SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1943 (AMENDMENT NO. )
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TransFinancial Holdings, Inc.
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TRANSFINANCIAL
[COMPANY LOGO - GRAY/BLACK]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 25, 2000
The Annual Meeting of Shareholders of TransFinancial Holdings, Inc.
("TransFinancial" or "the Company"), a Delaware corporation, will be held at the
Holiday Inn, 12601 West 95th Street, Lenexa, Kansas, on Tuesday, July 25, 2000,
at 9:00 a.m., Central Time, for the following purposes:
1. To consider and act upon a proposal to elect five (5)
directors of TransFinancial;
2. To consider and act upon such other matters as may properly
come before the meeting and any adjournment thereof.
The foregoing matters are more fully described in the accompanying Proxy
Statement.
Shareholders of record on the books of TransFinancial at the close of
business on June 16, 2000 will be entitled to receive notice of and to vote at
the meeting. A complete list of such Shareholders will be available for
examination at the principal executive offices of TransFinancial Holdings, Inc.
at 8245 Nieman Road, Suite 100, Lenexa, Kansas, by any Shareholder, for any
purpose germane to the Annual Meeting, for the 10 days immediately preceding the
Annual Meeting.
YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU
ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE. Returning your proxy now will not interfere with your right
to attend the meeting or to vote your shares personally at the meeting, if you
wish to do so. The prompt return of your proxy may save TransFinancial
additional expenses of solicitation.
All Shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors
Timothy P. O'Neil,
President, Chief Executive Officer and
Corporate Secretary
Lenexa, Kansas
June 16, 2000
TRANSFINANCIAL HOLDINGS, INC.
June 16, 2000
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 25, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of TransFinancial Holdings, Inc.
("TransFinancial" or "the Company") to be used at the 2000 Annual Meeting of
Shareholders of the Company ("Annual Meeting") which will be held at the Holiday
Inn, 12601 West 95th Street, Lenexa, Kansas, on Tuesday, July 25, 2000, at 9:00
a.m. Central Time, and any adjournment thereof. All costs of the solicitation
will be borne by the Company.
A copy of the Company's annual report for the fiscal year ended December
31, 1999, is enclosed herewith. Such report is not incorporated in this Proxy
Statement and is not to be deemed a part of the proxy solicitation material.
PROXIES AND VOTING
Shareholders of record at the close of business on June 16, 2000 are
entitled to one vote at the meeting for each share held. There were outstanding
on June 16, 2000, 3,278,291 shares of common stock, par value $.01 per share, of
the Company ("Common Stock"). Such shares have no cumulative voting rights.
The Company has no other class of stock outstanding.
Shareholders who execute proxies retain the right to revoke them at any
time before they are voted by giving to the Corporate Secretary of the Company
written notice of revocation bearing a date later than the proxy date, by
submission of a later-dated proxy or by revoking the proxy and voting in person
at the Annual Meeting. Attendance at the Annual Meeting will not in and of
itself constitute revocation of a proxy. Unless so revoked, proxies properly
executed and returned will be voted in accordance with the instructions given
therein or, if properly executed but no instructions are given, will be voted
for the nominees for director named herein.
Proxies submitted by Shareholders prior to the Annual Meeting will be
tabulated by the Company's transfer agent, UMB Bank, N.A. Votes cast and
proxies received at the Annual Meeting will be manually tabulated by an
inspector of election and the proxy count certified by the Company's transfer
agent will be adjusted accordingly. Abstentions and broker non-votes are each
counted for purposes of determining whether there is a quorum at the Annual
Meeting. Abstentions are counted in the tabulations of votes cast on proposals
presented to shareholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal presented to the Shareholders has been
approved.
The five individuals receiving the greatest number of votes cast at the
meeting will be elected as directors of the Company.
PROPOSAL 1
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting to serve until the
2001 Annual Meeting of the Shareholders of the Company or until their successors
are elected and qualified. J. Richard Devlin and David D. Taggart are not
standing for re-election. In the absence of contrary instructions, each proxy
will be voted for the election of the persons listed below.
Each of the nominees has advised the Company that he can and will serve as
a director of the Company if elected. If for any reason any of the nominees
shall become unavailable for election, the persons named in the accompanying
proxy will vote for the other nominees and for a substitute nominee or nominees
if so designated by the Board of Directors. The following information is given
with respect to each nominee as of June 16, 2000.
Director
of the
Name, Principal Occupation and Company
other Directorships Age Since
William D. Cox 57 1991
Chairman of the Board of Directors since June 1997. Mr.
Cox has served as President of various family-owned,
commercial and residential construction and land
development companies in Wichita, Kansas, currently
Applewood Homes, Inc., from 1967 to the present.
Harold C. Hill, Jr. 64 1995
Retired as a partner of Arthur Andersen LLP in 1993. Mr.
Hill's 35 years of service with that firm included
responsibility as partner in charge of the
transportation, financial services and government
practices in Kansas City, and National Technical
Coordinator of that firm's trucking industry practice
group.
Roy R. Laborde 61 1991
Vice Chairman of the Board of Directors since June 1997.
Chairman of the Board of Directors from May 1992 to June
1997. President of Amboy Grain, Inc., Amboy, Minnesota,
since 1985; President and Chief Operating Officer for
Rapidan Grain & Feed, Rapidan, Minnesota, from 1968
through 1988 and has continued to merchandise grain for
that company.
Timothy P. O'Neil 43 1995
President and Chief Executive Officer of the Company
since May 1995. From October 1989, through May, 1995,
Mr. O'Neil served in various positions with the Company,
including, Senior Vice President, Vice President,
Treasurer and Director of Finance. From March 1997 to
October 1998, he has also served as President and Chief
Executive Officer of Universal Premium Acceptance
Corporation ("UPAC"), a wholly-owned subsidiary of the
Company. Mr. O'Neil has also served as President, Chief
Executive Officer, and Chief Financial Officer and
Treasurer of American Freight System, Inc. ("AFS"), a
wholly-owned subsidiary of the Company, since July, 1991.
Clark D. Stewart 60 1997
President and Chief Executive Officer of Butler National
Corporation, a publicly-held company headquartered in
Olathe, Kansas, with operations primarily in the
manufacture and modification of aerospace switching
equipment and management services for Indian gaming
enterprises, since September 1989.
During the fiscal year ended December 31, 1999, the Board of Directors held
five (5) regular meetings and one (1) special meeting. Each director attended
75 percent or more of the total number of all meetings of the Board and of
committees of which he or she was a member during 1999.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its Subsidiaries received
compensation of $8,000 per annum, plus $750 for each board meeting attended and
$750 for each committee meeting attended when held on a day on which they were
not compensated for attending another meeting, except the Chairman of the Board
who received $1,500 for each board meeting and committee meeting attended and
chairmen of Committees who received $1,000 for each committee meeting chaired.
Directors received $200 for telephonic meetings of either the board or its
committees. Directors were also reimbursed for reasonable travel and other
expenses incurred by them in performance of their duties as directors of the
Company. Directors who are not employees receive options to purchase 2,000
shares of Common Stock on the first stock trading day immediately following each
Annual Meeting of the Shareholders of the Company at which they are elected to
the Board of Directors, at market value on such date.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires directors, executive officers and beneficial owners of
more than ten percent of the Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission
(the "SEC") and the American Stock Exchange, and to provide copies to the
Company. Based solely on a review of the copies of such reports provided to the
Company and written representations from the directors and executive officers,
the Company believes that all applicable Section 16(a) filing requirements have
been met.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has standing Audit, Compensation and
Corporate Governance Committees.
Members of the Audit Committee are Harold C. Hill, Jr. (Chairman), J.
Richard Devlin and William D. Cox. The Audit Committee met two times during the
fiscal year ended December 31, 1999. The Audit Committee advises, reports to
and makes recommendations to the Board of Directors on (i) audit procedures of
the Company and its subsidiaries, (ii) general policy with regard to audit
matters, (iii) the financial and accounting controls of the Company and its
subsidiaries, (iv) nominating independent accountants to conduct the annual
examination of the Company's financial statements, and (v) the results of the
examination performed by the independent accountants.
Members of the Compensation Committee are William D. Cox (Chairman), J.
Richard Devlin and Clark D. Stewart. The Compensation Committee met one time
during the fiscal year ended December 31, 1999. The Compensation Committee (i)
approves salaries and other compensation to be paid to the officers of the
Company, (ii) administers the 1992 Incentive Stock Plan and the 1998 Long-Term
Incentive Plan and makes recommendations for option grants under these plans,
and (iii) reviews and makes recommendations to the Board of Directors on any
proposed employee benefit plans and any proposed material changes to existing
employee benefit plans for the Company and its subsidiaries.
Members of the Corporate Governance Committee are Harold C. Hill, Jr.
(Chairman), William D. Cox and Roy R. Laborde. The Corporate Governance
Committee met one time during the fiscal year ended December 31, 1999. The
Corporate Governance Committee advises, reports to and makes recommendations to
the Board of Directors on corporate governance issues, including nominations for
the Board of Directors of the Company. The Corporate Governance Committee will
consider candidates for the Board of Directors suggested by shareholders.
Shareholders desiring to suggest candidates for nomination at the 2001 Annual
Meeting should advise the Secretary of the Company in writing by December 31,
2000 and include sufficient biographical material to permit an appropriate
evaluation. The Corporate Governance Committee and the Board of Directors
continue to consider qualified candidates for the Board of Directors and may add
new members to the Board of the Directors before the 2001 Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE NOMINEES FOR DIRECTOR PRESENTED IN PROPOSAL 1.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as independent accountants for the
Company since November 1995. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting with an opportunity to make a
statement, if they desire to do so, and to respond to appropriate questions.
The Audit Committee of the Board of Directors has not met to determine its
recommendation of an independent accounting firm for the 2000 fiscal year. The
Audit Committee intends to make such determination and submit such
recommendation to the Board of Directors prior to the end of the third quarter
of the current fiscal year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of June 16, 2000, unless
otherwise indicated, with respect to the beneficial ownership of the Company's
Common Stock by (a) persons known to the Company to be beneficial owners of 5%
or more of the outstanding Common Stock, (b) executive officers listed in the
Summary Compensation Table, (c) directors and nominees for director and (d) all
directors and executive officers of the Company as a group.
Name of Beneficial Owners Amount and
(and address of beneficial owners Nature of
of five percent or more of the Beneficial Percent
outstanding common stock) Ownership(1) of
Class
Franklin Advisory Services
Charles B. Johnson
Rupert H. Johnson, Jr.
Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA 94404................................. 265,000 (2) 8.08%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401.............................. 296,800 (3) 9.05%
Roy R. Laborde....................................... 172,365 (7) 5.24%
Care of TransFinancial Holdings, Inc.
8245 Nieman Road, Suite 100
Lenexa, KS 66214
Timothy P. O'Neil.................................... 205,360 (8) 6.17%
8245 Nieman Road, Suite 100
Lenexa, KS 66214
William D. Cox....................................... 84,000 (4) 2.55%
J. Richard Devlin.................................... 6,000 (5) .18%
Harold C. Hill, Jr................................... 11,500 (6) .35%
Clark D. Stewart..................................... 4,000 (9) .12%
David D. Taggart..................................... 20,000 (10) .61%
Kurt W. Huffman...................................... 23,000 (11) .70%
Directors and executive officers as a
group (8 persons, including the above)............ 526,225 (12) 15.46%
(1) Unless otherwise indicated, each person has sole voting and investment
power with respect to the shares listed.
(2) The shares shown in the table are beneficially owned by one or more open
or closed-end investment companies or other managed accounts which are
advised by Franklin Advisory Services, Inc. ("Franklin"), a subsidiary of
Franklin Resources, Inc. ("FRI"). Franklin has all investment and/or voting
power over the shares owned by such advisory clients and may be deemed the
beneficial owner of the shares shown in the table. Charles B. Johnson and
Rupert H. Johnson, Jr. (the "Principal Shareholders") each own in excess of
10% of the outstanding common stock of FRI and are the principal shareholders
of FRI. FRI, the Principal Shareholders and Franklin disclaim any economic
interest or beneficial ownership in any of the shares. The information
contained in this footnote was obtained from the Amendment No. 3 to Schedule
13G filed by these persons on February 2, 2000.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 296,800 shares, all of
which shares are held in portfolios of four registered open-end investment
companies, or in series of investment vehicles, all of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership of
all such shares. The information as to the beneficial ownership of
Dimensional was obtained from the Schedule 13G filed by that company on
February 11, 2000.
(4) Includes 15,000 shares subject to exercisable outstanding stock options.
(5) Includes 5,000 shares subject to exercisable outstanding stock options.
(6) Includes 4,500 shares in the Francile Hill Revocable Trust. Both Mr.
Hill and Francile Hill are trustees and each has shared voting and investment
power. Also includes 7,000 shares subject to exercisable outstanding stock
options.
(7) Includes 13,150 shares subject to exercisable outstanding stock options
and 1,415 shares owned by and registered in the name of his wife, over which
they share voting power but Mrs. Laborde retains sole investment power.
(8) Includes 52,000 shares subject to exercisable outstanding stock options.
Does not include 9,000 shares held in various irrevocable trusts for the
benefit of Mr. O'Neil's children and over which he has no voting or
investment power.
(9) Includes 3,000 shares subject to exercisable outstanding stock options.
(10)Represents 20,000 shares subject to exercisable outstanding stock
options.
(11)Includes 10,000 shares subject to exercisable outstanding stock options.
(12)Includes a total of 125,150 shares subject to exercisable outstanding
stock options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company did not engage in any individual transactions or series of
transactions with members of management or nominees for director during 1999 in
which the amount involved exceeded $60,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists exclusively of non-employee directors
appointed by resolution of the entire Board of Directors. William D. Cox has
been a non-employee Chairman of the Board of Directors since the 1997
Organization Meeting of the Board of Directors.
EXECUTIVE OFFICER COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT
The responsibilities of the Compensation Committee ("Committee") include
approval of the salaries and other compensation paid to executive officers of
the Company. The Committee attempts to set executive officers' compensation at
levels which are fair and reasonable to the shareholders of the Company and
which will attract, motivate, retain and appropriately reward experienced
executive officers who contribute to the success of the Company and the returns
to its shareholders.
In 1998, the Committee engaged a compensation consulting company to perform
a review of the Company's executive compensation program. The current
compensation levels were compared to geographical and industry averages and
found to be substantially less than average for all executive positions. The
compensation consulting company reviewed various compensation surveys and
prepared for the Committee a summary of average salary, average incentive
compensation and average total compensation for different executive positions,
summarized according to geographical area (generally the Kansas City and Des
Moines metropolitan areas), by industry (motor carrier trucking and financial
services) and by size of company (amount of revenues). The Committee does not
know whether the companies included in the compensation surveys reviewed by the
consultant include any companies used by the Company in its peer group index in
the performance graph. In order to bring the Company's current executive
management team closer to average market total compensation levels, and to tie
each executive's performance to the strategic plan of the Company, the Committee
adopted a new executive compensation program. The new program divides the
elements of compensation into two categories: performance and opportunity.
Performance compensation is comprised of base salary paid to each executive to
accomplish their standard job duties, functions and responsibilities.
Opportunity compensation is comprised of "at risk" short-term and long-term
incentives which reward the management team members for achieving or exceeding
measurable goals. The short-term incentive compensation program permits
executives the opportunity to earn an additional 43% of their base compensation
by achieving budgeted net income levels in each operating segment or the Company
as a whole, and meeting certain other subjective criteria. Executives also have
the opportunity to earn additional short-term incentive compensation ratably if
the operating segments or the Company as a whole exceed budgeted net income
levels. The Committee selected the various amounts which may be earned by an
executive under the short-term incentive compensation program in order to cause
the executive's total compensation package to meet the Company's target for the
executive's total compensation if, and only if, the Company meets budgeted net
income levels. To ensure internal equity each executive's total compensation
was benchmarked at 40% to 75% of the CEO's total compensation as recommended by
the compensation consulting company based upon each executive's position and
responsibilities. To provide a long-term incentive and link a portion of each
executive's compensation with the interests of shareholders, the Company
generally includes stock options in each executive's compensation package. In
1999, the Committee continued this compensation program without substantial
modification.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Timothy P. O'Neil is President and Chief Executive Officer of the Company,
and also served as President and Chief Executive Officer of UPAC, a subsidiary
of the Company, through October 1998. The Committee made no change in Mr.
O'Neil's base salary in 1999. The Committee decided not to change Mr. O'Neil's
base salary because of the institution of the short-term incentive program and
the opportunities it provides for Mr. O'Neil to earn additional compensation if
certain objectives are met. In order to bring Mr. O'Neil's total compensation
package within total market compensation levels, a short-term incentive program
was provided to Mr. O'Neil which gives him the opportunity to earn additional
cash compensation of 43% of his base compensation, or $69,000, for achieving
budgeted net income levels for UPAC and the Company as a whole. No short-term
incentive was earned in 1999 as the Company did not achieve budgeted net income
levels.
The Committee's determination to recommend an option grant in 1999 to Mr.
O'Neil was based upon its subjective and informal review of a number of factors,
including the number of options held by Mr. O'Neil, the exercise prices of such
options, the amount of Mr. O'Neil's total compensation package, the amounts
which Mr. O'Neil is eligible to earn under the short-term incentive program, the
past performance of Mr. O'Neil and the Committee's desire to provide a long-term
incentive component to Mr. O'Neil's compensation. The decision to grant the
option was not based upon any specific criteria or financial performance
measure.
As described under "Employment Agreements," the Company entered into
employment agreements with Mr. O'Neil and several other executive officers in
1998. The Committee determined that it was in the best interests of the Company
and its stockholders to enter into the agreements in light of the competitive
market for qualified and experienced executives and with respect to the
agreement with Mr. O'Neil, in light of the then ongoing hostile takeover attempt
of the Company. The Committee believes that the employment agreements will help
to ensure the retention of valued executives. The Committee also believes that
it is very important to maintain the management team intact in the event of any
future pending or threatened change of control. In determining the amount of
severance compensation payable to Mr. O'Neil and the triggering events for the
payment of such compensation, the Committee approved provisions which it
considered reasonable to the Company and which would satisfy the goals described
above.
COMPENSATION OF OTHER EXECUTIVE OFFICERS
The Company has two executive officers in addition to Mr. O'Neil. The
Committee approved no increases in base salary for the two executive officers
for 1999 because of the institution of the short-term incentive program and the
opportunities it provides for each executive officer to earn additional
compensation if certain objectives are met. Each of the executive officers has
the opportunity to earn 43% of their base compensation as cash incentive
compensation based on the achievement of budgeted net income levels for each
operating segment or the Company as a whole, and meeting certain other
subjective criteria. Neither of these executive officers earned additional cash
compensation under the short-term incentive program. However, both executive
officers were awarded cash incentive compensation of 7% on a discretionary basis
by the Compensation Committee. The decision to award these bonuses was not
based on any specific financial performance measures.
Both executive officers received stock option grants in 1999. All of the
options were Incentive Stock Options. Each option provides for a term of ten
years, subject to earlier termination upon certain events, and an exercise price
equal to the fair market value of the common stock on the date of grant. The
Committee's determination to recommend the grant of options to each of the
executive officers was based upon its subjective and informal review of a number
of factors including the number of options held by the executive, the exercise
prices of such options, the amount of the executive's total compensation
package, the amounts which the executive is eligible to earn under the short-
term incentive program, the position held by the executive, the duties and
responsibilities of the executive, the past performance of the executive and the
Committee's desire to provide a long-term incentive component to the executive's
compensation. The decision to grant the options was not based upon any specific
criteria or financial performance measure.
As described under "Employment Agreements," the Company entered into
employment agreements with Mr. O'Neil and several other executive officers in
1998. The Committee's determinations with respect to the employment agreements
are described above in the discussion of the compensation of the Chief Executive
Officer.
SECTION 162(M)
The Committee has considered the potential impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended, regarding nondeductibility of annual
compensation in excess of $1,000,000. The Committee does not believe that
Section 162(m) will have any material impact upon the Company, given the current
cash compensation levels of executive officers of the Company, the number of
options granted to such officers and the treatment of such options under Section
162(m). The Committee believes that many of the options currently outstanding
are exempt from the deductibility limit under the transition provisions set
forth in the regulations under Section 162(m). It is the Committee's intention
that options granted under the 1998 Long-Term Incentive Plan will qualify as
performance-based compensation and be exempt from the deductibility limits of
Section 162(m). The Committee will continue to evaluate the advisability of
qualifying executive compensation for deductibility under Section 162(m).
COMPENSATION COMMITTEE
William D. Cox, Chairman
J. Richard Devlin
Clark D. Stewart
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG TRANSFINANCIAL HOLDINGS,
INC. COMMON STOCK, AMEX MARKET AND PEER GROUP
[Line Graph representing data points in table below]
Based on data furnished by Media General Financial Services, Richmond,
Virginia. Assumes $100 invested at the close of business at December 31, 1994 in
Company Common Stock, the Amex Market Index and the selected peer group. The
total return calculated assumes the reinvestment of any dividends. Numbers used
to prepare the above graph were:
<TABLE>
<CAPTION>
Year Ending December 31
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
TransFinancial 100.00 84.34 75.90 86.14 43.37 50.60
Peer Group 100.00 83.38 83.57 126.51 113.04 123.72
Amex Market Index 100.00 128.90 136.01 163.66 161.44 201.27
</TABLE>
The industry peer group ("Peer Group") consists of all predominantly less-
than-truckload motor carriers (or parent companies) publicly traded on any stock
exchange for the last five years (6 companies: Arkansas Best Corporation, Arnold
Industries, Inc., CNF Transportation, Inc., Old Dominion Freight Line, Inc.,
USFreightways, Inc., and Yellow Corporation). Each member of the peer group had
a much larger market capitalization than TransFinancial.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Other Securities All
Annual Restricted Underlying Other
Name and Compen- Stock Options/ LTIP Compen-
Principal sation Award(s) SARs Payouts sation
Position Year Salary Bonus ($)(3) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Timothy P. O'Neil, 1999 $ 160,680 $ -0- -0- -0- 20,000 -0- $ 25,000 (2)
President and Chief 1998 160,680 11,500 -0- -0- 20,000 -0- 25,000 (2)
Executive Officer 1997 160,680 -0- -0- -0- 20,000 -0- 25,000 (2)
David D. Taggart, 1999 $ 143,000 $ 10,333 -0- -0- 10,000 -0- $ 10,000 (1)
Executive Vice President 1998 140,000 10,333 -0- -0- 10,000 -0- 10,000 (1)
of the Company and Chief 1997 123,278 23,266 -0- -0- 10,000 -0- 10,000 (1)
Executive Officer
of Crouse
Kurt W. Huffman, 1999 $ 125,000 $ 9,000 $7,200 -0- 10,000 -0- $ -0-
Executive Vice President 1998 110,908 9,000 -0- -0- 10,000 -0- -0-
of the Company and President
and Chief Executive Officer
of UPAC and Presis
<FN>
(1) Pursuant to Mr. Taggart's employment agreement an interest free loan secured by his personal residence is being forgiven
ratably over eight years.
(2) Represents the annual insurance premiums paid by the Company with respect to a split-dollar life insurance policy for the
benefit of Timothy P. O'Neil. For a description of such arrangement see Employment Agreements.
(3) 1999 and 1998 bonuses represent incentive compensation awarded on a discretionary basis based on subjective criteria.
</TABLE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants Potential Realizable
Number of % of Total Value at Assumed Annual
Securities Options Exer- Rates of Stock Price
Underlying Granted to cise Expir- Appreciation for
Options Employees in Price ation Option Term
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Timothy P. O'Neil(1) 20,000 22% $4.25 2/23/2009 $ 53,456 $ 135,468
David D. Taggart(1) 10,000 11% 4.25 2/23/2009 26,728 67,734
Kurt W. Huffman(1) 10,000 11% 4.25 2/23/2009 26,728 67,734
<FN>
(1) Grants are "Incentive Stock Options" under the Internal Revenue Code. The exercise prices equal the market value on the date of
grant. The options become exercisable ratably on February 23 of the years 2000 through 2004 and remain exercisable through 2009.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value FY-End (#) FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable (1)
<S> <C> <C> <C> <C>
Timothy P. O'Neil -- $ -- 32,820/59,180 $-0-/$20,000
David D. Taggart -- -- 13,000/27,000 -0-/10,000
Kurt W. Huffman -- -- 6,000/24,000 -0-/10,000
(1) With the exception of the 1999 option grants at an exercise price of $4.25 per share, all of the exercisable and unexercisable
options held as of the fiscal yearend were exercisable at prices above the closing market price of $5.25 per share as of December
31, 1999.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is a party to a Supplemental Benefit and Collateral Assignment
Split-Dollar Agreement with Timothy P. O'Neil, President and Chief Executive
Officer of the Company. Under the agreement, the Company has agreed to pay the
premiums on a life insurance policy insuring the life of Mr. O'Neil with an
initial death benefit of $532,968. Mr. O'Neil has the right under the agreement
to designate the beneficiaries to whom the death benefits under the policy shall
be payable. If Mr. O'Neil's employment is terminated by the Company with cause,
Mr. O'Neil's rights under the policy shall terminate. If Mr. O'Neil terminates
his employment, Mr. O'Neil will have no further rights under the policy except
that Mr. O'Neil will receive, for each period of twelve months from the date of
hire, an amount equal to 10% of the excess, if any, of the cash surrender value
of the policy over the aggregate cost of the policy incurred by the Company in
the payment of premiums. Upon the death of Mr. O'Neil, or the earlier surrender
or cancellation of the policy by him subsequent to his retirement, disability or
termination without cause, the Company is entitled to the lesser of the cash
surrender value of the policy and the amount of premiums paid by it, and Mr.
O'Neil is entitled to the remaining amounts payable upon such event under the
policy. Mr. O'Neil has the right to retire under the agreement upon completing
ten years of employment and reaching age 50.
The Company is party to an Employment Agreement with Timothy P. O'Neil,
President and Chief Executive Officer of the Company. The Employment agreement
provides for the employment at will of Mr. O'Neil by the Company. Under the
Employment Agreement, Mr. O'Neil is entitled to (a) salary of $160,680 per year,
subject to increase by the Company from time to time, (b) annual incentive
compensation of 36% of base salary, or $57,500, based on achieving budgeted net
income levels for the Company and an additional 7% of base salary, or $11,500,
based on subjective criteria, (c) such stock options as the Company shall from
time to time grant pursuant to stock option plans, (d) certain additional fringe
and other benefits, including a Supplemental Benefit and Collateral Assignment
Split-Dollar Agreement as described above. The Employment Agreement provides
that if Mr. O'Neil's employment is terminated by the Company without good cause
(as defined in the agreement), he will be entitled to his then existing base
compensation and all related benefits for two years. The Employment Agreement
also includes a non-competition provision for two years after termination.
Under the Employment Agreement, Mr. O'Neil is entitled to certain payments upon
termination of Mr. O'Neil's employment after a change of control of the Company.
Mr. O'Neil is entitled to such payments if, within two years after such a change
of control, Mr. O'Neil's employment is terminated other than by Mr. O'Neil for
any reason other than death, permanent disability, retirement or Good Cause (as
defined in the agreement), or is terminated by Mr. O'Neil for Stated Cause (as
defined in the agreement). In such event, Mr. O'Neil is entitled to the
following: (i) 2.99 times Mr. O'Neil's average annual compensation over the
three most recent years prior to the change of control, or such lesser period as
Mr. O'Neil shall have been employed by the Company, excluding any amount which
would constitute an "excess parachute payment" under Section 280G of the Code,
(ii) immediate 100% vesting of all incentive compensation provided or to be
provided under the Employment Agreement, (iii) all benefits to which he would
have been entitled upon normal retirement under the Supplemental Benefit and
Collateral Assignment Split-Dollar Agreement described above and (iv) three
years participation in certain medical and life insurance plans of the Company.
The Company is a party to a Supplemental Benefit Agreement with David D.
Taggart, an Executive Vice President of the Company and Chairman and Chief
Executive Officer of Crouse Cartage Company ("Crouse"). The agreement provides
salary continuation benefits in the event of death before age 65, supplemental
retirement benefits and pre-retirement death benefits. Under the agreement, if
Mr. Taggart remains a full-time officer of Crouse until age 65, the Company is
required to pay him (or his beneficiary in the event of death) $21,000 per year
for 15 years after his retirement. Mr. Taggart's entitlement to such
supplemental retirement benefit vests 10% per year of service and immediately
upon disability or a change of control of the Company or Crouse. The agreement
provides for partial payments of supplemental retirement benefits upon early
retirement or retirement at age 65 prior to full vesting of the retirement
benefits. The agreement provides that if Mr. Taggart's employment with Crouse
is terminated before his 65th birthday due to death, Mr. Taggart's beneficiary
shall receive $35,000 per year for 20 years. If Mr. Taggart dies before
retirement, the Company is also required to pay to his beneficiaries the sum of
$175,000 under the agreement.
The Company and Crouse Cartage Company are parties to an Employment
Agreement with David D. Taggart, an Executive Vice President of the Company and
Chairman and Chief Executive Officer of Crouse. The Employment Agreement
provides for the employment at will of Mr. Taggart by TransFinancial. Under the
Employment Agreement, Mr. Taggart is entitled to (a) salary of $143,000 per
year, subject to increase by Crouse from time to time, (b) annual incentive
compensation of 36% of base salary, or $51,667, based on achieving budgeted net
income levels for Crouse or the Company, and an additional 7% of base salary, or
$10,333, based on subjective criteria, (c) an interest free home loan from the
Company to be forgiven in equal annual installments, (d) such stock options as
the Company shall from time to time grant pursuant to stock option plans, and
(e) certain additional fringe and other benefits, including supplemental
retirement benefits as described above. The Employment Agreement provides that
if Mr. Taggart's employment is terminated by the Company without cause (as
defined in the agreement) he will be entitled to an amount equal to his then
existing base compensation and all related benefits for two years. The
Employment Agreement also includes a non-competition provision for two years
after termination. Under a separate agreement between the parties, Mr. Taggart
is entitled to certain payments upon termination of Mr. Taggart's employment
after a change of control of the Company or Crouse. Mr. Taggart is entitled to
such payments if, within two years after such a change of control, Mr. Taggart's
employment is terminated other than by Mr. Taggart for any reason other than
death, permanent disability, retirement or Good Cause (as defined in the
agreement), or is terminated by Mr. Taggart for Stated Cause (as defined in the
agreement). In such event, Mr. Taggart is entitled to the following: (i) 2.99
times Mr. Taggart's average annual compensation over the three most recent years
prior to the change of control, or such lesser period as Mr. Taggart shall have
been employed, excluding any amount which would constitute an "excess parachute
payment" under Section 280G of the Code, (ii) immediate 100% vesting of all
incentive compensation provided or to be provided under the Employment
Agreement, (iii) all benefits to which he would have been entitled upon normal
retirement under the Supplemental Benefit Agreement described above and (iv)
three years participation in certain medical and life insurance plans of the
Company and Crouse.
The Company and Presis are parties to an Employment Agreement with Kurt W.
Huffman, Executive Vice President of the Company, President and Chief Executive
Officer of Presis and President and Chief Executive Officer of UPAC. The
Employment agreement provides for the employment at will of Mr. Huffman by the
Company. Under the Employment Agreement, Mr. Huffman is entitled to (a) salary
of $125,000 per year, subject to increase by the Company from time to time, (b)
annual incentive compensation of 36% of base salary, or $45,000, based on
achieving budgeted net income levels for the Company and an additional 7% of
base salary, or $9,000, based on subjective criteria, (c) such stock options as
the Company shall from time to time grant pursuant to stock option plans, (d)
certain additional fringe and other benefits. The Employment Agreement provides
that if Mr. Huffman's employment is terminated by the Company without good cause
(as defined in the agreement), he will be entitled to his then existing base
compensation and all related benefits for one year. The Employment Agreement
also includes a non-compensation provision for one year after termination.
Under the Employment Agreement, Mr. Huffman is entitled to certain payments upon
termination of Mr. Huffman's employment after a change of control of the
Company. Mr. Huffman is entitled to such payments if, within one year after
such a change of control, Mr. Huffman's employment is terminated other than by
Mr. Huffman for any reason other than death, permanent disability, retirement or
Good Cause (as defined in the agreement), or is terminated by Mr. Huffman for
Stated Cause (as defined in the agreement). In such event, Mr. Huffman is
entitled to the following: (i) 2.99 times Mr. Huffman's average annual
compensation over the three most recent years prior to the change of control, or
such lesser period as Mr. Huffman shall have been employed by the Company,
excluding any amount which would constitute an "excess parachute payment" under
Section 280G of the Code, (ii) immediate 100% vesting of all incentive
compensation provided or to be provided under the Employment Agreement, and
(iii) three years participation in certain medical and life insurance plans of
the Company.
SHAREHOLDER PROPOSALS
Any proposal that a Shareholder desires to have included in the Company's
proxy materials for the 2001 Annual Meeting of Shareholders of the Company must
be received by the Corporate Secretary of the Company at the Company's principal
executive offices no later than March 2, 2001, in order to be considered for
possible inclusion in the proxy materials. Any such proposal must comply with
the applicable rules of the Securities and Exchange Commission.
In addition to the requirements set forth above, the Company's By-laws
contain advance notice provisions governing certain matters, including
shareholder proposals and shareholder nominations of candidates for election to
the Board of Directors of the Company. Under the Company's By-laws, notice of
any such proposal or nomination must be in writing and must be delivered to the
Corporate Secretary at the Company's principal executive offices by the later
of: (a) sixty (60) days prior to the scheduled date of the shareholders'
meeting, or (b) ten (10) days following the day on which the Company mails
notice or makes a public announcement of the scheduled date of the meeting. Any
such shareholder proposal or nomination for election to the Board of Directors
must also comply with the other applicable provisions of the advance notice
provisions in the Company's By-laws.
The Company currently anticipates that the 2001 Annual Meeting of
Shareholders will be held on May 24, 2001. Assuming that the date of the
meeting is not changed, notice of any shareholder proposal or nomination to be
considered at the 2001 Annual Meeting of Shareholders must be received by the
Corporate Secretary no later than March 26, 2001 in order to be timely under the
advance notice provisions of the Company's By-laws.
No shareholder proposal or nomination will be considered at the 2001 Annual
Meeting of Shareholders unless it is presented in accordance with the foregoing
requirements. A copy of the Company's By-laws containing the advance notice
provisions can be obtained by any Shareholder by written request to the
Corporate Secretary of the Company at the Company's principal executive offices.
MISCELLANEOUS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matter to be presented for consideration at the Annual Meeting. Although
the Company knows of no items of business which will be presented at the Annual
Meeting other than those described herein, proxies in the accompanying form
confer upon the persons named in such proxies discretionary authority to vote
upon any other matters that may properly come before the meeting, to the extent
permitted under the applicable rules of the Securities and Exchange Commission.
All expenses incurred in connection with this proxy solicitation will be
borne by the Company. In addition to solicitation of proxies by mail, proxies
may be solicited by the Company's directors, officers and other employees, by
personal interview, telephone and telegram. The Company will also request
brokers and other fiduciaries to forward solicitation materials to the
beneficial owners of shares held of record by them, and will pay all expenses in
connection therewith.
DATE: June 16, 2000
Timothy P. O'Neil
President, Chief Executive Officer
and Corporate Secretary
TRANSFINANCIAL HOLDINGS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
July 25, 2000
The undersigned hereby appoints Timothy P. O'Neil and Kurt W. Huffman, and
each of them, as proxies for the undersigned at the Annual Meeting of
Shareholders of TransFinancial Holdings, Inc. at the Holiday Inn, 12601 West
95th Street, Lenexa, Kansas, on Tuesday, July 25, 2000, at 9:00 A.M., and at any
adjournment, to vote the shares of stock the undersigned would be entitled to
vote, if personally present, upon the proposals, and any other matter brought
before the meeting, all as set forth in the June 16, 2000, Proxy Statement.
The Board of Directors recommends voting for Proposal 1.
1.Authority granted to or withheld from proxies to vote for William D. Cox,
Harold C. Hill, Jr., Roy R. Laborde, Timothy P. O'Neil, and Clark D. Stewart
as directors of TransFinancial (or a substitute nominee or nominees
designated by the Board of Directors if any of them become unavailable).
[ ] FOR all nominees (unless exceptions are marked). [ ] WITHHOLD
AUTHORITY (for all nominees).
(To withhold authority to vote for individual nominees write such nominees
names in the space
provided below).
2.THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO VOTE UPON CERTAIN MATTERS, AS
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
(continued and to be signed and dated on the reverse side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR PROPOSAL
1.
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
Dated:
(Signature)
(Signature if held jointly)
PLEASE MARK, SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
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