SCHEDULE 14A
(REGULATION 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 [ ]
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)).
TRANSIT GROUP, INC.
(Name of Registrant as Specified in its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
TRANSIT GROUP, INC.
2859 PACES FERRY ROAD, SUITE 1740
ATLANTA, GA 30339
(770) 444-0240
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders of Transit Group, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders,
("Meeting"), of Transit Group, Inc., ("TGI"), will be held at the Ritz Carlton
Hotel, 3434 Peachtree Road N.E., Atlanta, Georgia 30326, on Thursday, May 13,
1999, at 12:00 P.M. Eastern Daylight Time, for the following purposes:
1. To elect six directors of TGI to serve for the ensuing year and until
their successors are duly elected and qualified (Proposal 1);
2. To approve restated and amended articles of incorporation for TGI to
increase the authorized common shares (Proposal 2);
3. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of TGI for the fiscal year ending December 31, 1999
(Proposal 3);
4. To ratify certain past actions by the board of directors and the
officers of TGI (Proposal 4); and
5. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only holders of the Common Stock of record at the close of business on March
26, 1999 ("Record Date"), will be entitled to notice of and to vote at the
Meeting or any adjournment thereof.
By Order of the Board of Directors,
Philip A. Belyew
Chief Executive Officer
April , 1999
Atlanta, Georgia
Regardless of whether you plan to attend the meeting, you are urged
to complete, sign and return the enclosed Proxy in the
envelope provided, which requires no postage if
mailed in the United States.
<PAGE>
TRANSIT GROUP, INC.
2859 PACES FERRY ROAD, SUITE 1740
ATLANTA, GA 30339
(770) 444-0240
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 1999
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Transit Group, Inc. ("TGI" or the "Company") of
proxies for use at the Annual Meeting of TGI Shareholders (the "Meeting"). The
Meeting will be held at the Ritz Carlton Hotel, 3434 Peachtree Road N.E.,
Atlanta, Georgia 30326, on Thursday May 13, 1999, at 12:00 P.M. Eastern
Daylight Time, and any adjournment or adjournments thereof. The Meeting is
convened for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Shareholders. This Proxy Statement and accompanying form of
proxy and TGI's 1998 Annual Report are expected to be distributed to
shareholders on or about April __, 1999.
Solicitation of Proxies
This proxy solicitation will be conducted principally by mail, but may
also be by telephone or in person, the cost of which will be paid by TGI.
Banks, brokers, nominees and other custodians and fiduciaries will be requested
to forward proxy solicitation material to their principals and customers where
appropriate, and TGI will reimburse such banks, brokers, nominees, custodians
and fiduciaries for their reasonable out-of-pocket expenses in sending the
proxy material to beneficial owners of the shares.
Actions to be Taken Under the Proxy
Unless instructed otherwise in the space provided in the proxy card,
all properly executed proxies received by TGI will be voted as follows:
(Proposal 1)
"FOR" the election of the nominees for director set forth below under the
heading "Election of Directors".
(Proposal 2)
"FOR" the approval of amended and restated articles of incorporation to
increase authorized common shares.
(Proposal 3)
"FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for 1999.
(Proposal 4)
"FOR" the ratification of the certain past actions taken by the board of
directors and officers from the date of the last shareholders' meeting through
the date of the Meeting.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by giving written notice of revocation or a duly executed proxy
bearing a later date to TGI's Secretary. In order to be effective, such notice
or later dated proxy must be received by TGI prior to the exercise of the
earlier proxy. A shareholder may also attend the Meeting, revoke his/her proxy,
and vote in person.
The Company's management knows of no matter to be brought before the
Meeting other than those mentioned herein. If, however, any other matters
properly come before the Meeting, it is intended that the proxies will be voted
in accordance with the judgment of the person or persons voting such proxies.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Rights
The only class of securities entitled to vote at the Meeting is TGI's
Common Stock, $.0l par value. The close of business of March 26, 1999, has been
fixed as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting or at any adjournment or adjournments
thereof. At March 26, 1999, there were 26,046,682 shares of Common Stock
outstanding and entitled to be voted at the Meeting. Each share of Common Stock
is entitled to one vote at the Meeting. A majority of the outstanding shares of
Common Stock represented at the Meeting, in person or by proxy, will constitute
a quorum.
Security Ownership of Certain Beneficial Owners
The following table set forth certain information regarding the TGI
Common Stock owned as of March 26, 1999 (i) by each person who beneficially
owned more 5% of the shares of TGI Common Stock; (ii) by each TGI director,
(iii) by the Named Executive Officer of TGI (as defined herein); and (iv) by
all TGI directors and executive officers as a group.
<TABLE>
<CAPTION>
Percentage
Name and Address Amount and Nature of Beneficial of Common Stock
of Beneficial Owner Ownership of Common Stock (1) Owned
------------------- ----------------------------- -----
<S> <C> <C>
ECD Trust UA 7.30.80 7,003,465 (2) 21.2%
1910 San Marco Blvd.
Jacksonville, FL 32207
T. Wayne Davis 3,628,389 (3) 12.2%
1910 San Marco Blvd.
Jacksonville, FL 32207
Carroll L. Fulmer 1,023,608 (4) 3.8%
8340 American Way
Groveland, FL 34736
Philip A. Belyew 995,239 (5) 3.7%
Suite 1740
2859 Paces Ferry Road
Atlanta, GA 30339
Wayne N. Nellums 318,577 (6) 1.2%
Suite 1740
2859 Paces Ferry Road
Atlanta, GA 30339
N. Mark DiLuzio 109,733 (7) *
Suite 1740
2859 Paces Ferry Road
Atlanta, GA 30339
Derek E. Dewan 83,334 (8) *
6440 Atlantic Boulevard
Jacksonville, FL 32211
Ford G. Pearson 83,334 (9) *
666 Garland Place
Des Plaines, IL 60016
Scott J. Tsanos 55,155 (10) *
Suite 1740
2859 Paces Ferry Road
Atlanta, GA 30339
Robert R.Hermann, Jr. 83,334 (11) *
Hermann Companies
7701 Forsyth Boulevard
Tenth Floor
St. Louis, Missouri 63105
All executive officers and directors 4,446,059 (12) 14.6%
As a group (10 persons)
</TABLE>
- ---------------------------------------
* Represents less than 1%.
(1) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 and includes, in certain
instances, shares held in the name of an individual's spouse or minor
children, the reporting of which is required by applicable rules of
the Securities and Exchange Commission, but as to which shares the
executive officer or director may have disclaimed beneficial
ownership. Unless otherwise noted, all shares are owned of record by
the persons named and the beneficial ownership consists of sole voting
power and sole investment power.
(2) Includes 6,033,601 shares of Common Stock owned directly, 876,000 held
by General Parcel Corporation, and 93,864 shares of Common Stock
issuable upon the exercise of certain warrants. Eunice C. Davis,
lifetime beneficiary of the ECD Trust, is the mother of T. Wayne
Davis, Chairman of the Board.
(3) Includes 1,566,414 shares of Common Stock owned directly; 1,276,396
shares owned by the TWD Trust for ECD, of which Mr. Davis is Trustee;
186,602 shares owned by the TWD Trust for DDL, of which Mr. Davis is
Trustee; 171,497 shares owned by the TWD Trust for TDD, of which Mr.
Davis is Trustee; 20,438 shares owned by the TWD Trust for TWD, Jr.,
of which Mr. Davis is Trustee; 11,500 shares owned by Redwing
Properties, Inc. of which Mr. Davis is President; 3,497 shares owned
by Redwing Investments, Inc., of which Mr. Davis is President; 4,912
shares owned by Mr. Davis' wife, Mary O. Davis; an aggregate of 50,688
shares of Common Stock held by W. Davis' children, C. Rebecca Davis,
Elizabeth Davis and Katherine C. Davis; and 336,445 shares of Common
Stock issuable upon the exercise of certain warrants.
(4) Consists of 1,023,608 shares of Common Stock owned by Barbara Fulmer,
Mr.Fulmer's wife. (5) Includes 228,571 shares of Common Stock owned
directly and the vested portion of 800,000 shares of Common Stock
issuable upon the exercise of stock options granted to Mr. Belyew.
(6) Includes 2,577 shares of Common Stock owned directly and the vested
portion of 324,000 shares of Common Stock issuable upon the exercise
of stock options granted to Mr. Nellums.
(7) Includes 9,732 shares of Common Stock owned directly and the vested
portion of 150,000 shares of Common Stock issuable upon the exercise
of stock options granted to Mr. DiLuzio.
(8) Represents the vested portion of 100,000 shares of Common Stock
issuable upon the exercise of stock options granted to Mr. Dewan.
(9) Represents the vested portion of 100,000 shares of Common Stoc
issuable upon the exercise of stock options granted to Mr. Pearson.
(10) Includes 5,155 shares of Common Stock owned directly and the vested
portion of 75,000 shares of Common Stock issuable upon the exercise of
stock options granted to Mr. Tsanos.
(11) Represents the vested portion of 100,000 shares of Common Stock
issuable upon the exercise of stock options granted to Mr. Hermann.
(12) Includes a total of 1,566,414 shares and 336,445 warrants and options
owned by T. Wayne Davis; 1,023,608 shares owned by Carroll Fulmer,
228,571 shares and 766,668 options owned by Philip A. Belyew, 2,577
shares and 316,000 options owned by Wayne N. Nellums, 9,732 shares and
100,001 options owned by N. Mark Diluzio 83,334 options owned by Derek
E. Dewan, 83,334 options owned by Ford G. Pearson, 5,155 shares and
50,000 options owned by Scott J. Tsanos, and 33,334 options owned by
Robert R. Hermann.
<PAGE>
RECENT DEVELOPMENTS -
PROPOSED ISSUANCE OF CONVERTIBLE PREFERRED STOCK
Negotiations with GE Capital
During the past two months, TGI management has been in discussions
with General Electric Capital Corp. ("GE Capital"), a wholly owned subsidiary
of General Electric Co., concerning a proposed equity financing transaction.
TGI currently anticipates that if these negotiations are successfully
completed, the Board of Directors will designate 5,000,000 shares of
convertible preferred stock with terms substantially as described below (the
"Convertible Preferred Stock") and issue the stock to GE Capital or one of its
affiliates (the "Investor"). In exchange, TGI would receive $25 million in
cash.
The proceeds from the sale of the Convertible Preferred Stock would be
used to fund future acquisitions and for general corporate purposes, including
repayment of revolving credit indebtedness. TGI's strategy is to build a
national trucking company by acquiring truckload carriers that meet certain
criteria, and TGI has acquired 14 carriers since July 1997. TGI intends to
continue this program of acquisitions, and management believes that the sale of
the Convertible Preferred Stock would assist TGI in executing this strategy.
Although TGI continually evaluates potential acquisitions of such businesses
and anticipates continuing to make such evaluations and acquisitions, as of the
date of this Proxy Statement TGI had no agreements with respect to the
acquisition of another business.
Shareholders should note that TGI and GE Capital are still in
preliminary negotiations concerning the proposed sale of the Convertible
Preferred Stock and that there are no binding agreements with respect to this
subject matter other than certain provisions relating to confidentiality,
indemnification and procedural matters contained in a letter agreement dated
February 18, 1999. GE Capital is under no obligation to proceed with the
transaction, and there can be no assurance that GE Capital or any of its
affiliates will purchase any shares of Convertible Preferred Stock or other
securities, whether on the terms described below or otherwise.
TGI's articles of incorporation currently authorize the issuance of up
to 5,000,000 shares of preferred stock, which will be increased to 20,000,000
shares in connection with the proposed amendment to the Company's Articles of
Incorporation, and authorize the Board to fix the preferences, limitations and
relative rights of one or more classes and series of preferred stock and to
authorize the issuance of such stock without shareholder approval. The proposed
sale of the Convertible Preferred Stock, if it proceeds, would not require the
approval of the holders of TGI's Common Stock, other than the approval of the
amendment to the company's articles of incorporation.
Description of Proposed Convertible Preferred Stock
Dividends
The Investor would be entitled to receive, when declared by the Board
of Directors out of funds legally available for the purpose, dividends payable
in cash at an annual rate of 9% of the stated value of $5.00 per share of
Convertible Preferred Stock. Dividends on the Convertible Preferred Stock would
be cumulative and would accrue from the date of issuance of the stock, and
would be payable quarterly in arrears. The proposed terms of the Convertible
Preferred Stock also provide for certain tax indemnification and gross-up
provisions for the Investors.
Conversion
At the Investor's option, outstanding Convertible Preferred Stock
could be converted at any time into TGI Common Stock at the initial conversion
ratio of 1:1. The conversion ratio would be adjusted to provide antidilution
protection, including adjustments for extraordinary dividends,
recapitalizations, issuances of Common Stock at prices below either the
conversion price or the prevailing market price or subdivisions, combinations
or reclassifications of TGI Common Stock. However, there would be no adjustment
for Common Stock issuable upon the exercise of currently outstanding
convertible securities or employee stock options approved by the Board of
Directors, subject to certain limitations.
The Investor would have the right to require TGI to register with the
SEC the resale of TGI Common Stock issued upon conversion of the Convertible
Preferred Stock and to include such shares in other registrations carried out
by TGI. These registrations would be at TGI's expense, except that underwriting
commissions would be borne by the Investor.
Redemption
At the Investor's option, TGI would be required to redeem up to
one-third of the Convertible Preferred Stock on the third anniversary of the
sale of the stock, up to two-thirds on the fourth anniversary, and all of the
stock on the fifth anniverasary. The amount payable on each of these dates
would be the stock's stated value of $5.00, plus any accrued and unpaid
dividends.
Voting Rights
The Investor would have the right to vote with TGI's common
shareholders on all matters submitted to a vote of shareholders, on an as-if
converted basis. The affirmative vote of two-thirds of the outstanding shares
of Convertible Preferred Stock would be required to approve the issuance of
securities senior to or on parity with the Convertible Preferred Stock (or
securities convertible into senior or parity securities) or certain amendments
of TGI's articles of incorporation.
Also, each holder of Convertible Preferred Stock would have to approve
any modification of the terms of the Convertible Preferred Stock that would (a)
change the redemption dates; (b) reduce its stated value, liquidation
preference or dividend rate; (c) change the place or currency of payment of
stated value or liquidation preference of, or dividend on, the Convertible
Preferred Stock; (d) impair the Investor's right to sue for the enforcement of
any payment required on any shares of Convertible Preferred Stock; (e)
adversely affect the Convertible Preferred Stock's conversion rights; or (f)
reduce the percentage of outstanding Convertible Preferred Stock necessary to
amend its terms or to grant waivers.
Liquidation Preference
If TGI were sold or liquidated or if its business were wound up for
any reason, the Investor would receive the $5.00 stated value of each
outstanding share of Convertible Preferred Stock, plus accrued but unpaid
dividends, before any payments could be made to any other TGI shareholders.
Thereafter, holders of Convertible Preferred Stock would participate in any
distributions to TGI shareholders on an as-if converted basis.
Covenants and Remedies
The terms of the Convertible Preferred Stock would include covenants
that TGI would have to comply with, including (a) restrictions on additional
indebtedness and liens, (b) restrictions on Common Stock dividends, (c)
information requirements, (d) prohibitions on the issuance of senior or parity
securities, (e) restrictions on acquisitions of assets above a certain amount,
(f) restrictions on sales of assets, (g) restrictions on acquisitions, mergers
and changes of control, (h) prohibitions on entering non-core lines of
business, (i) maintenance of key man insurance, and (j) Year 2000 compliance.
The terms of the Convertible Preferred Stock would provide for
remedies upon the occurrence of certain events, including (a) the continuing
breach of any covenants or representations and warranties, (b) the non-payment
of any quarterly dividend, (c) the failure to make mandatory redemptions, and
(d) the bankruptcy of TGI or any of its subsidiaries. The remedies would
include giving the Investor the right to elect two additional directors to
TGI's Board of Directors.
Board Observation Rights
The Investor would have the right to notice of and attendance at all
TGI Board meetings and to receive all information provided to Board members.
Conditions of Purchase and Sale
The purchase and sale of the Convertible Preferred Stock would be
subject to certain conditions, including (a) the satisfactory completion of all
business, financial, environmental and legal due diligence, (b) receipt of any
required governmental or regulatory approvals, (c) receipt of legal opinions
from TGI's counsel, (d) receipt of any required consents from shareholders or
third parties, and (e) the absence of any material adverse events.
<PAGE>
Expenses and Indemnities
TGI has agreed to pay all reasonable due diligence expenses and
outside legal and consulting fees in connection with the transaction or the
enforcement of the Investor's related rights, whether or not the transaction is
completed. TGI paid an underwriting deposit of $50,000 to GE Capital in
connection with the execution of the letter of interest in February 1999. If
the sale of the Convertible Preferred Stock is completed, this amount will be
applied toward expenses or other payments owed to the Investor, with any
balance remitted to TGI. TGI has agreed to indemnify the Investor against all
losses resulting from the transaction, other than losses arising out of the
Investor's gross negligence or willful misconduct.
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
Nominees
A Board consisting of six directors is to be elected at the Meeting. Each of
the nominees is currently a member of the Board. Unless otherwise instructed,
the proxy holders will vote the proxies received by them for TGI's nominees
named below. In the event that any nominee of TGI is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of Directors
to fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner as will assure the election of as
many of the nominees listed below as possible, and in such event the specific
nominees to be voted for will be determined by the proxy holders. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Shareholders or until a successor has been duly elected and
qualified.
The nominees, and certain information about them, are set forth below:
Nominee Current Position with TGI
T. Wayne Davis Chairman of the Board
Philip A. Belyew Chief Executive Officer and Director
Derek E. Dewan Director
Carroll L. Fulmer Director
Robert R. Hermann, Jr. Director
Ford G. Pearson Director
T. Wayne Davis, age 51, has been a director of TGI since February 1988
and Chairman of the Board of Directors of TGI since February 1989. He has
served as a director of Winn-Dixie Stores, Inc., a grocery store operator,
since October 1982 and served that company as a Vice President from December
1971 to June 1987. Since July 1987, Mr. Davis has been a self-employed
investor. In 1974, Mr. Davis founded Abacus Services, Inc., a temporary
staffing service, and served as Chairman and Chief Executive Officer. He also
has served on the Board of Directors of Enstar Group, Inc. and Modis
Professional Services, Inc.
Philip A. Belyew, age 51, has been the President, Chief Executive
Officer and Director of TGI since January 6, 1997. Until November 1996, Mr.
Belyew was Chairman, President and Chief Executive Officer of Atlanta-based
United TransNet Inc., which was formed in December 1995 with the merger of
Courier Dispatch Group and five other ground and air courier companies, which
was acquired by Corporate Express in November 1996. From March 1994 to December
1995, Mr. Belyew served as President and Chief Executive Officer of Courier
Dispatch Group and from December 1991 to March 1994, Mr. Belyew served as Chief
Operating Officer of the same company.
Derek E. Dewan, age 44, has been a member of the Board of Directors of TGI
since January 1997. Mr. Dewan is Chairman, President and Chief Executive
Officer of Modis Professional Services, Inc., a national provider of strategic
staffing, consulting and outsourcing services to businesses, professional and
service organizations, and governmental agencies. Prior to joining Modis in
1994, Mr. Dewan was managing partner for the accounting firm of Coopers &
Lybrand LLP in Jacksonville, Florida. Mr. Dewan also serves on the Boards of
the National Association of Temporary Staffing Services (NATSS) and Payroll
Transfers, Inc.
Carroll L. Fulmer, age 65, has been a member of the Board of Directors of
TGI since September 1997. Mr. Fulmer is Senior Vice President of Transit Group
Transportation LLC (a wholly-owned subsidiary of TGI). Mr. Fulmer founded
Carroll Fulmer Group and affiliates during the early 1960's.
Robert R. Hermann, Jr., age 45, has been a member of the Board of
Directors of TGI since September 3, 1998. Mr. Hermann is President of Hermann
Companies, Inc., a packaging system company with domestic and international
operations based in St. Louis, Missouri. Mr. Hermann is also Chairman of the
Board of Directors and Chief Executive Officer of Hermann Marketing, Inc., a
marketing firm based in St. Louis, Missouri and serves on the board of
directors of First National Bank of St. Louis.
<PAGE>
Ford G. Pearson, age 56, has been a member of the Board of Directors
of TGI since October 1997. Mr. Pearson, has served since 1986 as Executive Vice
President, Chief Operating Officer and Chief Financial Officer of Wheels, Inc.,
an Illinois-based fleet leasing and management company. Prior to his
involvement with Wheels, Inc., Mr. Pearson held several positions with
Continental Bank in Chicago, Illinois and was most recently in charge of
Continental Bank's Commercial Finance Department.
The election of Directors requires an affirmative vote by the holders
of a majority of the votes cast. Any shares not voted (whether by abstention,
broker non-vote or otherwise) have the effect of a negative vote.
The Board of Directors recommends that you vote FOR the election of
the nominees named above.
Board Meetings and Committees
The Board of Directors of TGI held five meetings during the fiscal
year ended December 31, 1998. Mr.Davis, Mr. Belyew, Mr. Pearson, Mr. Fulmer,
and Mr. Hermann attended all Board meetings for the portion of the year they
were Board members. Mr. Dewan attended three meetings during 1998.
The Board has a standing Executive, Audit, and Compensation Committee.
Messrs. Belyew and Davis currently serve on the Executive Committee. The
purpose of the Executive Committee is to exercise certain powers delegated by
the Board of Directors between regular Board Meetings. All actions of the
Committee are subject to review and ratification by the full Board of
Directors.
Messrs. Dewan and Pearson currently serve on the Audit Committee of
the Board of Directors. The purpose of the Audit committee is to review
financial statements and the internal financial reporting system and controls
of the Company with TGI's management and independent accountants, recommend
resolutions for any dispute between TGI's management and its auditors and
review other matters relating to the relationship of TGI with its auditors.
Messrs. Davis, Dewan, Hermann and Pearson currently serve on the
Compensation Committee. The purpose of the Compensation Committee is to review
and approve the salaries of TGI's officers and certain highly compensated
employees for each fiscal year. The compensation of the President and Chief
Executive Officer of TGI remains subject to approval by the full Board. Mr.
Davis is an Executive Officer of the Company.
Messrs. Pearson and Dewan currently serve on the Nominating Committee.
The purpose of the Nominating Committee is to review suggestions made by other
Directors for new Board members and propose to nominate two additional
individuals to serve on the Board.
The Compensation Committee, the Audit Committee, and the Executive
Committee each held two meetings, and Nominating Committee held 1 meeting
during the fiscal year ended December 31, 1998.
Director Compensation
All members of the Board of Directors of TGI who are employees of TGI
receive no additional compensation for serving on the Board or any committees
thereof in excess of their regular salaries. Members of the Board of Directors
who are not employees of TGI receive a fee of $2,000 for each board meeting
attended.
ADOPTION OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
(Proposal 2)
The Board of Directors proposes that the shareholders approve an
amendment and restatement of TGI's articles of incorporation that would
increase the number of authorized shares of Common Stock from 30,000,000 shares
to 100,000,000 shares and increase the number of authorized preferred shares
from 5,000,000 shares to 20,000,000 shares. As amended and restated, Article
III(a) of TGI's articles would provide as follows:
This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares which the Corporation is authorized to issue is
120,000,000 shares, of which 100,000,000 shares are Common Stock, $.01
par value per share, and 20,000,000 shares are Preferred Stock, no par
value per share. The rights and preferences of all outstanding shares
of Common Stock shall be identical. The holders of outstanding shares
of Common Stock shall have the right to vote on all matters submitted
to a vote of the stockholders of the Corporation, on the basis of one
vote per share of Common Stock owned.
<PAGE>
The full text of the proposed amended and restated articles of incorporation of
TGI is attached to this Proxy Statement as Appendix B.
TGI would also have authorized for issuance 20,000,000 shares of
preferred stock, and the Board would continue to have the authority to fix the
preferences, limitations and relative rights of one or more classes and series
of preferred stock and to authorize the issuance of such stock without
shareholder approval. (As described elsewhere in this Proxy Statement, subject
to completion of negotiations, TGI may designate and issue to GE Capital Corp.
or one of its affiliates up to 5,000,000 shares of convertible preferred stock.
This potential transaction is not subject to shareholder approval. See "Recent
Developments-Proposed Issuance of Convertible Preferred Stock.")
On March 26, 1999, TGI had 26,046,682 shares of Common Stock
outstanding. On that date, an additional 3,890,000 shares of Common Stock
were reserved for issuance pursuant to TGI's stock option plans, stock option
agreements and warrants.
TGI's strategy is to build a national trucking company by acquiring
truckload carriers that meet certain criteria. The issuance of shares of TGI's
Common Stock is one of the primary means by which it funds these acquisitions,
along with the cash payments and debt assumptions. Since July 1997, TGI has
acquired 14 carriers and, in connection with these acquisitions, issued more
than 13 million shares of Common Stock. TGI intends to continue its program of
carrier acquisitions and to fund future acquisitions in part with shares of
Common Stock. To do so, however, TGI's authorized shares of Common Stock must
be increased.
The additional authorized shares of Common Stock and Preferred Stock
would also give TGI flexibility in its corporate planning and in responding to
future business developments, including possible financings and acquisition
transactions other than those described above, stock splits or dividends,
issuances under stock-based incentive plans and other general corporate
purposes. The directors of TGI have authorized the issuance of Common Stock for
some of these purposes in the past; however TGI has no present plans to issue
additional shares of Common Stock except as noted above. TGI believes that
increasing its authorized common shares to 100,000,000 shares will provide TGI
with sufficient shares available for issuance for at least the next three
years.
Under some circumstances, issuance of additional shares of Common
Stock and Preferred Stock could dilute the voting rights, equity and earnings
per share of existing shareholders. This increase in authorized but unissued
Common Stock and Preferred Stock also could be considered an anti-takeover
measure because the additional authorized but unissued shares of Common Stock
could be used by the Board to make a change in control of TGI more difficult.
The Board's purpose in recommending this proposal is not as an anti-takeover
measure, but for the reasons discussed above.
Authorized shares of Common Stock may be issued by the Board of
Directors from time to time without further shareholder approval, except in
situations where shareholder approval is required by Florida law or the rules
of The Nasdaq Stock Market. Shareholders of TGI have no preemptive rights to
acquire additional shares of Common Stock.
Restatement of TGI's articles of incorporation will also permit TGI to
eliminate from the articles lengthy descriptions of the preferences,
limitations and relative rights of several series of preferred stock issued in
the past, none of which shares are currently outstanding.
The proposed amendment to the articles will be approved if a quorum is
present at the meeting and 51% of the outstanding shares of Common Stock
affirmatively vote to approve the amendment. TGI anticipates that T. Wayne
Davis and his affiliates, who at the record date for the meeting beneficially
owned 33.4% of the shares of Common Stock then outstanding, will vote their
shares in favor of this proposal, which together with other members of
management will assure its approval. Proxies which have been marked as
abstentions or which have been designated by brokers as not voted will have the
effect of a negative vote.
The Board of Directors believes that the proposed increase in the
number of authorized shares is necessary for TGI to continue to carry out its
business strategy. Accordingly, the Board recommends a vote "for" approval of
the proposal to amend and restate TGI's articles of incorporation.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal 3)
The Board of Directors, upon recommendation of the Audit Committee,
has selected PricewaterhouseCoopers LLP as independent accountants for TGI for
the fiscal year ending December 31, 1999. PricewaterhouseCoopers LLP has been
the independent public accountants for TGI since February 1997.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting and will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions. If
the appointment of PricewaterhouseCoopers LLP is not ratified, the Board of
Directors will reconsider its selection of auditors.
On February 17, 1997, Transit Group, Inc. engaged
PricewaterhouseCoopers LLP, then known as Price Waterhouse LLP, to succeed
Grenadier, Collins, Mencke & Howard, LLP as its Independent Accountants. The
change in Independent Accountants resulted from TGI's announced plans to form
an Atlanta based holding company and seek to acquire other trucking companies.
The auditor's reports for the last two fiscal years did not contain adverse
opinions or disclaimers of opinion, nor were they modified as to uncertainty,
audit scope, or accounting principles. The decision to change accountants has
been approved by the Board of Directors. There were no disagreements with
Grenadier, Collins, Mencke & Howard, LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.
Adoption of this Proposal requires an affirmative vote of a majority
of the votes cast. Any shares not voted (whether by abstention, broker non-vote
or otherwise) has the effect of a negative vote.
The Board of Directors recommends a vote FOR the approval of the
appointment of PricewaterhouseCoopers LLP as independent accountants for 1999.
RATIFICATION OF CERTAIN PAST ACTIONS BY THE BOARD
OF DIRECTORS AND OFFICERS
(Proposal 4)
TGI has been involved with numerous acquisitions in the period between
the 1998 shareholders' meeting and the 1999 shareholders' meeting. The
Company's President generally has the authority to execute such documents as
are necessary in order for TGI to transact business and the Board of Directors
generally has the authority to determine what corporate actions are in the best
interests of TGI and its shareholders. Nonetheless, the Board of Directors has
determined that shareholder ratification of the prior actions of the Company's
Board of Directors and officers would serve TGI's best interests and that of
its shareholders.
Voting for this proposal has the effect of adopting, ratifying,
approving and confirming all actions and deeds done heretofore by the Directors
of the Company as such actions and deeds appear of record or in the usual
course of business from the date of the 1998 shareholders' meeting to the date
of the 1999 shareholders' meeting, including all transactions in the usual
course of business taken by the Directors of the Company, including all actions
by the Directors at all meetings, whether or not: (a) such meetings were
properly called; (b) a quorum was present, (c) minutes were prepared; (d) such
actions were taken or made by the requisite number of Directors; (e) such
Directors were properly elected and qualified; and (f) such actions were
otherwise irregular.
Voting for this proposal also has the effect of adopting, ratifying,
approving and confirming all actions and deeds done heretofore by the President
and other officers of the Company as such actions and deeds appear of record or
in the usual course of business from the last election of officers, including
all transactions in the usual course of business taken by the President and
other officers of the Company.
This Proposal will be approved if a quorum is present at the meeting
and the votes cast in favor of this Proposal exceed the votes cast opposing it.
Proxies which have been marked as abstentions or which have been designated by
brokers as not voted will not be counted in determining the votes cast on this
Proposal.
The Board of Directors recommends that you vote FOR the ratification
of certain past actions by the Board of Directors and officers from the 1998
shareholders' meeting to the 1999 annual shareholders' meeting.
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions with TGI
of each of the present executive officers of TGI:
<TABLE>
<CAPTION>
Name Age Position with TGI
---- --- -----------------
<S> <C> <C>
T. Wayne Davis 51 Chairman
Philip A. Belyew 51 Chief Executive Officer
N. Mark DiLuzio 41 Senior Vice President - Finance, Mergers and Acquisitions
R. David England 44 Senior Vice President
Wayne N. Nellums 50 Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Kim L. Mattingly 42 Vice President - Human Resources
James G. Salmon 38 Vice President - Mergers and Acquisitions
Scott J. Tsanos 48 Vice President, Chief Accounting Officer, and Assistant Secretary
</TABLE>
TGI's executive officers serve at the pleasure of TGI's Board of Directors.
N. Mark DiLuzio, 41, has been Senior Vice President - Finance Mergers
and Acquisitions of TGI since December 1998. From October 1997 to December 1998
Mr. DiLuzio served as Vice President of Acquisitions of TGI. Prior to his
involvement with TGI, Mr. DiLuzio was Senior Vice President and Corporate
Development Director for First Union Bank in Atlanta from June 1988 to October
1997. He was employed by Texas Commerce Bancshares in Houston from June 1981 to
June 1988 before joining First Union Bank in Atlanta.
R. David England, 44, has served as Vice President from October 1998
to December 1998 and Senior Vice President since that time. From November 1996
to October 1997, Mr. England served as Vice President of Operations for
Corporate Express Delivery, Inc. From 1980 to 1996, Mr. England was employed
by United TransNet, Inc. as Vice President of Operations.
Wayne N. Nellums, 50, has been Senior Vice President, Chief Financial
Officer, Secretary and Treasurer of TGI since December 1998. From May 1997 to
December 1998 Mr. Nellums served as Vice President, Chief Financial Officer,
and Secretary and was Vice President and Chief Financial Officer from May 1995
to October 1995. Prior to joining TGI, Mr. Nellums was a Partner with KPMG Peat
Marwick from July 1979 through February 1987. He was with The Enstar Group,
Inc. and affiliated companies from February 1987 through December 1992 where he
held several positions including Executive Vice President, Chief Financial
Officer from June 1989 through April 1991 and Executive Vice President, Chief
Financial Officer of Enstar Specialty Retail, Inc. from April 1991 through
December 1992. From January 1993 through July 1994 he was a Public Accountant
in Montgomery, Alabama, and from July 1994 through April 1995, Mr. Nellums was
Chief Financial Officer of Affinity Corporation.
Kim L. Mattingly, 42, has been Vice President of Human Resources since
September 1998. Previously, she served as Director of Human Resources for
Corporate Express Delivery, Inc. from November 1996 to October, 1997. Ms.
Mattingly was employed by United TransNet, Inc., formerly known as Courier
Dispatch Group, Inc. from September 1980 through October 1996 as Director of
Human Resources.
James G. Salmon, 33, has been Vice President of Mergers and
Acquisitions since May 1998. From December 1995 to November 1997, Mr. Salmon
was a founder and Board Member of United TransNet, Inc. until acquired by
Corporate Express Delivery, Inc. where he served as an operational vice
president. From October 1989 through December 1995 he served as President of
Salmon Acquisition Corporation.
Scott J. Tsanos, 48, has served as Vice President, Chief Accounting
Officer since February 1998. From November 1996 to December 1997, Mr. Tsanos
served as Senior Vice President of Finance for the Camberley Hotel Company.
From January 1983 through November 1996 Mr. Tsanos was employed by Sybra, Inc.
as Vice President of Finance.
<PAGE>
Executive Compensation
The following table shows the summary compensation paid by TGI to the
Chief Executive Officer and other executive officers whose salary and bonus
exceeded $100,000 in 1998 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table (1996-1998)
Long-Term
Compensation
Annual Compensation (1) Awards
Securities All
Name and Principal Position Underlying Other
Year Salary Bonus Options Granted Compensation(1)
---- ------ ----- --------------- ---------------
<S> <C> <C> <C> <C> <C>
T. Wayne Davis 1998 $102,981 $ -- 25,000 $ --
Chairman of the Board 1997 $ 72,746 -- -- --
1996 -- -- -- --
Philip A. Belyew 1998 $176,896 $ 86,300 100,000 $ 44,241
President and Chief Executive 1997 $150,000 -- 700,000 --
Officer 1996 -- -- -- --
--
Wayne N. Nellums 1998 $140,660 $ 32,200 24,000 $ 16,538
Senior Vice President, CFO, 1997 $104,384 -- 200,000 $ 63,026
Secretary and Treasurer 1996 $ 85,000 -- -- --
N. Mark DiLuzio 1998 $121,146 $ 20,000 50,000 $ 13,585
Senior Vice President of 1997 $ 23,442 -- 100,000 --
Finance, Mergers and 1996 -- -- -- --
Acquisitions --
Scott J. Tsanos 1998 $ 90,166 $ 11,250 75,000 $ 9,832
Vice President and Chief 1997 -- -- -- --
Accounting Officer 1996 -- -- -- --
</TABLE>
- -----------------
(1) In accordance with the Securities and Exchange Commission rules, reporting
is not required unless the aggregate of such compensation exceeds the lessor
f $50,000 or 10% of the total annual salary and bonuses. The amounts reported
for Mr. Belyew in 1998 includes an auto allowance of $11,400, dues of $6,900,
life insurance premiums of $21,191, and executive tax services in the amount
of $4,750. The amounts reported for Mr. Nellums for 1997 include an auto
allowance of $10,450, club dues of $195, reimbursement of relocation
expenses of $39,873, and reimbursement of income taxes on the moving expense
reimbursement in the amount of $12,508.
Stock Options Granted in Fiscal 1998
The following table provides information with respect to the option
granted in 1998 for the Named Executive Officers:
<TABLE>
<CAPTION>
Number of Securities Percent of Total Exercise
Underlying Options Granted to Price Per
Name Options Granted (#) Employees in 1998 Share ($)
---- ------------------- ----------------- ---------
<S> <C> <C> <C>
T. Wayne Davis 25,000 3.1% $5.000
Philip A. Belyew 100,000 12.4% $6.875
Wayne N. Nellums 24,000 3.0% $6.875
N. Mark DiLuzio 50,000 6.2% $6.875
Scott J. Tsanos 75,000 9.3% $6.875
</TABLE>
<PAGE>
Fiscal Year End Option Value
The following table provides information with respect to year-end
option values for the Named Executive Officers. There were no options exercised
in fiscal 1998 by the Named Executive Officers:
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation
for Option Term (1)
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options in Fiscal Price Per Expiration
Name Granted Year Share Date 5% 10%
---- ------- ---- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
T. Wayne Davis 35,000 4.3% $1.430 12/31/00 $123,594 $140,525
6,000 0.7 5.500 12/31/00 -- --
3,000 0.4 2.500 12/31/00 7,384 8,835
50,000 6.2 3.625 12/31/00 66,813 91,000
2,500 0.3 4.000 12/31/00 2,403 3,612
7,500 0.9 4.000 12/31/00 7,209 10,388
3,636 0.5 2.750 12/31/00 8,040 9,799
25,000 3.1 5.000 12/31/08 58,250 166,796
Philip A. Belyew 500,000 62.0 2.000 01/08/07 2,324,275 3,823,075
200,000 24.8 2.000 05/31/07 962,952 1,625,691
100,000 12.4 6.875 05/28/08 63,828 538,043
Wayne N. Nellums 100,000 12.4 2.600 12/30/00 236,125 284,500
200,000 24.8 2.000 01/08/07 1,066,005 1,529,230
24,000 3.0 6.875 05/28/08 15,319 129,130
N. Mark DiLuzio 100,000 12.4 6.000 11/10/07 81,476 412,846
50,000 6.2 6.875 05/28/08 31,914 269,022
Scott J. Tsanos 75,000 9.3 6.875 05/28/08 47,871 403,532
</TABLE>
(1) The dollar amounts under these columns represent the potential
realizable value of each grant of option, assuming that the market
price of our common stock appreciates in value from the date of
grant at the 5% and 10% annual rates prescribed by the Securities and
Exchange Commission and therefore are not intended to forecast
possible future appreciation, if any, of the price of our common stock.
Certain Transactions
On May 2, 1997, the Company's Chairman, the Company's President and
Chief Executive Officer, certain affiliates of the Company's Chairman and
another individual subscribed to purchase 3,272,902 shares of restricted common
stock for cash, cancellation of debt and assumption of debt in the amount of
approximately $5.7 million.
In June 1997, the ECD Trust and T. Wayne Davis elected to convert
their preferred stock and accrued dividends of $385,000 to common stock. The
Company issued 4,323,922 shares of common stock upon the conversion. In July
1997, an affiliate of the TGI's Chairman loaned TGI $4,000,000. The note bears
interest at 9% per annum and is payable in four equal annual installments
commencing April 1999. In December 1998, the Company made a $500,000 principal
payment on the note.
In December 1997, the Company sold the parcel delivery business to the
ECD Trust, an affiliate of the Company's Chairman. The buyer assumed
liabilities of approximately $4.0 million in excess of assets. To compensate
for the excess liabilities assumed by the buyer, the Company issued 877,000
shares of Common Stock to the buyer.
The Company leases certain facilities and equipment from several of
the former owners of businesses acquired including Carroll Fulmer, a member of
our Board of Directors. During 1997 and 1998, rental payments under operating
leases to related third parties aggregated $73,000 and $194,000, respectively.
Payments to related third parties under capitalized leases totaled $1.6 million
and $785,000 in 1998 and 1997, respectively. The terms of the leases with
related parties is, in the opinion of management, no less favorable to the
Company than could be obtained from unrelated third parties.
<PAGE>
SHAREHOLDER PROPOSALS
A shareholder who wishes to submit a proposal for action at the 2000
Annual Meeting must send his proposal sufficiently in advance so that it is
received at TGI's principal executive office by __________ __, 2000. The
shareholder should also notify TGI in writing regarding his intention to appear
personally at the Meeting to present his proposal at the time he submits his
proposal.
OTHER MATTERS
Management of TGI is not aware of any other matter to be presented for
action at the Annual Meeting other that those mentioned in the Notice of Annual
Meeting of Shareholders and referred to in this Proxy Statement. If any other
matter comes before the Meeting, it is the intention of the persons named in
the enclosed proxy to vote on such matters in accordance with their judgment.
ANNUAL REPORT
A copy of the Company's 1998 Annual Report is being mailed with this
Proxy Statement to each shareholder of record. Shareholders not receiving a
copy of such Annual Report may obtain one by writing or calling Vanessa
Plumecocq, Financial Analyst of the Company.
By Order of the Board of Directors,
Philip A. Belyew
President and CEO
April 9, 1999
Atlanta, Georgia
<PAGE>
APPENDIX A
Proxy Card
FOLD AND DETACH HERE
------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors of the
Company. This proxy when properly executed will be voted in accordance with the
specifications made herein by the undersigned shareholder. If no direction is
made, this proxy will be voted FOR the election of the nominees for the
director listed below and all the other Proposals.
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name below)
FOR all nominees listed to the right T. Wayne Davis
(except as marked to the contrary) [ ] Philip A. Belyew
Ford G. Pearson
WITHHOLD authority to vote Derek E. Dewan
for all nominees [ ] Carroll L. Fulmer
Robert R. Hermann, Jr.
2. ADOPTION OF THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF TRANSIT GROUP, INC.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP AS
INDEPENDENT ACCOUNTANTS OF TRANSIT GROUP, INC. FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF CERTAIN PAST ACTIONS OF THE BOARD OF
DIRECTORS AND OFFICERS OF TRANSIT GROUP, INC.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, the Proxies are authorized to vote on such other business
as may properly come before the meeting or adjournment(s), including adjourning
the Annual Meeting to permit, if necessary, further solicitation of proxies.
This proxy may be revoked at any time prior to voting hereof.
This proxy, when properly executed, duly returned and not revoked will be
voted. It will be voted in accordance with the directions given by the
undersigned shareholder. If no direction is made, it will be voted in favor of
the election of nominees for director listed above and the other Proposals
listed on this Proxy.
Dated: ______________________________, 1999
--------------------------------------
Signature(s)
--------------------------------------
NOTE: Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If the
signatory is a corporation, sign the full corporate name by a duly authorized
officer.
<PAGE>
APPENDIX B
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TRANSIT GROUP, INC.
Pursuant to Section 607.1007 of the Florida Business Corporation Act,
Transit Group, Inc., (the "Corporation") hereby amends and restates its
Articles of Incorporation, as they may have previously been amended or restated
as set forth below:
Article I. Name
The name of this Corporation is TRANSIT GROUP, INC. (the "Corporation").
Article II. Purpose
The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any and all lawful act or activity
for which corporations may be organized under the Florida Business Corporation
Act as now or hereinafter in force. The Corporation shall possess and exercise
all of the powers and privileges granted by the Florida Business Corporation
Act, by any other law or by these Articles, together with all such powers and
privileges incidental thereto as may be necessary or convenient to the conduct,
promotion or attainment of the purposes of the Corporation.
Article III. Share Structure
(a) This Corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares which the Corporation is authorized to issue is
120,000,000 shares, of which 100,000,000 shares are Common Stock, $.01 par
value per share, and 20,000,000 shares are Preferred Stock, no par value per
share. The rights and preferences of all outstanding shares of Common Stock
shall be identical. The holders of outstanding shares of Common Stock shall
have the right to vote on all matters submitted to a vote of the stockholders
of the Corporation, on the basis of one vote per share of Common Stock owned.
(b) The Preferred Stock may be issued from time to time in
one or more classes and series pursuant to a resolution or resolutions
providing for such issue duly adopted by the Board of Directors (authority to
do so being hereby expressly vested in the Board of Directors), and such
resolution or resolutions shall also set forth the voting powers, full or
limited or none, of each such class and/or series of Preferred Stock and shall
fix the preferences, limitations and relative rights thereof. The Board of
Directors is further authorized to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly unissued
class or series of Preferred Stock and to fix the number of shares of any class
or series of Preferred Stock and the designation of any such class or series of
Preferred Stock to the fullest extent permitted by the Florida Business
Corporation Act. The Board of Directors, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares constituting any class or series, may increase or
decrease (but not below the number of shares in any such series then
outstanding) the number of shares thereof subsequent to the issue of shares of
that series.
Article IV. Duration
The Corporation shall have perpetual existence.
Article V. Board of Directors
The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors, which shall exercise all
powers conferred under the laws of the State of Florida. The number of
directors shall be determined in accordance with the Bylaws of the Corporation.
The election of directors of the Corporation may, but need not, be by ballot.
<PAGE>
Article VI. Liability of Directors
To the fullest extent permitted by the Florida Business
Corporation Act, as the same now exists or may hereafter be amended in a manner
more favorable to directors, a director of the Corporation shall not be
personally liable to the Corporation, its stockholders or any other person for
monetary damages for breach of fiduciary duty as a director. If the law of the
State of Florida is amended after the filing of these Articles to authorize
corporate action further limiting or eliminating the personal liability of
directors of the Corporation, then the liability of directors to the
Corporation or its stockholders shall be limited or eliminated to the fullest
extent permitted by law of the State of Florida, as so amended from time to
time. Any repeal or modification of the provisions of this Article VI, either
directly or by the adoption of an inconsistent provision of these Articles,
shall be prospective only and shall not adversely affect any right or
protection set forth herein existing in favor of a particular individual at the
time of such repeal or modification.
Article VII. Indemnification
(a) The Corporation shall indemnify, and upon request shall
advance expenses (including attorneys' fees), in the manner and to the fullest
extent permitted by law, to any officer or director of the Corporation (or the
estate of any such person) who was or is a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan (an "indemnitee"), if
he or she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interest of the Corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. To the fullest extent permitted by
law, the indemnification and advances provided for herein shall include
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the indemnitee. The
indemnification provided herein shall not be deemed to limit the right of the
Corporation to indemnify any other person for any such expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement to the
fullest extent permitted by law, both as to action in such person's official
capacity and as to action in another capacity while holding such office.
(b) Notwithstanding any provision of this Article VII to the
contrary, the Corporation shall indemnify any indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation.
(c) Neither any amendment nor repeal of this Article VII, nor
the adoption of any provision of this Corporation's Articles of Incorporation
inconsistent with this Article VII, shall eliminate or reduce the effect of
this Article VII, with respect to any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article VII, would accrue
or arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
Article VIII. Bylaws
The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal bylaws of the Corporation.
Article IX. Corporate Books
The books of the Corporation may be kept (subject to any
provision of law) outside the State of Florida at such place or places as may
be designated from time to time by the Board of Directors or in the bylaws of
the Corporation.
<PAGE>
Article X. Stockholder Proposals
Advance notice of new business to be brought before any
meeting of the stockholders and stockholder nominations for the election of
directors shall be given in the manner and to the extent provided in the Bylaws
of the Corporation.
IN WITNESS WHEREOF, the undersigned has duly executed these Amended and
Restated Articles of Incorporation on the ______ day of ________, 1999.
TRANSIT GROUP, INC.
ATTEST: BY: ________________________________
Philip A. Belyew, Chief
Executive Officer
- -------------------------------
Wayne N. Nellums, Secretary
