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:
[ ] Preliminary Proxy Statement
[X] 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)
(Paid with Preliminary Proxy Material filed March 18, 1994)
[ ] $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:
<PAGE>
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 the amendment of the 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. The approximate date
that these materials will first be sent or given to shareholders
is April 5, 1994.
Dated March 31, 1994.
Mayflower Group, Inc.
Robert H. Irvin, Secretary
By order of the Board of Directors<PAGE>
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 (8 persons) 6,640,209 52.4%
Five Percent Shareholders
The TCW Group, Inc.
and affiliates
865 South Figueroa Street
Los Angeles, California 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.
<TABLE>
<CAPTION>
Information about the nominees is set forth below:
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 Alexis 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 January 1990. 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 April 1991. He has been Chairman of the Board and
Chief Executive Officer of Transit 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 since June 1985. 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.
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table contains information regarding the compensation paid to each of
the Company's Executive Officers.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Other Securities All
Annual Under- Other Com-
Name and Principal Compensa- Restricted lying pensation
Position Year Salary Bonus tion (3)(4) Stock Awards Options (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 1992 350,000 87,500 8,140 0 20,000 9,567
and Chief Executive 1991 250,000 30,000 -- 0 0 --
Officer (1)
Patrick F. Carr 1993 $220,000 $ 0 $4,371 0 15,000 $6,494
Senior Vice President 1992 200,000 100,000 3,414 0 15,000 5,915
Chief Financial 1991 171,250 0 -- 0 0 --
Officer and Treasurer(2)
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>
<PAGE>
<TABLE>
<CAPTION>
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 31, 1993:
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 PerExpiration 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
$11.50 per share.
</TABLE>
<PAGE>
Defined Benefits Plans
The Company maintains no employee benefit plans for any of
its officers or employees. All officers and employees of the
Company are also officers or employees of either Transit or
Contract Services and participate in employee benefit plans
maintained by those operating subsidiaries. Transit maintains
the Mayflower Employees' Pension Plan (the "Transit Plan") for
its officers and employees and those of certain of its
subsidiaries, except for certain classes of employees, including
those covered by collective bargaining agreements which do not
provide for participation under the Pension Plan. Contract
Services maintains the Mayflower Contract Services, Inc.
Executive Retirement Plan (the "MCS Plan") for certain of its
senior officers.
Transit Plan. The table below shows the estimated annual
benefits provided by the Transit Plan, upon retirement on
December 31, 1993, at age 65, to persons with the specified five
year average earnings and years of service classification. The
five year average earnings are the average of the highest five
consecutive calendar years of all years of covered employment.
The benefits shown do not take into account limitations imposed
by Section 415 of the Internal Revenue Code (the "Code").
<TABLE>
<CAPTION>
Five
Year Average 15 Years' 20 Years' 25 Years' 30 Years' 35 Years'
Earnings ($) 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 Services' 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 did not always remain competitive or reflect
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 years
covered 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 any 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, as hereinafter defined, 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 Company's 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 was filed under cover of Form SE
with the Preliminary Proxy material on March 18, 1994].
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 is 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
Company has no present plans, arrangements, agreements or
understandings regarding the issuance of preferred stock, should
the proposed Amendment be approved. 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. The preferred stock
could also be issued without voting rights. The issuance of non-
voting preferred stock would dilute the equity ownership of the
Company without affecting its current voting control.
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. <PAGE>
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 ix
i<PAGE>
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
ii<PAGE>
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.
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,
iii<PAGE>
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 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:
iv<PAGE>
"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."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
v<PAGE>
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.
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
vi<PAGE>
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 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.
vii<PAGE>
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.
viii<PAGE>
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.
ix<PAGE>
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.
