SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant: MAYFLOWER GROUP, INC.
Filed by a Party other than the Registrant:
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MAYFLOWER GROUP, INC.
(Name Of Registrant As Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6-(i)(3)
[ ] 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: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
[ ] 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. N/A
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
To the Shareholders of
MAYFLOWER GROUP, INC.
The Annual Meeting of Shareholders of Mayflower Group, Inc.
will be held on April 27, 1994, at 11:00 a.m., local time (Eastern
Standard Time), at the Company's home office, 9998 North Michigan
Road, Carmel, Indiana 46032, for the following purposes:
1. To elect five (5) Directors of the Company for the
ensuing year and until their successors are chosen and
qualified;
2. To approve the adoption of the Mayflower Group, Inc. 1994
Restricted Stock Plan;
3. To approve amendment of 1992 Director Stock Option Plan;
4. To approve and adopt amendments to the Articles of
Incorporation of the Company;
5. To ratify the appointment of Coopers & Lybrand,
independent public accountants, as auditors for the
Company for the fiscal year ending December 31, 1994; and
6. To transact such other business (none known to management
as of the date of this Notice) as properly may come
before the meeting or any adjournments thereof.
The close of business March 7, 1994, is the record date for
the determination of shareholders entitled to vote at this meeting.
Only those who are shareholders of record at the close of business
on such date will be entitled to vote at said meeting and at any
adjournments thereof.
Copies of the Company's 1993 Annual Report to Shareholders and
Proxy Statement accompany this Notice.
Dated March 31, 1994.
Mayflower Group, Inc.
Robert H. Irvin, Secretary
By order of the Board of Directors
MAYFLOWER GROUP, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Mayflower Group, Inc.
(the "Company") of proxies to be voted at the Annual Meeting of
Shareholders to be held April 27, 1994, and at any adjournments
thereof. The cost of soliciting proxies will be borne by the
Company. The solicitation of proxies will be limited to the use of
the mails. The Company will reimburse banks, brokerage firms, and
other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy material to the beneficial owners
of shares.
A proxy may be revoked by the shareholder of record at any
time with respect to any proposal before it is exercised by giving
written notice of its revocation to the Secretary of the Company,
by filing with the Secretary a subsequently dated proxy, or by
attending the meeting or any adjournments thereof and voting in
person. All shares represented by the accompanying proxy will be
voted as directed by the shareholder if the proxy is executed and
returned and if the shares are eligible to vote.
At the close of business on March 7, 1994, the record date for
the Annual Meeting, 12,662,445 common shares of the Company were
outstanding, of which 11,499,111 shares were entitled to vote. The
outstanding shares not entitled to vote are beneficially owned by
a single entity and are subject to voting restrictions imposed by
Indiana law. For more information, see "Principal Holders of
Shares." The Company has no other outstanding voting securities.
A majority of all outstanding shares is necessary for a quorum.
Under Indiana law, once a share is represented for any purpose at
a meeting it is deemed present for quorum purposes for the
remainder of the meeting. A plurality of the votes cast is
required for the election of Directors. The affirmative vote of
the holders of a majority of the votes cast is required for the
approval and adoption of the amendments to the Articles of
Incorporation and the ratification of the appointment of the
auditors. The approval of the 1994 Restricted Stock Plan (as
hereinafter defined) and the amendment of the 1992 Director Stock
Option Plan (as hereinafter defined) require the affirmative vote
of the holders of a majority of the outstanding common shares
present in person or by proxy and entitled to vote. For matters
other than the approval of the 1994 Restricted Stock Plan and the
amendment of the 1992 Director Stock Option Plan, abstentions,
broker non-votes and instructions on a proxy to withhold authority
to vote for one or more of the director nominees will result in
fewer votes being cast with respect to a particular issue or
nominee. Abstentions and broker non-votes will have the same
effect as a vote against the approval of the 1994 Restricted Stock
Plan and the amendment of the 1992 Director Stock Option Plan.
PRINCIPAL HOLDERS OF SHARES
Directors, Officers and Five Percent Shareholders
The respective number of the Company's outstanding common
shares and proportions of the outstanding common shares
beneficially owned by (i) each Director of the Company; (ii) each
Executive Officer of the Company who is not a Director; (iii) the
Directors and Executive Officers of the Company as a group, and
(iv) all persons beneficially owning more than five percent of the
outstanding shares of the Company, are set forth on the following
table:
<TABLE>
<CAPTION>
Percent of
Name of Beneficial Owner Number of Shares (1) Outstanding (2)
<S> <C> <C> <C>
Directors
Roderick M. Hills 1,000 *
Perry J. Lewis 8,499 *
Lary R. Scott 760 *
Michael L. Smith 49,159(3) *
Sheldon M. Stone 6,479,931(4) 51.2%
John B. Smith (Emeritus) 90,332(5) *
Non-Director Executive Officers
Patrick F. Carr 8,849 *
Robert H. Irvin 1,679 *
All Directors and Executive
Officers as a Group 6,640,219 52.4%
(8 persons)
Five Percent Shareholders
The TCW Group, Inc.
and affiliates
865 South Figueroa Street
Los Angeles, CA 02116 6,479,931(6) 51.2%
Massachusetts Financial
Services Company
500 Boylston Street
Boston, Massachusetts 02116 1,138,810(7) 9.0%
PPM America, Inc.
227 West Monroe Street
Suite 3880
Chicago, Illinois 60606 1,270,652(8) 10.0%
Jackson National Life
Insurance Company
5901 Executive Drive
Lansing, Michigan 48909 1,270,652(9) 10.0%
Massachusetts Financial High
Income Trust
500 Boylston Street
Boston, Massachusetts 02116 915,919(10) 7.2%
________________________
<FN>
* Less than 1 percent
(1) The number of shares stated in this column is based on
information furnished by the person listed and includes shares
personally owned of record by the person and shares which are or
may be deemed to be otherwise beneficially owned by the person
under applicable regulations. Unless otherwise indicated, each
shareholder listed reports sole voting and dispositive power over
all shares beneficially owned.
(2) The percentages set forth in this column were based upon
12,662,445 shares of common stock outstanding as of March 7, 1994.
(3) Includes 102 shares owned by Mr. Smith's minor children, with
respect to which shares Mr. Smith's wife acts as custodian.
(4) Mr. Stone is a Managing Director of TCW Asset Management
Company, a subsidiary of The TCW Group, Inc., which, combined with
its affiliates (collectively, "TCW"), is investment manager
for certain separate accounts and certain trusts and as general
partner of certain limited partnerships, holds 6,479,931 shares of
common stock. Because of Mr. Stone's position with
TCW, beneficial ownership of the shares managed by TCW may be
attributed to Mr. Stone. Mr. Stone disclaims beneficial ownership
of the shares owned by TCW.
(5) Includes 27,917 shares owned by his wife, Barbara Smith, as to
which Mr. Smith disclaims beneficial ownership.
(6) Represents 6,479,931 shares of common stock held by limited
partnerships, trusts and accounts for which TCW is investment manager
and, therefore, such shares may be deemed beneficially owned by TCW
for purposes of the reporting requirements of the Securities and
Exchange Act of 1934. TCW disclaims ownership of these shares. TCW
has investment power over such shares of common stock. TCW has voting
power over 5,316,597 shares of common stock. 1,163,334 shares of
common stock held by TCW cannot be voted by TCW pursuant to the
Indiana Control Share Acquisition Statute. This information is as of
March 2, 1994.
(7) Represents 1,138,810 shares of common stock held by funds for
which Massachusetts Financial Services Company ("MFSC") acts as
investment adviser and, therefore, such shares may be deemed
beneficially owned by MFSC. These shares include the 915,919 shares
owned by Massachusetts Financial High Income Trust, for which MFSC
acts as investment adviser, and which are also reported separately
herein. MFSC shares voting and dispositive power over all such
shares with the funds for which it acts as investment adviser.
This information is as of January 31, 1994.
(8) These shares represent the shares owned by Jackson National Life
Insurance Company, for which PPM America, Inc. ("PPM") acts as
investment adviser, and which are also reported separately
herein. PPM shares voting power with respect to such shares.
This information is as of February 10, 1994.
(9) These shares are also included in the shares reported as being
beneficially owned by PPM, which acts as investment adviser for
Jackson National Life Insurance Company ("Jackson National"). Jackson
National shares voting power with PPM in the shares owned by it.
This information is as of February 10, 1994.
(10) These shares are also included in the shares reported as being
beneficially owned by MFSC, which acts as investment adviser for
the Massachusetts Financial High Income Trust ("MFHIT").
MFHIT shares voting and dispositive power with MFSC in the shares
owned by it. This information is as of January 31, 1994.
</TABLE>
ELECTION OF DIRECTORS
Directors are elected at each Annual Meeting of Shareholders
and hold office for one year and until their respective successors
are chosen and qualified. The current Directors of the Company
were elected at the Annual Meeting of Shareholders held on April
28, 1993. The By-Laws of the Company fix the number of Directors at
five. The Articles of Incorporation of the Company provide that
the Directors, by a majority vote, may designate a former director
of the Company to serve as an Emeritus Director for a specified
term. An Emeritus Director shall be entitled to receive notice of
and participate in the meetings and activities of the Board of
Directors, but shall not be counted in determining whether a quorum
of Directors is present for a meeting of the Board or be entitled
to vote on matters coming before the Board. The Board of Directors
of the Company has designated John B. Smith to serve as an Emeritus
Director of the Company through the 1994 Annual Meeting of the
Board of Directors of the Company and may extend Mr. Smith's term
through the 1995 Annual Meeting of the Board of Directors. The
officers of the Company are elected to serve until the next meeting
of Directors following the annual shareholders meeting. There is
no family relationship between any of the Directors, the Emeritus
Director and the Executive Officers of the Company.
The accompanying proxy will be voted for the nominees named
below, in the absence of an instruction to the contrary. Should
any nominee become unavailable to serve as a Director, the proxies
will be voted for such other person as shall be designated by the
Board of Directors. Each of the nominees has consented to serve as
a Director, if elected.
Information about the nominees is set forth below:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Roderick M. Hills 62 Director
Perry J. Lewis 56 Director
Lary R. Scott 57 Director
Michael L. Smith 45 Director, Chairman, President and
Chief Executive Officer
Sheldon M. Stone 41 Director
</TABLE>
Roderick M. Hills: Mr. Hills has been a Director of the
Company since March 1992. He has been Counselor to Hills & Company
since 1993. He was Chairman of the International Practice Group
and a partner at Shea & Gould from June 1992 through March 31,
1994. Mr. Hills serves as a director of Federal Mogul, Inc., TCW
Americas Development, Inc., Sunbeam-Oster, Inc. and as Vice
Chairman of the Board of Oak Industries, Inc. He served as
Chairman and Managing Director of the Manchester Group, Ltd. from
1987 to 1993. Mr. Hills was a partner at Donovan, Leisure,
Rogovin, Huge & Schiller from 1989 to June 1992. Also, Mr. Hills
formerly served as Chairman of the Securities and Exchange
Commission from 1975 to 1977, as well as Chairman and Chief
Executive Officer of Republic Corporation from 1971 to 1975, and
Peabody Coal Company from 1977 to 1978.
Perry J. Lewis: Mr. Lewis has been a Director of the Company
since December 1986. Mr. Lewis has been a Managing Director of
Morgan Lewis Githens & Ahn, Inc. since April 1982. Also, Mr. Lewis
serves as a Director of Aon Corporation, Haynes International,
Inc., Interactive Technologies, Inc., Tyler Corporation and Quaker
Fabric Corporation, and is Chairman of the Board of Broadcasting
Partners, Inc.
Lary R. Scott: Mr. Scott has been a Director of the Company
since March 1992. He has been Vice Chairman and Chief Executive
Officer of Carolina Freight Corporation since March 22, 1993. He
serves as Director of The Clorox Company and Sun Carriers, Inc., as
well as being a member of the Military Air Command and the National
Football League's Board of Governors. Mr. Scott was President and
Chief Operating Officer of Consolidated Freightways, Inc. (which he
joined in 1967) from 1987 to 1988 and served as President and Chief
Executive Officer from 1988 to 1990. He served as President of
Alexia Consulting, Los Altos, California, from 1990 to 1993.
Michael L. Smith: Mr. Smith was originally employed at
Mayflower Corporation, a predecessor of the Company, in 1974. He
has been a Director of the Company since October 1986, President of
the Company since April 1989, Chief Executive Officer of the
Company since January 1990, and Chairman of the Board of the
Company since April 1992. He was Chief Operating Officer of the
Company between April 1989 and April 1991. Mr. Smith was the
Executive Vice President of the Company from January 1987 to April
1989. He has been Chief Executive Officer of Mayflower Transit,
Inc. ("Transit") since June 1989 and a Director of Transit since
October 1986. He was President of Transit from June 1989 to
January 1990. He has been Chairman of the Board and Chief
Executive Officer of Transit and its subsidiaries since June 1989.
He has been Chairman of the Board and Chief Executive Officer of
Mayflower Contract Services, Inc. ("Contract Services") since
January 1987 and has been a Director of Contract Services since
October 1986. He was President of Contract Services from January
1987 through December 1992. Mr. Smith also serves as a Director of
First Indiana Corporation, Somerset Group, Inc. and Acordia, Inc.
Sheldon M. Stone: Mr. Stone has been a Director of the
Company since March 1992. He has been a Managing Director of TCW
Funds Management, Inc. since April 1990 and has been a Managing
Director of Trust Company of the West ("TCW") since June 1985.
Prior to joining TCW, Mr. Stone served as a Vice President of
Citicorp Investment Management, Inc. from 1983 to 1985, and held
various investment management positions at The Prudential Insurance
Company of America from 1978 to 1983.
DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors of the Company held an aggregate of
fifteen Board and Committee meetings in 1993 ( nine Board meetings
and six committee meetings). Each of the current Directors
attended at least 75% of the aggregate number of meetings of the
Board and the Committees on which he served, except for Mr. Hills
who was unable to attend four meetings during the year. Three of
the meetings missed by Mr. Hills were held on the same day.
The Board's Audit Committee is primarily responsible for
recommending the firm to be employed as the Company's independent
public accountants; reviewing the report of audit, or proposed
report of audit, and the accompanying management letter, if any;
and consulting with the independent and internal auditors with
regard to the adequacy of internal controls. The Audit Committee,
currently composed of non-employee Directors Hills (Chairman),
Stone, Lewis and Scott, held three meetings during 1993. The
Board's Compensation Committee establishes the Company's
compensation programs and oversees the administration of the
Company's employee benefit plans. The Compensation Committee met
four times in 1993. For more information about the Compensation
Committee, see "Management Compensation - Report of Compensation
Committee." The Board of Directors does not have a Nominating
Committee.
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table contains information regarding the
compensation paid to each of the Company's Executive Officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Other Securities
Annual Restricted Under- All Other
Compensa- Stock lying Compensa-
Name and Principal Position Year Salary Bonus tion (3)(4) Awards Options tion (3)(7)
<S> <C> <C> <C> <C> <C> <C> <C>
Michael L. Smith 1993 $350,000 $ 0 $66,704 $117,500(5)(6) 15,000 $3,242
Chairman, President and 1992 350,000 87,500 8,140 0 20,000 9,567
Chief Executive Officer(1) 1991 250,000 30,000 -- 0 0 --
Patrick F. Carr 1993 $220,000 $ 0 $ 4,371 0 15,000 $6,494
Senior Vice President and 1992 200,000 100,000 3,414 0 15,000 5,915
Chief Financial Officer(2) 1991 171,250 0 -- 0 0 --
Robert H. Irvin 1993 $160,000 $ 0 $ 3,589 0 10,000 $5,670
Senior Vice President, 1992 150,000 75,000 3,101 0 10,000 5,214
Secretary and General 1991 125,000 0 -- 0 0 --
Counsel (2)
__________________________________
<FN>
(1) Mr. Smith was employed directly by the Company in 1991. Since
January 1, 1992, Mr. Smith has been compensated by Contract Services
pursuant to an employment agreement. Transit reimburses Contract
Services for one-half of the amount of Mr. Smith's salary.
(2) Messrs. Carr and Irvin were employed directly by the Company in
1991. They have been compensated exclusively by Transit since
January 1, 1992.
(3) In accordance with the transitional provisions applicable to the
revised rules on executive officer and director compensation disclosure
adopted by the Securities & Exchange Commission, as informally
interpreted by the Commission Staff, the amounts of Other Annual
Compensation and All Other Compensation are excluded for the Company's
1991 fiscal year.
(4) In each of the years 1993 and 1992, Mr. Smith received $3,000
under a supplemental executive compensation plan maintained by
Contract Services for the benefit of certain officers and
employees. Contract Services reimbursed Mr. Smith for moving
expenses in the amount of $59,120 in 1993. Messrs. Smith, Carr
and Irvin all participate in an executive supplemental
health care plan maintained by their employers, pursuant to which
benefits are paid either directly to health care providers or to the
participants to reimburse them for covered expenses. In 1993, benefits
amounting to $2,702, $3,157 and $2,463 were paid by the plans
on behalf of Messrs. Smith, Carr and Irvin, respectively. Supplemental
health care benefits paid in 1992 on behalf of Messrs. Smith, Carr and
Irvin were $3,764, $2,428 and $2,251, respectively. Each of the
participants in the supplemental health plans is entitled to receive
tax "gross-up" payments for benefits paid in the preceding fiscal
year. Messrs. Smith, Carr and Irvin received gross-up payments in
1993 in the amounts of $1,882, $1,214 and $1,126, respectively, for
benefits paid in 1992, and $1,376, $986 and $850, respectively, in
1992 with respect to supplemental health plan benefits paid in 1991.
(5) Represents 10,000 shares of restricted stock granted on November 3,
1993. All shares will vest on November 3, 1996. During the period of
restriction, holders are entitled to receive all dividends and other
distributions paid with respect to such shares.
(6) As of December 31, 1993, Mr. Smith held 10,000 shares of
Restricted Stock with a value as of December 31, 1993 of $115,000.
(7) The Company 's subsidiaries provide term life insurance policies
to certain key employees, including the Executive Officers. The
premiums paid in 1993 by the Company or its subsidiaries under these
policies on behalf of Messrs. Smith, Carr and Irvin were $2,056,
$4,245 and $3,421, respectively. Premiums paid in 1992 on behalf
of Messrs. Smith, Carr and Irvin were $8,220, $3,733 and $3,032,
respectively. The amounts in this column also include vested employer
matching contributions in the amounts of $1,186, $2,249 and $2,249 in
1993 and $1,347, $2,182 and $2,182 in 1992 for Messrs. Smith, Carr
and Irvin, respectively, under defined contribution plans qualified
under section 401(k) of the Internal Revenue Code maintained by
Contract Services and Transit.
</TABLE>
Option Grants, Exercises and Holdings
The following tables set forth information relating to option
grants, exercises and holdings with respect to each of the named
executive officers in the fiscal year ended December 27, 1992, as
well as the end of the fiscal year:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Realizable Value
Number of Percent of Assuming Annual
Securities Total Options Rates of Stock
Underlying Granted To Exercise Price Appreciation
Options Employees in Price Per Expiration For Option Term
Name Granted (1) Fiscal Year Share Date 5% (2) 10% (2)
<S> <C> <C> <C> <C> <C> <C>
Michael L. Smith 15,000 9.0% $9.00 4/28/03 $84,900 $215,100
Patrick F. Carr 15,000 9.0% 9.00 4/28/03 84,900 215,100
Robert H. Irvin 10,000 6.1% 9.00 4/28/03 56,600 143,400
__________________________________
<FN>
(1) Options become exercisable in 33.3% increments on each of the
first three anniversary dates of the grant and must be exercised
within ten years from the grant date.
(2) These gains are based upon assumed rates of annual compound
stock price appreciation of 5% and 10% from the date the options were
granted over the full option term. These amounts represent certain
assumed rates of appreciation only. Actual gains, if any, on options
exercises and Common Stock holdings are dependent upon the future
performance of the Company's Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected
on this table will be achieved.
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Value of
No. of Unexercised
Unexercised In-The-Money
Options at Options at
Shares Value Fiscal Year-End Fiscal Year-End
Acquired on Realized At Ever- Unexer- Exer- Unexer-
Name Exercise (1) Exercise Date cisable cisable cisable (1) cisable (1)
<S> <C> <C> <C> <C> <C> <C>
Michael L. Smith 0 -- 6,666 28,334 $30,830 $99,170
Patrick F. Carr 0 -- 5,000 25,000 23,125 83,750
Robert H. Irvin 0 -- 3,333 16,667 15,415 55,835
____________________________________________
<FN>
(1) Based on the closing price for the Company's Common Stock on
the last business day of 1993, which was $11.50 per share.
</TABLE>
Defined Benefits Plans
The Company maintains no employee benefit plans for any of its
officers or employees. All officers and employees of the Company
are also officers or employees of either Transit or Contract
Services and participate in employee benefit plans maintained by
those operating subsidiaries. Transit maintains the Mayflower
Employees' Pension Plan (the "Transit Plan") for its officers and
employees and those of certain of its subsidiaries, except for
certain classes of employees, including those covered by collective
bargaining agreements which do not provide for coverage under the
Pension Plan. Contract Services maintains the Mayflower Contract
Services, Inc. Executive Retirement Plan (the "MCS Plan") for
certain of its senior officers.
Transit Plan. The table below shows the estimated annual
benefits provided by the Transit Plan, upon retirement on December
31, 1993, at age 65, to persons with the specified five year
average earnings and years of service classification. The five
year average earnings are the average of the highest five
consecutive calendar years of all years of covered employment. The
benefits shown do not take into account limitations imposed by
Section 415 of the Internal Revenue Code (the "Code").
<TABLE>
<CAPTION>
Five
Year Average 15 Years' 20 Years' 25 Years' 30 Years' 35 Years'
Earnings ($) Service ($) Service ($) Service ($) Service($) Service ($)
<S> <C> <C> <C> <C> <C>
125,000 27,948 37,264 46,581 55,897 65,213
150,000 33,948 45,264 56,580 67,896 79,212
175,000 39,947 53,263 66,579 79,894 93,210
200,000 45,948 61,264 76,581 91,896 107,213
225,000 51,948 69,264 86,580 103,896 121,212
250,000 57,936 77,264 96,579 115,895 135,210
300,000 69,948 93,264 116,580 139,896 163,212
350,000 81,948 109,264 136,581 163,896 191,213
400,000 93,947 125,264 156,579 187,896 219,210
450,000 105,948 141,264 176,580 211,896 247,212
500,000 117,948 157,264 196,581 235,896 275,213
</TABLE>
The current years of service at January 1, 1994 for certain
Executive Officers named in the Summary Compensation Table are as
follows: Patrick F. Carr (18) and Robert H. Irvin (13). Michael
L. Smith does not participate in the Transit Plan.
Compensation covered by the Transit Plan consists of the total
amount of salary and bonuses (inclusive of commissions but
exclusive of other remuneration) actually paid to an employee and
also includes amounts an employee has elected to defer under a cash
or deferred arrangement maintained by Transit and qualified under
Section 401(k) of the Code and amounts contributed by an employee
to plans qualified under Section 125 of the Code. Amounts deferred
under Transit's 401(k) plan and contributed to the Section 125 plan
are included in the salary figures shown in the Summary
Compensation Table. Beginning on and after January 1, 1989, the
annual amount of compensation that may be taken into account is
limited. The 1994 calendar year limit is $150,000. This
compensation limit will be adjusted after 1994 as permitted by the
Code.
MCS Plan. The MCS Plan provides retirement benefits for a
period of fifteen (15) years to senior officers of Contract
Services who have participated in the MCS Plan for ten (10) years.
Annual benefits are between 25 and 60% of the participant's average
annual compensation during the five (5) calendar years of
participation immediately preceding retirement. Average annual
compensation is calculated using the total amount of salary and
bonuses actually paid and also includes amounts the participant has
elected to defer under a cash or deferred arrangement maintained by
Contract Services and qualified under Section 401(k) of the Code
and amounts contributed by a participant to plans qualified under
Section 125 of the Code. Amounts deferred under Contract Service's
401(k) plan and amounts contributed to the Section 125 plan are
included in the salary figures shown on the Summary Compensation
Table. Michael L. Smith participates in the MCS Plan. Assuming
Mr. Smith's average annual compensation during the five (5)
calendar years of participation immediately preceding retirement at
his normal retirement date is $350,000, he would be entitled to an
annual benefit of $210,000.
Compensation of Directors
The Company does not provide cash compensation to the members
of its Board of Directors. However, all members of the Board of
Directors of the Company also serve on the Boards of Transit and
Contract Services (including John B. Smith as Emeritus Director).
Non-employee Directors serving on the Board of Transit and Contract
Services (including the Emeritus Director) receive a retainer of
$5,000 per quarter plus $1,000 per meeting of the Company's Board
of Directors attended. Options to purchase an aggregate of 24,000
shares of the Company's common stock have been granted to non-
employee Directors (including the Emeritus Director) under a stock
option plan established in 1992 (the "1992 Director Stock Option
Plan"). In July 1992 and April 1993 Messrs. Hills, Lewis, Scott
and John B. Smith each were granted options to purchase 3,000
shares of common stock. Mr. Stone has elected not to participate
in the 1992 Director Stock Option Plan. The Company originally
reserved 30,000 shares of common stock for issuance under the 1992
Director Stock Option Plan. An additional 30,000 shares has been
reserved for issuance under the 1992 Director Stock Option Plan,
subject to shareholder approval of the plan amendment proposed
herein. In addition, the non-employee Directors receive
reimbursement of all out-of-pocket expenses incurred in connection
with attendance at Board meetings.
Report of the Compensation Committee
The Compensation Committee of the Board of Directors currently
comprises non-employee Directors Scott (Chairman), Hills, Lewis and
Stone. The Committee establishes the Company's compensation
policies, reviews all salary recommendations in excess of $100,000
per year, administers the Company's incentive compensation plans
and oversees the administration of the Company's employee benefit
plans. All decisions by the Compensation Committee relating to the
foregoing responsibilities are reviewed by the full Board.
Executive Compensation Policy
Philosophy and Goals. The goal of the Company's executive
compensation policy is to ensure that an appropriate relationship
exists between creating shareholder value and motivating and
retaining key executives. The Compensation Committee exercises its
discretion in establishing executive compensation, taking into
consideration the committee's subjective assessment of the
financial performance of the Company or its operating subsidiaries
and individual efforts, independent compensation data,
recommendations of management and the advice of outside
consultants. In setting base salaries and bonuses, the
Compensation Committee considers executive compensation levels at
other non-manufacturing, non-financial services companies in the
United States with similar revenues and within the truck and bus
transportation industries, regardless of revenues. Because much of
the comparative compensation data relied upon by the Compensation
Committee is proprietary information supplied by a compensation
consulting firm, it is not possible to determine whether the
companies surveyed by the consultant are included in the Russell
2000 Index (which the Company has used in comparing shareholder
returns--see "Company Performance").
Three-Pronged Approach. During the years prior to the
Company's reorganization, executive management was compensated
through base salaries and participation in annual incentive
compensation (bonus) plans. The Company began awarding long-term
incentives through its stock option plan in 1992 and its restricted
stock plan in 1993. The Committee believes that all three methods
of rewarding the Company's executives are essential components of
an effective compensation policy.
Base Salary. Executive Officer salaries are initially
established in accordance with the Company's governing compensation
philosophy. Because of the financial uncertainties faced by the
Company in the years prior to its reorganization, however, salaries
have not always remained competitive or reflected changes in
circumstances. For example, Michael L. Smith's base salary remained
unchanged during the five years ended December 31, 1991, despite
the significant increase in his responsibilities during that
period. The salary adjustment he received upon the execution of
his employment contract in January 1992 was made in connection with
the reorganization of the Company to recognize his increased
responsibilities. During the period covered in the Summary
Compensation Table, both Messrs. Carr and Irvin assumed additional
duties with the Company. Their base salaries have been increased
over time in recognition of their expanded responsibilities.
Bonuses. For several years (including the yearscovered
by the Summary Compensation Table) the Company, through its
operating subsidiaries, has maintained annual incentive
compensation plans for the benefit of the Executive Officers and
senior management. These plans are intended to reward participants
who contribute to the achievement of the profitability goals of
their employer (Transit or Contract Services) and who meet
individual objectives tailored to the particular responsibilities
of the participant. Eligibility, objective criteria (such as
profitability targets and individual goals) and potential awards
are revised annually by the board of directors of the sponsoring
company and the Compensation Committee. In the years covered by
the Summary Compensation Table in which the sponsoring company did
not achieve its profitability targets, its bonus plan did not
permit the award of any incentive compensation to an Executive
Officer, regardless of whether such officer met his individual
goals for the year.
Long-Term Incentives. The Compensation Committee
believes that stock option and restricted stock grants to the
Executive Officers and others will further motivate executives to
focus on long-term shareholder value. In 1992, at the
recommendation of the Compensation Committee, the Board adopted a
stock option plan for the benefit of certain Officers of the
Company and its subsidiaries. The plan was approved at the 1993
Annual Meeting of Shareholders. As of December 31, 1993, options
to purchase 312,500 shares of the Company's common stock have been
granted under the plan. In August 1993, the Board, upon the
recommendation of the Compensation Committee, provided for the
award of up to 25,000 restricted shares of the Company's common
stock to Officers and key employees through the adoption of the
Mayflower Group, Inc. Restricted Stock Plan (the "1993 Restricted
Stock Plan"). As of December 31,1993, 17,000 shares have been
awarded under the 1993 Restricted Stock Plan. The 1994 Restricted
Stock Plan is essentially identical to the 1993 Restricted Stock
Plan, but provides for the award of up to 500,000 restricted shares
over the life of the plan. For more information about the 1994
Restricted Stock Plan, see "Approval of 1994 Restricted Stock Plan"
set forth herein. Stock options and restricted shares are awarded
by the Compensation Committee based upon subjective evaluations of
the employee's performance level and the financial performance of
his or her employer and the Company. These determinations are made
without regard to the employee's existing stock option or
restricted stock holdings.
1993 Chief Executive Officer Compensation
The compensation paid to Michael L. Smith with respect to 1993
included his base salary and awards under the Company's 1992 Stock
Option Plan and the 1993 Restricted Stock Plan. Mr. Smith did not
participate in the Contract Services bonus program for the fiscal
year ended June 30, 1993. Mr. Smith's base salary was established
in his employment agreement with Contract Services and has not
increased since 1992. Based upon subjective evaluations of Mr.
Smith's efforts at Contract Services, that company's financial
results for its fiscal year ended June 30, 1993 and the Company's
performance as of the time of the evaluations, the Compensation
Committee awarded him options to purchase 15,000 shares of the
Company's common stock under the 1992 Stock Option Plan and 10,000
restricted shares of the Company's common stock pursuant to the
1993 Restricted Stock Plan.
Lary R. Scott, Chairman
Roderick M. Hills
Perry J. Lewis
Sheldon M. Stone
Members of the Compensation Committee
Employment Contracts and Termination Benefits Agreements
Effective January 1, 1992, Michael L. Smith entered into an
employment agreement with Contract Services which provides him with
an annual base salary of $350,000.00. The contract provides for
an initial term of one year with automatic annual renewals on each
anniversary date, unless earlier terminated by either party as
provided in the agreement. In the event the agreement is
terminated by reason of "Resignation for Good Reason" or
"Termination Without Cause" (both as defined in the agreement),
then the Company is required to pay Mr. Smith the base salary as
provided in the agreement for the remainder of the then-current
term, subject to certain limitations.
Transit has entered into termination benefits agreements with
two Executive Officers of the Company. Patrick F. Carr and Robert
H. Irvin currently are parties to termination benefits agreements
which replace agreements entered into by a predecessor of the
Company ("Old Mayflower") in connection with the 1986 acquisition
of Old Mayflower (the "Replacement Agreements"). The Replacement
Agreements contain substantially similar terms and conditions as
those contained in the original agreements. Pursuant to the
Replacement Agreements, Transit will be required to pay certain
specified benefits to the covered individual if (i) Transit
terminates the employment of such individual for any reason other
than Cause (as defined in the Replacement Agreements), death, the
attainment of age 65 or total and permanent disability or (ii) such
individual voluntarily terminates his employment with Transit for
Good Reason (as defined in the Replacement Agreements) within three
years after an Acquisition of Control (as defined in the
Replacement Agreements) of Transit. The definition of Change of
Control was satisfied and the three year period commenced upon the
consummation of the Plan of Reorganization on March 24, 1992.
Within five days of any such termination, the terminated individual
is entitled to receive a lump sum payment equal to three times the
average annual compensation paid by Transit and/or the Company and
includable in the gross income of such individual for the five
years preceding termination.
Company Performance
The following graph compares cumulative total returns for the
Company, the S&P 500 Composite Index and the Russell 2000 Index for
the period beginning August 21, 1992 and ending December 31, 1993.
August 21, 1992 was the last business day preceding the effective
date of the registration of the Company's common stock under
Section 12 of the Securities Exchange Act of 1934. The Company
selected the Russell 2000 Index because management believes
investors will derive more benefit from a comparison with companies
of similar market capitalization than with other transportation
firms. The Company's principal business activities are in two
specialized segments of the transportation industry. The Company
believes there is no industry or line of business index or peer
group that would generate a meaningful comparison. The graph
assumes that the value of an investment in the Company's common
stock and in each index was $100 at August 21,1992, and that all
dividends were reinvested.
[Performance Graph filed simultaneously under cover of Form SE].
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 9, 1989, Transit entered into a fifteen year
Consultation Agreement with John B. Smith in connection with his
retirement on December 31, 1989. Payments under Mr. Smith's
consultation arrangement commenced in January 1990. During 1993,
1992 and 1991, Transit paid Mr. Smith $139,000, $139,000 and
$239,000, respectively, for services rendered, and paid $32,000,
$44,000 and $56,000 each year, respectively, in premiums related
to insurance policies maintained by Transit on Mr. Smith's behalf.
In his role as a consultant, Mr. Smith assists Transit in
developing and maintaining its relationship with its agency
network, as well as being available to consult with the management
of Transit on operational issues. Mr. Smith also currently serves
as an Emeritus Director of the Company and of both Transit and
Contract Services.
SECTION 16(a) REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's Directors and certain officers, and persons who own
more than ten percent of the Company's common stock, to file with
the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, Directors
and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a)
reports they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company, all
officers, Directors and greater than ten percent beneficial owners
of the Company complied with all applicable Section 16(a) filing
requirements from January 1, 1993 through the date of this Proxy
Statement.
APPROVAL OF 1994 RESTRICTED STOCK PLAN
On February 23, 1994, the Board of Directors of the Company
adopted the Mayflower Group, Inc. 1994 Restricted Stock Plan (the
"1994 Restricted Stock Plan"), subject to shareholder approval at
the 1994 Annual Meeting of Shareholders. The 1994 Restricted Stock
Plan is summarized below. The full text of the 1994 Restricted
Stock Plan is set forth in the Appendix at the back of this Proxy
Statement.
The 1994 Restricted Stock Plan is intended to provide officers
(including officers who are members of the Board of Directors) and
other key employees of the Company and its subsidiaries with
additional incentive to work for the success of the Company and its
subsidiaries by awarding them shares of the Company's common stock.
The 1994 Restricted Stock Plan is also intended to enable the
Company and its subsidiaries to attract and retain capable
executive personnel.
The 1994 Restricted Stock Plan will be administered, construed
and interpreted by the Compensation Committee of the Company's
Board of Directors. Subject to the terms of the 1994 Restricted
Stock Plan, the Compensation Committee will select the individuals
to whom shares will be granted and will determine the terms of the
grants, including the number of shares to be awarded, the required
holding period before the restrictions on transferability lapse
(which in no event shall be less than six months), and other
restrictions the Compensation Committee deems advisable. Grantees
holding restricted shares under the 1994 Restricted Stock Plan
shall be entitled to exercise full voting rights and receive all
dividends and other distributions paid with respect to those
shares.
The period of restriction for shares granted under the 1994
Restricted Stock Plan shall automatically end when a grantee's
employment with the Company terminates by reason of retirement,
death, permanent and total disability or involuntary termination
without cause. In the event a grantee's employment with the
Company is voluntarily terminated by the employee or is terminated
by the Company for cause, any common shares still subject to
restrictions under the 1994 Restricted Stock Plan will be forfeited
and returned to the Company.
After the 1994 Restricted Stock Plan has been approved by the
shareholders, the Company will reserve 500,000 shares of common
stock for issuance under the 1994 Restricted Stock Plan. In the
event of corporate changes affecting the Company's common shares,
such as reorganizations, recapitalizations, stock splits, stock
dividends, mergers, consolidations and liquidations, the
Compensation Committee may make appropriate adjustments in the
number and kinds of shares reserved under the 1994 Restricted Stock
Plan.
Upon receipt of shareholder approval, the 1994 Restricted
Stock Plan shall remain in effect until all shares of common stock
subject to it have been granted and all restrictions on such shares
have been released, or until the Board of Directors terminates the
1994 Restricted Stock Plan in accordance with its terms. In no
event, however, shall shares be granted after April 27, 2004. No
grants have been made under the 1994 Restricted Stock Plan and
future awards under the 1994 Restricted Stock Plan are not
determinable.
The Board of Directors recommends that shareholders vote FOR
approval of the 1994 Restricted Stock Plan.
APPROVAL OF AMENDMENT OF 1992 DIRECTOR STOCK OPTION PLAN
On April 28, 1993, the shareholders of the Company approved
the adoption of the Mayflower Group, Inc. 1992 Director Stock
Option Plan (the "1992 Director Stock Option Plan").
The 1992 Director Stock Option Plan provides non-employee
Directors of the Company an opportunity to acquire Company stock
and thereby increase the incentive of such non-employee Directors
to work toward the success of the Company and its subsidiaries.
The 1992 Director Stock Option Plan provides only for the grant of
non-tax qualified stock options.
The 1992 Director Stock Option Plan specifically prescribes
the terms, conditions and dates for grants of stock options. It
provides automatically for the grant of options for 3,000 shares of
common stock to each non-employee Director on the date of each
annual meeting of the Shareholders. The exercise price for each of
the stock options granted is the fair market value of a share of
common stock on the grant date. All the terms and conditions of
the stock options available under the 1992 Director Stock Option
Plan are specified in the plan. The 1992 Director Stock Option Plan
is substantially self-administering. Options become exercisable
in 33 1/3% increments on the first, second and third anniversaries
of the date of grant, conditioned upon the recipient continuing as
a Director of the Company on the anniversary date.
The Company originally reserved 30,000 shares of its common
stock for issuance under the 1992 Director Stock Option Plan. As
of December 31, 1993, options to acquire 24,000 shares of common
stock have been granted under the 1992 Director Stock Option Plan.
On March 17, 1994, the Board of Directors amended the 1992 Director
Stock Option Plan to provide for the award of options to acquire an
additional 30,000 shares of common stock, subject to shareholder
approval at the 1994 Annual Meeting of Shareholders. The Company
has reserved an additional 30,000 shares of its common stock for
issuance under the 1992 Director Stock Option Plan, subject to
approval of the proposed amendment.
In the event of corporate changes, stock splits, stock
dividends, mergers, consolidations and liquidations, the number of
shares available for option grants will be appropriately adjusted
in accordance with the terms of the 1992 Director Stock Option
Plan. If any option granted under the 1992 Director Stock Option
Plan expires or terminates for any reason without being exercised
in full, then the unpurchased shares subject to that option will
once again be available for additional grants.
Under current tax laws, the grant of non-qualified stock
options under the 1992 Director Stock Option Plan has no federal
tax consequences to the Company or the Director optionee. A non-
qualified stock option holder generally will realize taxable
ordinary income at the time of exercise in an amount equal to the
excess of the fair market value of the shares acquired over the
exercise price. A like amount is generally deductible by the
Company for federal income tax purposes as of that date.
Because the exercise price of options granted under the 1992
Director Stock Option Plan is equal to the fair market value of a
share of common stock on the grant date, the value of future option
grants under the 1992 Director Stock Option Plan are not currently
determinable. The closing price of the Company's common stock on
March 7, 1994 was $11 3/4 per share.
The Board of Directors recommends that shareholders vote
FOR approval of the amendment to the 1992 Director Stock Option
Plan.
APPROVAL AND ADOPTION OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
On February 23, 1994, the Board of Directors unanimously
adopted resolutions proposing and recommending that Article 5 of
the present Articles of Incorporation of the Company (the "Current
Articles"), be amended by the adoption of Articles of Amendment
(the "proposed Amendment"), and that the proposed Amendment be
submitted to the shareholders for approval and adoption. The full
text of Article 5 as amended by the proposed Amendment is set forth
in the Appendix at the back of this Proxy Statement.
The purposes of the proposed Amendment are to (i) eliminate
the prohibition on the issuance of classes of capital stock without
voting rights contained in the Current Articles, and (ii) to
authorize a separate and single class of 5,000,000 shares of
preferred stock issuable in series. Under the proposed Amendment,
the Board of Directors is delegated the authority to determine and
state the designations and relative preferences, limitations,
voting rights, if any, and other rights of each such series by
adoption and making a filing in accordance with the Indiana
Business Corporation Law ("IBCL") of an amendment to the Company's
Articles of Incorporation without action by the shareholders of the
Company. All shares of preferred stock of the same series must be
identical with each other in all respects.
The Board of Directors believes the proposed Amendment to be
desirable because it would provide the Board flexibility in issuing
shares and managing the Company's capital structure. The preferred
stock could be privately placed, could contain voting requirements
that provide for approval of extraordinary corporate transactions,
and could provide for extraordinary voting rights.
It is possible that the issuance of such preferred shares
might, under particular circumstances, be considered to have the
effect of discouraging attempts to take control of the Company
(given the wide discretion permitted in determining the terms
thereof). Because the Company currently has a single shareholder
that beneficially owns more than 50% of the common stock of the
Company, management believes that the Company has no need for
additional anti-takeover protection. The Board of Directors, which
unanimously approved the Amendment, does not consider the proposed
Amendment as part of any plan to adopt, and does not presently
contemplate recommending the adoption of, any further amendments to
the Company's Articles of Incorporation which would affect the
ability of third parties to take over or change control of the
Company. Neither management nor the Board of Directors has any
present intention to use the authorized shares of preferred stock
as an anti-takeover measure.
Moreover, under the rules of the National Association of
Securities Dealers (to which the Company is subject because its
common stock is listed on the Nasdaq National Market), the Company
is prohibited from issuing any class of securities having the
effect of nullifying, restricting or disparately reducing the per
share voting rights of the outstanding common stock of the Company.
Violations of this prohibition would likely result in the delisting
of the Company's common stock from the Nasdaq National Market and,
therefore, would deter any issuance of preferred stock by the
Company having such an effect.
The Board of Directors recommends that shareholders vote FOR
the approval and adoption of the proposed Amendment to the
Company's Articles of Incorporation.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of management and the Audit Committee, the
Board of Directors has appointed, subject to ratification by the
shareholders, the accounting firm of Coopers & Lybrand to examine
the financial statements of the Company for the year 1994.
Representatives of Coopers & Lybrand will be present at the initial
Annual Meeting of Shareholders and will have an opportunity to make
a statement, if they desire to do so. They will be available to
respond to appropriate questions.
Commencing with fiscal year 1993, Coopers & Lybrand replaced
Ernst & Young as the Company's independent public accountant. This
change was made after management and the Audit Committee reviewed
bids for performing such services received from four public
accounting firms, including Ernst & Young. Based on the review of
the competing bids, management and the Audit Committee believed
that Coopers & Lybrand would provide the services required by the
Company at a lower cost. The appointment of Coopers & Lybrand to
examine the financial statements of the Company for fiscal year
1993 was ratified by the shareholders of the Company at the
Company's 1993 Annual Meeting of Shareholders.
During fiscal years 1993, 1992 and 1991, the audit reports
issued with respect to the Company's financial statements did not
contain an adverse opinion or disclaimer of opinion, or a
qualification as to uncertainty, audit scope, or accounting
principles. During 1992 and 1991, the two fiscal years immediately
preceding the replacement of Ernst & Young as the Company's
independent accountant, there were no disagreements between the
Company and Ernst & Young on any matter of accounting principles or
practices, financial statement, disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction
of Ernst & Young, would have caused it to make a reference to the
subject matter of the disagreement in connection with its audit
report.
See "Director Meetings and Committees" for information
regarding the Company's Audit Committee.
The Board of Directors recommends that the shareholders vote
FOR the ratification of the appointment of Coopers & Lybrand.
FINANCIAL STATEMENTS
The Company's 1993 Annual Report to Shareholders accompanies
this Proxy Statement. If you acquired your shares subsequent to
the Record Date (March 7, 1994), a copy of the 1993 Annual Report
will be mailed to you on request. ADDITIONAL COPIES OF THE 1993
ANNUAL REPORT, COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR 1993 AND COPIES OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM
10-K MAY BE OBTAINED, WITHOUT CHARGE, BY WRITTEN REQUEST DIRECTED
TO ROBERT H. IRVIN, SECRETARY, MAYFLOWER GROUP, INC., 9998 NORTH
MICHIGAN ROAD, CARMEL, INDIANA 46032.
PROPOSALS OF SHAREHOLDERS
In accordance with the current By-Laws of the Company, notice
of proposals of shareholders intended to be presented at the Annual
Meeting of Shareholders to be held on April 27, 1994, must be in
writing and delivered to or mailed to and received by the Secretary
of the Company at the principal executive offices of the Company
not less than sixty days nor more than ninety days prior to the
Annual Meeting of Shareholders. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder
proposes to bring before the Annual Meeting: (a) a brief
description of the business desired to be brought before the Annual
Meeting and the reasons for conducting such business at the Annual
Meeting; (b) name and address, as they appear on the Company's
books, of the shareholder proposing such business; (c) the number
of shares of the Company which are beneficially owned by the
shareholder; and (d) any material interest of the shareholder in
such business.
In order for proposals of shareholders to be included in the
Company's Proxy Statement and form of proxy for the 1995 Annual
Meeting of Shareholders, the proposals must be received at the
corporate headquarters of Mayflower Group, Inc. no later than
December 31, 1994.
OTHER MATTERS
As of the date of this Proxy Statement, the management of the
Company has no knowledge of any matters to be presented for
consideration at the meeting other than those referred to
previously. If any other matters properly come before the meeting,
the persons named in the accompanying form of proxy intend to vote
such proxy to the extent entitled in accordance with their best
judgment.
By order of the Board of Directors,
Robert H. Irvin, Secretary
Dated: March 31, 1994
All shareholders are cordially invited to attend the meeting in
person. TO INSURE YOUR REPRESENTATION AT THE MEETING, PLEASE
COMPLETE AND PROMPTLY MAIL YOUR PROXY IN THE RETURN ENVELOPE
PROVIDED. This will not prevent you from voting in person, should
you so desire.
A P P E N D I X
Contents Page
1994 Restricted Stock Plan ii
Article 5 of the Articles of Incorporation
Amended and Restated to Reflect the
Proposed Amendments viii
i
MAYFLOWER GROUP, INC.
1994 RESTRICTED STOCK PLAN
1. Establishment. Mayflower Group, Inc. ("Mayflower")
hereby establishes a share incentive plan for officers and other
key employees of Mayflower and its wholly-owned subsidiaries
(individually a "Subsidiary" and collectively, the "Subsidiaries"),
as described herein, which shall be known as the Mayflower Group,
Inc. 1994 Restricted Stock Plan (the "Plan").
2. Purpose. The purpose of the Plan is to enable Mayflower
and its Subsidiaries to retain and motivate officers and other key
employees who provide valuable service to Mayflower and its
Subsidiaries, and to provide such officers and key employees with
an opportunity to acquire shares of common stock, without par
value, of Mayflower ("Common Stock"), thereby providing them with
an increased incentive to work for the success of Mayflower and its
Subsidiaries and better enabling such entities to attract and
retain capable officers and other key employees.
3. Administration of the Plan. The Plan shall be
administered, construed and interpreted by the Compensation
Committee of the Board of Directors of Mayflower (the "Committee").
The Committee shall consist of at least two (2) members of the
Board of Directors of Mayflower (the "Board"), who shall be
designated from time to time by the Board. No member of the
Committee shall, during the one year prior to his service at any
time as a member of the Committee, have been granted or awarded
equity securities pursuant to this Plan or any other plan of
Mayflower or any of its Subsidiaries, except:
(i) a formula plan meeting the conditions of Rule
16b-3(c)(2)(ii) promulgated under Section 16 of the Securities
Exchange Act of 1934, as amended (the "1934 Act");
(ii) an ongoing securities acquisition plan meeting the
conditions of Rule 16b-3(d)(2)(i) promulgated under Section 16
of the 1934 Act; or
(iii) another plan or arrangement a grant or award
under which does not, in the opinion of Mayflower's counsel,
cause a member of the Committee to fail to qualify as a
"disinterested person" under Rule 16b-3(c)(2)(i) promulgated
under Section 16 of the 1934 Act.
The decision of a majority of the members of the Committee shall
constitute the decision of the Committee, and the Committee may act
either at a meeting at which a majority of the members of the
Committee is present or by a written consent signed by all members
of the Committee.
ii
The Committee shall have the sole, final and conclusive
authority to determine, consistent with and subject to the
provisions of the Plan:
(a) the individuals to whom restricted share awards
shall be granted under the Plan (the "Grantees");
(b) the time when restricted shares of Common Stock
shall be granted hereunder;
(c) the number of shares of Common Stock of Mayflower to
be covered under each restricted share grant;
(d) the period of restrictions for restricted share
grants (the "Period of Restriction"), which shall in no event
be less than six (6) months; and
(e) the terms and conditions of the agreements by which
restricted shares granted shall be evidenced (the "Restricted
Share Agreements").
The Committee shall also have authority to prescribe, amend and
rescind rules and regulations relating to the Plan, and to make all
other determinations necessary or advisable in the administration
of the Plan.
4. Eligibility. The Committee may, consistent with the
terms hereof, grant restricted shares to officers (including
officers who are members of the Board of Directors) and other key
employees of Mayflower or of a Subsidiary who in the opinion of the
Committee from time to time provide valuable service to Mayflower
or a Subsidiary.
5. Stock Subject to the Plan. The maximum number of shares
with respect to which restricted share awards may be made under
this Plan is 500,000 shares of Common Stock, which may be
authorized but unissued shares of Mayflower. Subject to Section 6
hereof, the shares of Common Stock for which awards may be granted
under the Plan shall not exceed that number. If any restricted
share grant is forfeited in whole or in part, the unpurchased or
forfeited shares subject thereto shall (unless the Plan shall have
terminated) become available for other awards under the Plan.
6. Adjustment of Shares. In the event of any change after
the effective date of the Plan in the outstanding stock of
Mayflower by reason of any reorganization, recapitalization, stock
split, stock dividend, combination of shares, exchange of shares,
merger or consolidation, liquidation, or any other change after the
effective date of the Plan in the nature of the shares of Common
Stock of Mayflower, the Committee shall determine what changes, if
any, are appropriate in the number and kind of shares reserved
iii
under the Plan and in the number and kind of shares covered by
outstanding awards granted under the Plan. Any determination of
the Committee hereunder shall be conclusive.
7. Restricted Share Awards. The Committee may grant
restricted share awards of Common Stock which entitle Grantees to
receive shares of Common Stock. Each restricted share award shall
be evidenced by a Restricted Share Agreement between Mayflower and
the Grantee, which Agreement shall set forth the terms and
conditions of the award to the extent not inconsistent with the
provisions of the Plan. Each restricted share award shall provide
for the distribution of the awarded shares free of all restrictions
at the end of the Period of Restriction, as specified in the
Restricted Share Agreement.
8. Duration of the Plan. Subject to the Board's right to
earlier terminate the Plan pursuant to Section 20 hereof, the Plan
shall remain in effect until all shares of Common Stock subject to
it shall have been acquired by Grantees pursuant to the provisions
hereof and shall have been released from restrictions pursuant to
Sections 9, 10, 15 or 16 hereof. Notwithstanding the foregoing, no
Shares may be granted under the Plan after April 27, 2004.
9. Transferability. Except as contemplated by Sections 10,
15 and 16 hereof, the restricted shares granted hereunder may not
be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until such conditions as were specified by the
Committee, in its sole discretion, and set forth in the Restricted
Share Agreement are satisfied.
10. Removal of Restrictions. Except as otherwise provided in
Sections 9, 15 and 16 hereof, restricted shares covered by each
restricted share grant made under this Plan shall become freely
transferable by the Grantee after the last day of the Period of
Restriction.
11. Other Restrictions. The Board shall impose such other
restrictions on any shares of Common Stock granted pursuant to the
Plan as it may deem advisable.
12. Certificate Legend. Each certificate representing
restricted shares granted pursuant to this Plan shall bear the
following legend:
"The sale or other transfer of the shares
represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to
certain restrictions on transfer set forth in the
Mayflower Group, Inc. 1994 Restricted Stock Plan and a
Restricted Share Agreement dated . A copy of
the Restricted Stock Plan and such Restricted Share
Agreement may be obtained from the Secretary of the
Corporation."
iv
Once the shares are released from the restrictions set forth in
Section 9 hereof, the Grantee shall be entitled to have the legend
required by this Section 12 removed from the certificate(s)
representing the Common Stock obtained pursuant to a Restricted
Share Agreement.
13. Voting Rights. During the Period of Restriction,
Grantees holding restricted Shares granted hereunder may exercise
full voting rights with respect to those Shares.
14. Dividends and Other Distributions. During the Period of
Restriction, Grantees holding restricted shares granted hereunder
shall be entitled to receive all dividends and other distributions
paid with respect to those shares while they are so held. If any
such dividends or distributions are paid in shares of Common Stock,
such shares of Common Stock shall be subject to the same
restrictions on transferability as the restricted shares with
respect to which they were paid.
15. Effect of Termination of Employment Due to Retirement. In
the event that a Grantee terminates his or her employment with
Mayflower or its Subsidiaries because of Retirement (as hereinafter
defined), any remaining Period of Restriction applicable to the
restricted shares pursuant to Section 9 hereof shall automatically
terminate and, except as otherwise provided in Section 11, the
shares shall thereby be free of restrictions and freely
transferable. For purposes of the Plan, "Retirement" means
termination of employment due to retirement by an employee who has
attained age 55 and has at least ten (10) years of service with the
Company.
16. Effect of Termination of Employment without Cause or Due
to Death, Disability. In the event a Grantee terminates his or her
employment with Mayflower or its Subsidiaries because of death,
Permanent and Total Disability (as hereinafter defined) or the
Grantee's employment with Mayflower or its Subsidiaries is
involuntarily terminated by Mayflower or its Subsidiaries without
Cause (as hereinafter defined) during the Period of Restriction,
any remaining Period of Restriction applicable to the restricted
shares pursuant to Section 9 hereof shall automatically terminate
and, except as otherwise provided in Section 11, the Common Stock
shall thereby be free of restrictions and freely transferable. For
purposes of the Plan, (i) "Permanent and Total Disability" means if
an employee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than twelve (12) months; provided, however, an employee shall
not be considered to be Permanently and Totally Disabled unless he
or she furnishes proof of the existence thereof in such form and
manner, and at such times, as the Committee may require, and (ii)
"Cause" shall mean fraud, dishonesty, theft of corporate assets or
other gross misconduct by a Grantee.
v
17. Other Termination of Employment. In the event that a
Grantee's employment with Mayflower or its Subsidiaries is
terminated by Mayflower or its Subsidiaries for Cause or by the
Grantee during the Period of Restriction, then any Common Stock
still subject to restrictions at the date of such termination shall
automatically be forfeited and returned to Mayflower.
18. No Employment Rights Created. Nothing in this Plan or in
any grant of restricted shares shall interfere with or limit in any
way the right of Mayflower or its Subsidiaries to terminate any
Grantee's employment at any time, nor confer upon any Grantee any
right to continue in the employ of Mayflower or its Subsidiaries.
19. Nontransferability of Rights or Restricted Shares. No
Common Stock granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution,
until the termination of the applicable Period of Restriction. All
rights granted to a Grantee under the Plan shall be exercisable
during the Grantee's lifetime only by the Grantee, or the guardians
or legal representatives of the Grantee. Upon the death of a
Grantee, the personal representative or beneficiary of the Grantee
may exercise the Grantee's rights under the Plan.
20. Amendment and Termination. The Board may at any time
amend, modify, alter, or terminate this Plan, except that such
amendment, modification, alteration or termination may not
adversely affect the rights of any existing Grantee, without the
consent of such Grantee, and except that approval of the
Shareholders of Mayflower must be obtained for any amendment which
would: (i) materially increase the benefits accruing to
participants under the Plan, (ii) materially increase the number of
securities which may be issued under the Plan; or (iii) materially
modify the requirements as to eligibility for participation in the
Plan.
21. Tax Withholding. Mayflower or its Subsidiaries, as
appropriate, shall have the right to deduct from all payments any
Federal, state, or local taxes required by law to be withheld with
respect to such payments and, in the case of awards paid in shares
of Common Stock, the Grantee or other person receiving such shares
of Common Stock may be required to pay to Mayflower or its
Subsidiaries, as appropriate, the amount of any such taxes which
Mayflower or its Subsidiaries is required to withhold with respect
to such shares prior to delivery of any certificate or certificates
for such shares.
22. Tax Benefit. The Committee may, in its sole discretion,
include a provision in any Restricted Share Agreement that provides
for an additional cash payment from Mayflower to the Grantee of
vi
such award equal to all or a portion of the tax benefit to be
received by Mayflower attributable to its federal income tax
deduction, if any, resulting from the vesting, cancellation,
disposition or other transaction involving the Common Stock subject
to the restricted share award.
23. Indemnification. Each person who is or shall have been
a member of the Committee shall be indemnified and held harmless by
Mayflower against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she
may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him
or her in settlement thereof with Mayflower's approval, or paid by
him or her in satisfaction of a judgment in any such action, suit
or proceeding against him or her, provided he or she shall give
Mayflower an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall
not be exclusive or any other rights of indemnification to which
such persons may be entitled under Mayflower's Articles of
Incorporation or Code of By-Laws, as a matter of law, or otherwise,
or any power that Mayflower may have to indemnify them or hold them
harmless.
24. Governing Law. The Plan, and all grants and other
documents delivered hereunder, shall be construed in accordance
with and governed by the laws of Indiana.
25. Expenses of Plan. The expenses of administering the Plan
shall be borne by Mayflower and its Subsidiaries.
26. Successors. This Plan shall be binding upon the
successors and assigns of Mayflower and its Subsidiaries.
27. Effective Date. The Plan shall become effective upon
its adoption by the Board of Directors, subject to approval by an
affirmative vote of the holders of a majority of the Shares of
Mayflower present in person or by proxy and entitled to vote on the
adoption of the Plan at a duly held meeting.
vii
ARTICLE 5
OF THE
ARTICLES OF INCORPORATION
AMENDED AND RESTATED
TO
REFLECT THE PROPOSED AMENDMENTS
ARTICLE 5
Terms of Shares
Section 5.01. Amount. The total number of shares which the
Corporation shall have authority to issue is 35,000,000 shares of
capital stock, consisting of 30,000,000 shares of common stock,
without par value (the "Common Stock") and 5,000,000 shares of a
separate and single class of shares of preferred stock, which may
be issued in one or more series (the "Preferred Stock").
Section 5.02. Preferred Stock. The Board of Directors is
vested with the authority to determine and state the designations
and the relative preferences, limitations, voting rights, if any,
and other rights of each series of Preferred Stock by the adoption
and filing in accordance with the Act, before the issuance of any
shares of such series, of an amendment or amendments to these
Articles determining the terms of such series. All shares of the
same series of Preferred Stock shall be identical with each other
in all respects.
Section 5.03. Issue and Consideration for Shares. Shares of
stock may be issued by the Corporation for such an amount of
consideration as may be fixed from time to time by the Board of
Directors.
Section 5.04. Voting Rights of Common Stock. Every holder of
shares of Common Stock of the Corporation shall have the right, at
every shareholders' meeting, to one vote for each share of Common
Stock standing in his name on the books of the Corporation on the
record date, except as provided in the Act.
viii
MAYFLOWER GROUP, INC.
9998 N. Michigan Road, Carmel, Indiana 46032
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Roderick M. Hills and Sheldon M. Stone, or either of them with full
power of substitution, are hereby authorized to represent and vote
all the shares of common stock of the undersigned at the Annual
Meeting of the Shareholders of Mayflower Group, Inc. to be held at
9998 N. Michigan Road, Carmel, Indiana, April 27, 1994, at 11:00
A.M. local time (Eastern Standard Time), or any adjournment
thereof, with all powers which the undersigned would possess if
personally present, in the following manner:
1. Election of five (5) Directors proposed by the Board of
Directors as listed below:
[ ] FOR all nominees listed below (except as
marked to the contrary below)
[ ] WITHHOLD AUTHORITY (to vote
for all nominees listed below)
R.M. Hills; P.J. Lewis; L.R. Scott; M.L. Smith; S.M. Stone.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, mark the first box and strike a line through that
nominee's name in the list above)
2. Approval of the adoption of the Mayflower Group, Inc. 1994
Restricted Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of amendment of 1992 Director Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval and adoption of amendments to the Articles of
Incorporation of Mayflower Group, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Ratification of the appointment of Coopers & Lybrand as
auditors for the audit of financial statements for the year
ending December 31, 1994.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the Proxies are authorized to vote upon
such other business (none at the time of solicitation of this
Proxy) as may properly come before the meeting, or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSITIONS.
THIS PROXY SHALL BE VOTED AS DIRECTED. IN THE ABSENCE OF A
CONTRARY DIRECTION, IT SHALL BE VOTED FOR THE PROPOSALS AND THE
PROXIES MAY VOTE IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS
PROPERLY MAY COME BEFORE THE MEETING OR ADJOURNMENT THEREOF.
The undersigned acknowledge receipt of Notice of said Meeting, the
accompanying Proxy Statement and the 1993 Annual Report to
Shareholders, and hereby revokes all proxies heretofore given by
the undersigned for said Meeting.
THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTING THEREOF.
Dated _______________________________, 1994.
________________________________
Signature of Shareholder
________________________________
Signature of Shareholder
(if held jointly)
PLEASE DATE THIS PROXY AND SIGN YOUR NAME OR NAMES EXACTLY AS SHOWN
HEREON, WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE SIGN YOUR FULL TITLE AS SUCH. IF MORE THAN ONE
TRUSTEE, OR JOINT OWNERS, ALL MUST SIGN. PLEASE RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
