEGLER. For information regarding Mr. Ziegler, see "ELECTION OF
DIRECTORS," above.
MATTHEW C. JACOBSON. Mr. Jacobson has been a Vice President of the Company
since September, 1996 and has been Vice President of Maine Intermodal
Transportation, Inc. and St. Lawrence & Atlantic Railroad Company since May 1,
1996. Mr. Jacobson was an International Sales Manager of an affiliate of Sea-
Land Service, Inc. from August, 1995 to April, 1996. Mr. Jacobson was a Market
Manager from August, 1992 until December, 1993 and an Account Manager from
December, 1993 to August, 1995 of CSX Transportation, Inc. Mr. Jacobson was a
pilot, and most recently an instructor pilot, for the United States Air Force
from August, 1984 until February, 1993.
PHILLIP A. DUPONT. Mr. DuPont has been a Vice President of the Company,
Maryland and Pennsylvania Railroad Company, Yorkrail, Inc. and Emons Logistics
Services, Inc. since September, 1997. Mr. DuPont was Logistics Manager of the
Company from November, 1996 to September, 1997. Mr. DuPont was a self-employed
transportation consultant from May, 1996 to November, 1996. Mr. DuPont was
employed by Conrail and its predecessors for over thirty years and was most
recently employed by Conrail as a manager of customer development from
September, 1995 to May, 1996, an account executive from January, 1994 to
February, 1995 and Market Manager for the Metals Business Group from 1987 to
January, 1994.
The term of office of each officer expires at the first meeting of directors
of the Company following the Meeting.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation earned
in each of the Company's last three fiscal years by the Chief Executive Officer
and the only other executive officer of the Company or its subsidiaries, whose
cash compensation exceeded $100,000 during the fiscal year ended June 30, 1997
(a "Named Executive Officer").
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-----------------------------------------------------------------------------------------
RESTRICTED SECURITIES ALL OTHER
OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL FISCAL COMPENSATION AWARD(S) OPTIONS/ PAYOUTS SATION
POSITION YEAR SALARY ($) BONUS ($) ($) ($)/2/ SARS(#) ($) ($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert Grossman, 1997 212,000 30,085 50,000/3/ 20,206/5/
Chairman and Chief 1996 212,000 18,716
Executive Officer 1995 212,000 26,747 25,000 17,222
- -----------------------------------------------------------------------------------------------------------
Alfred P. Smith, 1997 139,692 16,391 58,683/1/ 50,000/4/ 1,309/6/
President and Chief 1996 129,600 30,222 1,249
Operating Officer 1995 127,200 24,201 35,717 25,000 919
- -----------------------------------------------------------------------------------------------------------
</TABLE>
/1/ During the 1997 fiscal year, the Company paid $50,665 of relocation and
related expenses in connection with Mr. Smith's relocation between Maine and
Pennsylvania, and an $8,018 automobile allowance on behalf of Mr. Smith.
/2/ As of October 1, 1997, Mr. Grossman had 62,500 vested and 62,500 unvested
shares of Restricted Common Stock. Based on an average of the closing bid
and ask prices on June 30, 1997, the unvested shares of Restricted Common
Stock were valued at $2.28 per share.
/3/ During the 1997 fiscal year, the Company granted 50,000 options to Mr.
Grossman at $3.25 per share.
/4/ During the 1997 fiscal year, the Company granted 50,000 options to Mr. Smith
at $3.25 per share.
/5/ During the 1997 fiscal year, the Company paid a $5,194 long-term disability
insurance premium and $5,814 group life and officer's additional life
insurance premiums on behalf of Mr. Grossman. In that same period, Mr.
Grossman received a $9,198 automobile allowance from the Company.
/6/ During the 1997 fiscal year, the Company paid $849 of group life and
officer's additional life insurance premiums, and a $460 long-term
disability insurance premium on behalf of Mr. Smith.
No stock appreciation rights were granted to a Named Executive Officer by
the Company or its subsidiaries during the fiscal year ended June 30, 1997.
No awards were made to a Named Executive Officer of the Company or its
subsidiaries pursuant to a long-term incentive plan during the fiscal year
ended June 30, 1997.
7
<PAGE>
EMPLOYMENT AND TERMINATION AGREEMENT
On May 26, 1994, the Company entered into an amendment to the amended and
restated employment agreement with Mr. Grossman to employ him as the Company's
Chairman of the Board and Chief Executive Officer for a term commencing on
December 31, 1994 and ending December 31, 1999, which term shall be extended
for additional one year terms unless sixty (60) days' prior written notice of
termination is given by Mr. Grossman or the Company. Pursuant to the terms of
his employment agreement, if Mr. Grossman's employment is terminated other
than for due cause, death or disability, he shall be entitled to a payment
equal to twenty-four months' base salary at a rate equal to the highest
annualized rate in effect during the six months prior to such termination. The
Company shall also continue Mr. Grossman's health, disability and life
insurance benefits and car allowance for twenty-four months after such
termination. A change in control of the Company or constructive demotion of
Mr. Grossman by the Company may constitute a termination under his employment
agreement.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
INDIVIDUAL GRANTS
------------------------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS/SARS
SECURITIES GRANTED TO EXERCISE OR
UNDERLYING OPTION/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)/1/ FISCAL YEAR ($/SH) DATE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert Grossman 50,000 25.6% 3.25 3/19/07
Chairman and Chief
Executive Officer
- -----------------------------------------------------------------------------------
Alfred P. Smith 50,000/2/ 25.6% 3.25 3/19/07
President and Chief
Operating Officer
- -----------------------------------------------------------------------------------
</TABLE>
/1/ Options granted to Messrs. Grossman and Smith vest over a five year period
and become fully exercisable on March 19, 2002.
/2/ Options granted to Mr. Smith were cancelled upon Mr. Smith's resignation
from the Company in September, 1997.
8
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning beneficial ownership
of the Company's equity securities as of October 1, 1997, by each director and
each nominee for director individually and all nine directors, nominees for
director and executive officers as a group. No director or executive officer
of the Company owns any shares of Convertible Preferred Stock. Each current
non-employee director and each executive officer of the Company has been
granted options to purchase Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-------------- ------------------------ -------------------- --------
<S> <C> <C> <C>
Common Stock............. Robert Grossman 417,320/1/ 6.85%
Common Stock............. Michael J. Blake 381,100 6.46%
Common Stock............. Alfred P. Smith 116,229 1.97%
Common Stock............. Scott F. Ziegler 66,000/2/ 1.11%
Common Stock............. Robert J. Smallacombe 50,000/3/ *
Common Stock............. Kimberly A. Madigan 13,333/4/ *
Common Stock............. Dean H. Wise 6,000/5/ *
Common Stock............. All directors, nominees 1,126,982/6/ 18.28%
for director and officers
as a group, (9 persons)
</TABLE>
None of the officers and directors of the Company engaged in securities
transactions for which they have failed to file, or failed to file on a timely
basis, Forms 4 or 5 with the Securities and Exchange Commission.
None of the current officers and directors of the Company failed to file,
or failed to file on a timely basis, a Form 3 with the Securities and Exchange
Commission stating that they have assumed the responsibilities of such
respective office.
- --------
* Percentage of shares beneficially owned does not exceed one percent of
Common Stock outstanding.
/1/ Includes (i) 1,000 shares owned by Mr. Grossman's wife, as to which Mr.
Grossman disclaims beneficial ownership; (ii) 62,500 shares of Restricted
Common Stock which have not vested as of October 1, 1997 and are subject to
risk of forfeiture; and (iii) currently exercisable options to purchase
40,000 shares of Common Stock at a price of $.906 per share and 150,000
shares of Common Stock at a price of $1.0625 per share. Does not include
unvested options to purchase 10,000 shares of Common Stock at a price of
$.906 per share, 150,000 shares of Common Stock at a price of $1.0625 per
share and 50,000 shares of Common Stock at a price of $3.25 per share.
/2/ Includes currently exercisable options to purchase 20,000 shares of Common
Stock at a price of $.8125 per share and 10,000 shares of Common Stock at a
price of $1.0625 per share. Does not include unvested options to purchase
5,000 shares of Common Stock at a price of $.8125 per share, 15,000 shares
of Common Stock at a price of $1.0625 per share and 50,000 shares of Common
Stock at a price of $3.25 per share.
/3/ Includes currently exercisable options to purchase 10,000 shares of Common
Stock at a price of $.906 per share and 10,000 shares of Common Stock at a
price of $1.0625 per share. Does not include unvested options to purchase
5,000 shares of Common Stock at a price of $1.0625 per share and 15,000
shares of Common Stock at a price of $2.2813 per share.
/4/ Includes currently exercisable options to purchase 10,000 shares of Common
Stock at a price of $2.4375 per share and 3,333 shares of Common Stock at a
price of $1.375 per share. Does not include unvested options to purchase
5,000 shares of Common Stock at a price of $2.4375 per share and 6,667
shares of Common Stock at a price of $1.375 per share.
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<PAGE>
/5/ Includes currently exercisable options to purchase 5,000 shares of Common
Stock at a price of $1.6875 per share. Does not include unvested options to
purchase 10,000 shares of Common Stock at a price of $1.6875 per share and
10,000 shares of Common Stock at a price of $3.25 per share.
/6/ See notes 1 through 5 above. Includes 55,000 shares of unvested Restricted
Common Stock as of October 1, 1997, currently exercisable options to
purchase 3,000 shares at a price of $1.25 per share and 1,000 shares at a
price of $2.5625 per share, held by two officers not named above. Does not
include unvested options to purchase 12,000 shares at a price of $1.25 per
share, 4,000 shares at a price of $2.5625 per share, 10,000 shares at a
price of $3.25 per share and 15,000 shares at a price of $3.1563 per share,
held by two officers not named above.
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PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth certain information regarding ownership of
the Company's equity securities as of October 1, 1997 by each person who is
known to the Company to own beneficially more than 5% of its voting
securities:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------- ------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock............ IBJ Schroder Bank & 1,400,510/1/ 23.73%
Trust Company
One State Street
New York, New York 10004
Common Stock............ Robert Grossman 417,320 6.85%
96 South George Street
York, Pennsylvania 17401
Common Stock............ Chase Manhattan Bank 382,063 6.47%
200 Jericho Quadrangle
Jericho, New York 11753-2790
Common Stock............ Michael J. Blake 381,100 6.46%
412 South Fourth Street
Suite 1200
Minneapolis, Minnesota 55415
Common Stock............ Long Meadows Holdings, L.P. 299,270 5.07%
1177 High Ridge Road
Stamford, Connecticut 06905
Convertible Preferred IBJ Schroder Bank & 615,429/1/ 39.76%
Stock.................. Trust Company
One State Street
New York, New York 10004
Convertible Preferred Chase Manhattan Bank 157,096 10.15%
Stock.................. 200 Jericho Quadrangle
Jericho, New York 11753-2790
Convertible Preferred Reliance Insurance Company 105,232 6.80%
Stock.................. 55 East 52nd Street
Park Avenue Plaza
New York, New York 10055
Convertible Preferred State of Michigan Retirement 131,737 8.51%
Stock.................. Systems
P.O. Box 30117
Treasury Building
Lansing, Michigan 48909
</TABLE>
- --------
/1/ The Shares owned of record by IBJ Schroder Bank & Trust Company are owned by
it in its capacity as escrow agent (the "Escrow Agent") acting for and on
behalf of certain holders of claims and interests in Industries, pursuant to
the Second Amended and Restated Joint Plan of Reorganization of Industries
and ET Railcar Corporation dated November 10, 1986, which shares shall be
distributed on a quarterly basis pro rata to holders of certain allowed
claims under the Plan. The Escrow Agent, as record owner of those shares,
has the
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power to vote those shares and has expressed its intention to vote such
shares, in person or by proxy, proportionally in accordance with the votes
cast on each matter by the other holders of the outstanding Common Stock and
Convertible Preferred Stock. The number of shares of Common Stock or
Convertible Preferred Stock to be distributed to any one holder of claims
depends upon the resolution of certain contingent liabilities of Industries.
It is not possible to determine at this time either the manner in which those
contingent liabilities will be resolved or the resulting disposition of the
shares of Common Stock or Convertible Preferred Stock currently held by the
Escrow Agent. The Company knows of no individual holder, other than the
persons named above who benefically own more than 5% of the Common Stock or
Convertible Preferred Stock.
To the knowledge of the Company, none of the beneficial owners of more than
10% of the Company's equity securities engaged in securities transactions for
which they have failed to file, or failed to file on a timely basis, Forms 4
or 5 with the Securities and Exchange Commission. Chase Manhattan Bank
recently became a beneficial owner of more than 10% of the Company's
Convertible Preferred Stock. Chase Manhattan Bank is in the process of filing
a Form 3 with the Securities and Exchange Commission to reflect its status as
a "10 percent holder" of the Company's equity securities.
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected the firm of Arthur Andersen LLP as its independent
public accountants to audit the books and accounts of the Company for the 1998
fiscal year.
Although the appointment of independent public accountants is not required
to be ratified by the stockholders, the Board of Directors believes that the
stockholders should participate in the selection of the independent public
accountants through the ratification process. If such ratification is not
obtained, the Board will consider the appointment of other independent public
accountants for the following year.
A representative of Arthur Andersen LLP is expected to be present at the
Meeting and to have the opportunity to make a statement and to be available to
respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP.
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<PAGE>
PROPOSALS AND NOMINATIONS BY STOCKHOLDERS
Pursuant to the by-laws of the Company, the Secretary of the Company must be
advised in writing of prospective nominations for election to the Board of
Directors at the Meeting not less than thirty days before the date fixed for
such Meeting.
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of the Company must be received by the Company for
inclusion in the Company's Proxy Statement and form(s) of proxy relating to
such Meeting no later than June 13, 1998. In order to curtail controversy as
to the date on which a proposal was received by the Company, proponents should
submit their proposals by Certified Mail-Return Receipt Requested. Timely
receipt of a stockholder's proposal, however, will satisfy only one of various
requirements for inclusion in the Company's proxy materials.
DISCRETIONARY AUTHORITY
It is not intended to bring before the Meeting any matters except the
election of directors and the ratification of the appointment of Arthur
Andersen LLP as independent public accountants. Management is not aware at
this time of any other matters to be presented for action. If, however, any
other matters properly come before the Meeting, the persons named as proxies
in the enclosed form of proxy intend to vote in accordance with their judgment
on the matters presented.
OTHER MATTERS
On written request, the Company will promptly provide without charge to each
record or beneficial holder of the Company's Common Stock or Convertible
Preferred Stock as of the Record Date, a copy of the Company's Annual Report
on Form 10-K for the year ended June 30, 1997, as filed with the Securities
and Exchange Commission. Requests should be addressed to Investor Relations,
Emons Transportation Group, Inc., 96 South George Street, York, Pennsylvania
17401.
By Order of the Board of Directors
/s/ Scott F. Ziegler
------------------------------------
Scott F. Ziegler
Secretary
October 15, 1997
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