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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
for the Fiscal Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period From ____________ to ____________
Commission file number 0-20618
RAILAMERICA, INC.
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(Exact name of registrant as specified in its charter)
Delaware 65-0328006
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
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(Address of principal executive offices)
Registrant's telephone number: (561) 994-6015
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Name of each exchange
Title of Each Class on which registered
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.001 par value
Common Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of April 27, 2000, the aggregate market value of the voting stock of
the registrant held by non-affiliates of the Registrant was $88,246,223.25,
based on a closing price of $5.375 for the Common Stock, par value $.001 per
share (the "Common Stock"), as reported on NASDAQ on such date.
As of April 27, 2000, the number of outstanding shares of Common Stock
of the registrant was 18,502,605.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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EXPLANATORY NOTE
This Amendment No. 1 to the Form 10-K for the fiscal year ended
December 31, 1999 of RailAmerica, Inc. (the "Company") is being filed to add
Part III of the Form 10-K, which was omitted in reliance on General Instruction
G(3) thereto.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Gary O. Marino.................... 55 Chairman of the Board, Chief Executive Officer and
President
Donald D. Redfearn................ 47 Chief Administrative Officer, Executive Vice
President, Secretary and Director
W. Graham Claytor, III............ 49 Senior Vice President-International Rail Group
Robert B. Coward.................. 56 Senior Vice President-Manufacturing Group
John M. Hovis..................... 47 Senior Vice President, Chief Operating Officer--North
American Rail Group
Marinus van Onselen............... 51 Chief Executive Officer, Freight Victoria
Jack Conser....................... 56 Senior Vice President--North Corridor North American
Rail Group
John H. Marino.................... 60 Chairman Emeritus of the Board and Assistant Secretary
Ferd. C. Meyer.................... 60 Director
Douglas R. Nichols................ 47 Director
William G. Pagonis................ 59 Director
Richard Rampell................... 47 Director
John M. Sullivan.................. 75 Director
Charles Swinburn.................. 58 Director
</TABLE>
GARY O. MARINO - Mr. Marino has served as Chairman of the Company's
Board of Directors and Treasurer since the Company's formation in April 1992, as
Chief Executive Officer of the Company since March 1, 1994 and as President
since July 1996. Mr. Marino has also served as the Chairman of the Board and
Treasurer of Huron & Eastern Railway Company, Inc. ("HESR"), a subsidiary of the
Company, since 1986 and as Chairman of the Board, President and Chief Executive
Officer of Kalyn/Siebert I, Inc., a wholly owned subsidiary of the Company
("Kalyn/Siebert"), since its acquisition in 1994. Mr. Marino joined the Company
on a full-time basis in March 1994. Mr. Marino also served as Chairman of Huron
Transportation Group, Inc. ("HTG"), from its formation in 1987 until HTG merged
with RailAmerica Services Corporation in December 1993 (the "HTG Merger"). From
1984 until October 1993, Mr. Marino served as Chairman, President and Chief
Executive Officer of Boca Raton Capital Corporation ("BRCC"), a publicly-traded
venture capital firm. Mr. Marino received his B.A.
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degree from Colgate University in 1966 and an M.B.A. from Fordham University in
1973. From 1966 to 1969, Mr. Marino served as an officer of the United States
Army Ordnance Corps. Gary O. Marino is the brother of John H. Marino.
DONALD D. REDFEARN - Mr. Redfearn has served as the Company's Chief
Administrative Officer since January 2000, has served as the Company's Executive
Vice President and Secretary since December 1994 and has served as an officer
and director of the Company since its formation in April 1992, and of HESR since
1986. Mr. Redfearn joined the Company on a full-time basis in January 1996. From
September 1993 until September 1995, Mr. Redfearn served as President of Jenex
Financial Services, Inc., a financial consulting firm. From 1984 until September
1993, Mr. Redfearn served in various capacities at BRCC, a former stockholder of
the Company, including Senior Vice President, Assistant Secretary and Treasurer.
Mr. Redfearn also served as a Vice President of HTG until the HTG Merger. Mr.
Redfearn received his B.A. degree in Business Administration from the University
of Miami and graduated from the School of Banking of the South at Louisiana
State University.
W. GRAHAM CLAYTOR, III - Mr. Claytor has served as a Senior Vice
President of the Company since joining the Company in March 1996. Prior to
joining the Company, Mr. Claytor served as Managing Director of Southern
Pacific's Plant Rationalization function, charged with selling, leasing and
abandoning surplus branch and mainline trackage. Prior to joining Southern
Pacific, Mr. Claytor served as Superintendent of the Buffalo & Pittsburgh
Railroad and as Trainmaster for Norfolk Southern Corporation, and supervised
marine terminal operations of the Virginia Maryland Railroad. Mr. Claytor
received his B.S. degree from Boston University.
ROBERT B. COWARD - Mr. Coward has served as the Company's Senior Vice
President-Manufacturing Group since the Company's acquisition of Kalyn/Siebert
in 1994. Mr. Coward is responsible for performing all functions related to
Kalyn/Siebert's government contracting business. From 1981 until 1994, Mr.
Coward served as the President and Chief Executive Officer of Kalyn/Siebert and
as General Manager from 1969 until 1981. Mr. Coward received his B.S. in
Industrial Arts from North Texas University.
JOHN M. HOVIS - Mr. Hovis has served as a Senior Vice President and
Chief Operating Officer-North American Rail Group since February 2000. Prior to
joining the Company, Mr. Hovis served as Chief Operating Officer of RailTex,
Inc. ("RailTex") from November 1998 until the Company's acquisition of RailTex
in February 2000. Prior to joining RailTex in 1998, Mr. Hovis was employed by
Burlington Northern Sante Fe Railway and its predecessor railroads for 28 years.
MARINUS VAN ONSELEN - Mr. Van Onselen has served as Chief Executive
Officer and a director of Freight Victoria Limited, a subsidiary of the Company,
since May 1999. Prior to joining Freight Victoria, Mr. van Onselen was the
General Manager of the private rail freight forwarding company Boxcar. Mr. van
Onselen also spent eleven years with V/Line Freight Corporation, the last four
and a half of which as its Managing Director. Freight Victoria acquired the
business of V/Line Freight in April 1999. He has also been a past member of the
boards of Tradegate Australia, the Victorian Grain Elevators Board, the FTC's
Workshop Board, the FTC's Corporate Management Group and he has served on the
Victorian Road Freight Advisory Council, as well as a number of other transport
related committees and groups.
JACK F. CONSER - Mr. Conser joined the Company in 1992 as General
Manager of HESR. Mr. Conser served as a Vice President of the Company from 1994
to 1997 and has served as a Senior Vice President of the Company since July
1997. From 1985 to 1992, Mr. Conser was General Manager of the Genesee & Wyoming
Railroad, the Rochester & Southern Railroad, the Buffalo & Pittsburgh Railroad
and the Dansville & MT. Morris Railroad, affiliates of Genesee Wyoming
Industries. From 1973 to 1985, Mr. Conser was superintendent of traffic for the
Providence & Worcester Railroad.
JOHN H. MARINO - Mr. Marino currently serves as the Chairman Emeritus
of the Board of Directors. Mr. Marino has served as Vice Chairman of the
Company's Board of Directors since July 1996 and has been a director of the
Company since its formation in April 1992. From April 1992 until July 1996, Mr.
Marino served as the Company's President and Chief Operating Officer. Mr. Marino
founded, and from 1986 until April 1996, served as the President and a director
of HESR. Mr. Marino also served as the President of Huron Transportation Group,
Inc.
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("HTG") from its formation in January 1987 until it merged with RailAmerica
Services Corporation in December 1993 (the "HTG Merger"). Prior to founding HESR
in 1985, Mr. Marino served as President and Chief Executive Officer of several
shortline railroads, as an officer of the Reading Railroad and with the United
States Railway Association, Washington, D.C. Mr. Marino received his B.S. degree
in civil engineering from Princeton University in 1961 and his M.S. degree in
transportation engineering from Purdue University in 1963. From 1963 to 1965,
Mr. Marino served as an officer of the United States Army Corps of Engineers.
John H. Marino is the brother of Gary O. Marino.
FERD. C. MEYER, JR. - Mr. Meyer became one of the Company's directors
in February 2000 in connection with the Company's acquisition of RailTex. Mr.
Meyer served as a director of RailTex from 1977 until the Company's acquisition
of RailTex. Mr. Meyer is Executive Vice President and General Counsel of Central
and South West Corporation, a public holding company for five electric utility
companies operating in Texas, Oklahoma, Arkansas, Louisiana, and the United
Kingdom. From 1988 to January 1998, Mr. Meyer was Vice President and Assistant
General Counsel of Central and South West Services, Inc., a subsidiary of
Central and South West Corporation.
DOUGLAS R. NICHOLS - Mr. Nichols has served as a director of the
Company since July 1996. Mr. Nichols is a certified public accountant and the
founder, President and principal stockholder of First London Securities
Corporation, a securities broker-dealer specializing in equity trading and
investment banking. From 1989 to 1991, Mr. Nichols was a Vice President with the
Dallas, Texas office of Smith Barney and from 1986 to 1989 was a broker with the
Dallas branch of Shearson Lehman Brothers. Mr. Nichols is currently a member of
the National Railway Historical Society. Mr. Nichols received a B.A. degree from
Allegheny College in 1974.
WILLIAM G. PAGONIS - Mr. Pagonis became one of the Company's directors
in February 2000 in connection with the Company's acquisition of RailTex. Mr.
Pagonis served as a director of RailTex from February 1999 until the Company's
acquisition of RailTex. Mr. Pagonis is Executive Vice President of Logistics for
Sears, Roebuck and Company, where he is responsible for all of Sears' logistics
functions, including vendor relations, transportation, distribution,
international logistics, outlet stores, home delivery services and the
integration of logistics information services. Prior to joining Sears in
November 1993, Mr. Pagonis served in the U.S. Army for 29 years, retiring with
the three-star rank of Lieutenant General.
RICHARD RAMPELL - Mr. Rampell has served as a director of the Company
since July 1995. Mr. Rampell, a certified public accountant, is currently the
Chief Executive of Rampell & Rampell, P.A., Certified Public Accountants, of
Palm Beach, Florida. Mr. Rampell is a past President of the Palm Beach Tax
Institute and a past President of the Florida Institute of CPA's, East Coast
Chapter. Mr. Rampell graduated with honors from Princeton University with an
A.B. degree and received an M.B.A. from the Wharton School at the University of
Pennsylvania.
JOHN M. SULLIVAN - Mr. Sullivan has served as a director of the Company
since January 1993. From 1977 until 1981, Mr. Sullivan served, upon appointment
by President Carter, as head of the United States Federal Railroad
Administration. From 1982 until 1990, Mr. Sullivan was President and Chief
Executive Officer of Haug Die Casting, Inc. Mr. Sullivan is currently the Vice
President - Sales of Sullivan Die Casting, Inc., a manufacturer of zinc die
casting, in which Mr. Sullivan owns a 19% ownership interest. Mr. Sullivan
received his B.S. degree in engineering from the United States Naval Academy and
served with the United States Navy as an officer, and ultimately as a carrier
aviator from 1946 to 1954.
CHARLES SWINBURN - Mr. Swinburn has served as a director of the Company
since February 1995. Mr. Swinburn is currently a practicing attorney in the
Washington, D.C. office of Morgan, Lewis & Bockius, where he specializes in
environmental law. From April 1990 through August 1993, Mr. Swinburn served as a
consultant to private industry and the government. Prior to that time, Mr.
Swinburn served as Vice President of Rollins Environmental Services, Inc. Mr.
Swinburn has served in various capacities at the U.S. Department of
Transportation, most recently as Deputy Assistant Secretary for Policy and
International Affairs. Mr. Swinburn received his B.A. degree from Princeton
University in 1969, his M.B.A. from Harvard Business School in 1971 and his J.D.
from the University of Pennsylvania in 1993.
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ELECTION OF EXECUTIVE OFFICERS
The Company's officers are elected annually by the Board of Directors
and serve at the discretion of the Board of Directors.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of the Company's outstanding Common Stock, to file with the
Securities and Exchange Commission (the "SEC"), initial reports of ownership and
reports of changes in ownership of Common Stock. Such persons are required by
SEC regulation to furnish the Company with copies of all such reports.
To the Company's knowledge, based solely on a review of the copies of
filings furnished to the Company and written or oral representations that no
other reports were required, the Company believes that all of its directors and
executive officers complied during 1999 with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934, with the exception of (i)
the failure by W. Graham Claytor, III, the Company's Senior Vice
President-International Rail Group, to timely file a Form 5 reporting the grant
to him of options to purchase 11,500 shares of Common Stock on June 30, 1998 and
(ii) the failure by Richard Rampell, a Director of the Company, to timely file a
Form 5 reporting the grant to him of options to purchase 50,000 shares of Common
Stock on June 30, 1995 and the grant to him of options to purchase 5,000 shares
of Common Stock on June 30, 1998, all of which transactions were reported in
February 2000.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1999, the Board of Directors of the
Company held a total of five meetings and took a number of actions by unanimous
written consent. During 1999, no director attended fewer than 75% of the
aggregate of (i) the number of meetings of the Board of Directors held during
the period he served on the Board, and (ii) the number of meetings of committees
of the Board of Directors held during the period he served on such committees.
Messrs. Swinburn, Sullivan and Rampell are the current members of the
Company's Audit Committee, which committee held two meetings during the year
ended December 31, 1999. The duties and responsibilities of the Audit Committee
include (i) recommending to the Board of Directors the appointment of the
Company's auditors and any termination of engagement, (ii) reviewing the plan
and scope of audits, (iii) reviewing the Company's significant accounting
policies and internal controls and (iv) having general responsibility for all
audit related matters.
Messrs. Swinburn, Nichols and Rampell are the current members of the
Company's Compensation Committee, which committee held three meetings during the
year ended December 31, 1999. The Compensation Committee reviews and approves
the compensation of the Company's executive officers and administers each of the
Company's compensation and benefit plans.
In addition to the foregoing committees, the Board has established an
Executive Committee consisting of Messrs. Gary O. Marino, Donald D. Redfearn and
Richard Rampell which held three meetings during the year ended December 31,
1999, and a Government Affairs Committee consisting of Messrs. John H. Marino,
John Sullivan and Charles Swinburn. The Executive Committee may exercise all the
authority of the full board and take any action that could be taken by the board
except the duties that may not be delegated. The Government Affairs Committee
recommends corporate policy and position on Federal and State legislative
initiatives affecting the
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freight transportation industry, coordinates lobbying efforts with various
regional and national industry and trade associations and agencies and
establishes guidelines for use of government affairs outside consultants.
The Board does not have a standing nominating committee.
ADDITIONAL INFORMATION CONCERNING DIRECTORS
Each non-employee director of the Company receives a directors fee of
$2,000 per month, as well as $500 per Board meeting and $400 for each additional
day spent on Company business. All directors are reimbursed for reasonable
out-of-pocket expenses associated with travel to meetings of the Company's Board
of Directors or committees thereof. Directors who are also employees of the
Company do not receive additional compensation for their services as directors.
As more fully described in Item 11 below, non-employee directors are
eligible to receive options under the Company's 1995 Non-Employee Director Stock
Option Plan (the "Directors Plan"). The Directors Plan provides for an automatic
grant of an option to purchase 50,000 shares of Common Stock upon a person's
election as a non-employee director of the Company.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 1999,
1998 and 1997, the aggregate compensation awarded to, earned by or paid to (i)
Gary O. Marino, the Company's Chairman of the Board, Chief Executive Officer and
President, (ii) Donald D. Redfearn, the Company's Chief Administrative Officer,
Executive Vice President-Administration and Secretary, (iii) W. Graham Claytor
III, the Company's Senior Vice President-International Rail Group and (iv)
Robert B. Coward, the Company's Senior Vice President- Manufacturing Group (v)
Jack F. Conser, the Company's Senior Vice President-North Corridor North
American Rail Group and (vi) Marinus van Onselen, the Chief Executive Officer of
Freight Victoria (collectively, the "Named Executive Officers") during each of
such years. No other executive officer of the Company received compensation in
excess of $100,000 in 1999, 1998 or 1997. The Company did not grant any
restricted stock awards or stock appreciation rights or make any long term
incentive plan payouts during such years.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Compensation Awards
--------------------------------------------- -------------------------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation(1) Options(#) Compensation($)
--------------------------- ---- --------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gary O. Marino............... 1999 $486,583(2) $417,500(3) $129,743(4) 550,000(5) --
Chairman of the Board, 1998 301,000 230,617(8) 301,875(6) 350,000(7) --
Chief Executive Officer, 1997 275,000(17) 93,736(10)(9) 115,235(6) 20,000(12) --
President and Chief
Financial Officer
Donald D. Redfearn .......... 1999 181,000 142,500 34,490(4) 130,000(13) --
Chief Administrative 1998 151,000 52,031 -- 20,000(14) --
Officer, Executive Vice 1997 125,000 20,275 93,556(6) 25,000(12) --
President and Secretary
W. Graham Claytor............ 1999 137,500 72,500 28,918(4) 31,500(15) --
Senior Vice President 1998 115,000 45,000 -- 11,500(14) --
1997 93,333 83,000 -- 15,000(12) --
Robert Coward................ 1999 153,297 30,469 58,419(4) 31,500(15) --
Senior Vice President 1998 115,000 57,000 -- 11,500(14) --
1997 96,977 47,500 -- 25,000(12) --
Jack F. Conser............... 1999 103,500 27,563 31,775 23,000(16) --
Senior Vice 1998 96,000 9,797 11,200(6) 8,000(14) --
President--North Corridor 1997 81,250 9,110 7,500 10,000(11) --
North American Rail Group
Marinus van Onselen.......... 1999 164,640(19) -- -- 25,000(18)
Chief Executive Officer, 1998 -- -- -- --
Freight Victoria 1997 -- -- -- --
</TABLE>
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(1) The aggregate amount of perquisites and other personal benefits
provided to each named executive officer is less than 10% of the total
amount of salary and bonus of the officer.
(2) Includes $100,583 which related to a deferred compensation plan that
was paid directly to the executive officer.
(3) Includes forgiveness of $32,500 under a promissory note owed to the
Company.
(4) Consists of amounts paid under a Supplemental Executive Retirement
Plan.
(5) Represents options for the purchase of 50,000 shares of the Company's
Common Stock at an exercise price of $8.75 and options for the purchase
of 500,000 shares of the Company's Common Stock at an exercise price of
$9.00 granted under the Company's 1998 Executive Incentive Compensation
Plan. 500,000 of such options are subject to approval by the Company's
stockholders of an amendment to such Plan increasing the number of
shares of Common Stock available for issuance under such Plan.
(6) Represents gains on exercise of stock options and subsequent sales of
the Common Stock.
(7) Granted pursuant to the terms of Mr. Gary Marino's employment
agreement. Such options have exercise prices ranging from $7.25 to
$9.50 per share.
(8) Includes forgiveness of promissory notes to the Company in the amount
of $80,617.
(9) Includes forgiveness of a promissory note to the Company in the amount
of $47,500.
(10) Represents a bonus which was paid to Mr. Gary Marino in 1997 based upon
the performance of the Company for the year ended December 31, 1996.
(11) Represents options granted under the Company's 1995 Stock Incentive
Plan which have an exercise price of $3.625 per share.
(12) Represents options granted under the Company's 1995 Stock Incentive
Plan which have an exercise price of $5.00 per share.
(13) Represents options for the purchase of 20,000 shares of the Company's
Common Stock at an exercise price of $8.75 and for the purchase of
110,000 shares of the Company's Common Stock at an exercise price of
$9.00 granted under the Company's 1998 Executive
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Incentive Compensation plan. 110,000 of such options are subject to
approval by the Company's stockholders of an amendment to such Plan
increasing the number of shares of Common Stock available for issuance
under such Plan.
(14) Represents options granted under the Company's 1998 Omnibus Executive
Compensation Plan which have an exercise price of $6.125 per share.
(15) Represents options for the purchase of 11,500 shares of the Company's
Common Stock at an exercise price of $8.75 and for the purchase of
20,000 shares of the Company's Common Stock at an exercise price of
$9.00 granted under the Company's 1998 Executive Incentive Compensation
Plan. 20,000 of such options are subject to approval by the Company's
stockholders of an amendment to such Plan increasing the number of
shares of Common Stock available for issuance under such Plan.
(16) Represents options for the purchase of 8,000 shares of the Company's
Common Stock at an exercise price of $8.75 and for the purchase of
15,000 shares of the Company's Common Stock at an exercise price of
$9.00 granted under the Company's 1998 Executive Incentive Compensation
Plan. 15,000 of such options are subject to approval by the Company's
stockholders of an amendment to such Plan increasing the number of
shares of Common Stock available for issuance under such Plan.
(17) Includes deferred compensation of $25,000 which was contributed to a
nonqualified deferred compensation plan in January 1997.
(18) Granted pursuant to the Company's 1998 Executive Incentive Compensation
Plan. Such options have an exercise price of $9.750.
(19) Based upon accrued salary expense incurred by the Company for Mr. van
Onselen's 1999 services which has not yet paid to Mr. van Onselen.
Computed by applying an exchange rate of $.58AUS/$1.00 U.S. to $280,000
AUS.
EMPLOYMENT AGREEMENTS
As of January 1, 1998, Mr. Gary O. Marino entered into a new employment
agreement (the "Agreement") with the Company which provides that he serve as
Chief Executive Officer of the Company. Under the Agreement, Mr. Marino is to
receive a base salary of $300,000 per year. Mr. Marino's base salary is subject
to increase in accordance with the Consumer Price Index, as well as additional
increases in the discretion of the Board of Directors. On January 1, 1999, the
Board of Directors increased Mr. Marino's base salary to $385,000 per year. Mr.
Marino is also entitled to a $1,000 monthly car allowance. Under the Agreement,
Mr. Marino is entitled to such benefits (including medical, dental, disability
and life insurance) as the Company and its subsidiaries typically provide to
their employees generally. The Agreement also provides that the Company make
annual cash payments for retirement benefits to a trust for the benefit of Mr.
Marino.
In addition, pursuant to the Agreement, Mr. Marino was issued options
to purchase an aggregate of 300,000 shares of Common Stock at exercise prices
ranging from $7.25 to $9.50 per share. All of such options are currently
exercisable and have a term of ten (10) years from the date they became
exercisable. The Agreement has an initial term expiring on December 31, 2000,
and is subject to automatic one year renewal terms, unless either party notifies
the other of non-renewal 180 days prior to the expiration of the then current
term. In the event Mr. Marino's employment is terminated without cause pursuant
to a change in control of the Company, Mr. Marino is entitled to receive as of
the date of termination a lump sum equal to 150% of his total compensation for
the 12 month period prior to the date of termination. The Agreement also
contains certain non-competition provisions applicable to Mr. Marino should he
resign from the Company or be terminated with cause.
STOCK OPTION AND BONUS PLANS
1992 STOCK OPTION PLAN. The Company's 1992 Stock Option Plan provides
officers, employees and consultants of the Company and its subsidiaries who are
not directors of the Company or 5% stockholders (directly or indirectly) the
ability to receive grants of options to purchase shares of Common Stock. The
1992 Stock Option Plan was approved by the Company's stockholders as of July 1,
1992, and became effective as of such date. The Company has reserved 250,000
shares of Common Stock for the grant of options under the 1992 Stock Option
Plan, all of which have been granted and 36,800 of which are currently
outstanding at an exercise price of $3.50 per share.
CORPORATE SENIOR EXECUTIVE BONUS PLAN. In May 1995, the Board of
Directors adopted its Corporate Senior Executive Bonus Plan (the "Bonus Plan")
pursuant to which participants receive cash bonuses based upon the annual
performance of the Company and its subsidiaries, commencing with the 1995 fiscal
year.
The Company's 1992 Stock Option Plan and Bonus Plan were replaced by
the 1998 Executive Incentive Compensation Plan (see below) as of April 1998.
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QUALIFIED DEFERRED COMPENSATION PLAN. Effective January 3, 1997, the
Company adopted certain nonqualified deferred compensation plans and established
a trust to which the Company made contributions under the Plans (the "Trust").
In connection with the foregoing, the Company executed Nonqualified Deferred
Compensation Agreements (each, a "Deferred Compensation Agreement") with Gary O.
Marino, the Company's Chairman of the Board, President and Chief Executive
Officer, and John Marino, the Company's Vice Chairman of the Board, pursuant to
which such individuals may defer a percentage of their respective compensation
and contribute such amount to their retirement pay. Any amount of compensation
or bonus deferred by the executive shall be transferred to the Trust and
thereafter be invested and reinvested by the trustee and paid to the executive
in accordance with the Trust and the Deferred Compensation Agreement. In
addition to each executive's requested deferral, the Company shall transfer to
the Trust for the executive's benefit each calendar year at least $20,000, which
amounts shall be invested and reinvested by the trustee in accordance with the
Trust and the Deferred Compensation Agreements. The Qualified Deferred
Compensation Plan was replaced by the Company's Supplemental Executive
Retirement Plan (defined hereunder).
1995 STOCK INCENTIVE PLAN. Effective January 1, 1995, the Company
adopted the 1995 Stock Incentive Plan pursuant to which key personnel of the
Company selected as participants are eligible to receive awards of various forms
of equity-based incentive compensation, including stock options, stock
appreciation rights, stock bonuses, restricted stock awards, performance units
and phantom stock units, and awards consisting of combinations of such
incentives. The Company has reserved 1,000,000 shares of Common Stock for the
grant of options under the 1995 Stock Incentive Plan, 609,500 of which have been
granted and 312,450 of which are currently outstanding at exercise prices
ranging from $3.50 to $5.00.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN. Effective January 1,
1995, the Board of Directors adopted the Directors Plan, under which, as amended
and restated effective April 8, 1999, 500,000 shares of Common Stock have been
reserved for issuance. Pursuant to the Directors Plan, directors of the Company
who are not also employees of the Company ("Non-Employee Directors") are granted
options to purchase Common Stock upon election to the Company's Board of
Directors. The Directors Plan is administered by the Compensation Committee, the
members of which are also participants therein. Subject to the provisions of the
Directors Plan, the Compensation Committee has sole discretionary authority to
construe, interpret and apply the terms of the Directors Plan, to determine all
questions thereunder, and to adopt and amend such rules and regulations for the
administration thereof as it may deem desirable.
Under the terms of the Directors Plan, each Non-Employee Director shall
be granted an option to purchase 50,000 shares of Common Stock on the date such
person is first elected to become a director of the Company. The term of the
Directors Plan is ten years from the effective date, after which no further
options will be granted thereunder. Options granted under the Directors Plan
expire ten years from the date of grant. The exercise price per share of each
option granted under the Directors Plan will be the fair market value of the
Common Stock on the date prior to the date the option is granted. Options
granted under the Directors Plan vest over a period of three years at the rate
of one-third annually on each anniversary date of the date of grant, provided
the Non-Employee Director to whom the options are granted continues to serve as
a director on each such vesting date.
On April 13, 2000, the Board of Directors adopted the First Amendment
to the Amended and Restated 1995 Non-Employee Director Stock Option Plan and
recommended that it be submitted to the Company's stockholders for their
approval at the 2000 Annual Meeting of Stockholders (the "Annual Meeting). This
Plan has been amended to increase the number of shares eligible for grant from
500,000 to 750,000, to provide for additional annual grants of options to
purchase shares of Common Stock to directors in addition to the grant of options
made upon appointment as a director and to provide for a vesting schedule
whereby the options would vest one-third on the date of grant and then one-third
annually on each of the two consecutive anniversaries of the date of grant.
As of the date hereof, options under the Directors Plan to purchase (i)
10,000 shares of Common Stock have been granted to Donald D. Redfearn at an
exercise price of $3.50 per share, (ii) 50,000 shares of Common Stock have been
granted to Charles Swinburn at an exercise price of $4.19 per share, (iii)
50,000 shares of Common Stock have been granted to Richard Rampell at an
exercise price of $4.81 per share, (iv) 50,000 shares of Common Stock have been
granted to Douglas Nichols at an exercise price of $3.50 per share, (v) 5,000
shares of Common
9
<PAGE> 10
Stock have been granted at an exercise price of $6.125 per share to each of John
Marino, Douglas Nichols, Richard Rampell, John Sullivan and Charles Swinburn,
(vi) 5,000 shares of Common Stock have been granted at an exercise price of
$8.75 per share to each of John Marino, Douglas Nichols, Richard Rampell, John
Sullivan and Charles Swinburn and (vii) 50,000 shares of Common Stock have been
granted at an exercise price of $9.00 per share to each of John Marino, Douglas
Nichols, Richard Rampell, John Sullivan and Charles Swinburn.
1995 EMPLOYEE STOCK PURCHASE PLAN. The Board of Directors of the
Company has adopted, effective January 1, 1995, the 1995 Employee Stock Purchase
Plan (the "Stock Purchase Plan"), under which 250,000 shares of Common Stock are
reserved for issuance. During the first quarter of 1996, the Company implemented
the Stock Purchase Plan. The Stock Purchase Plan, which is designed to qualify
under Section 423 of the Internal Revenue Code, is designed to encourage stock
ownership by employees of the Company. Employees of the Company other than
members of the Board of Directors and owners of 5% or more of the Company's
Common Stock are eligible to participate in the Stock Purchase Plan, with
certain exceptions, if they are employed by the Company for at least 20 hours
per week and more than five months per year. No employee is eligible to
participate who, after the grant of options under the Stock Purchase Plan, owns
(including all shares which may be purchased under any outstanding option) 5% or
more of the Company's Common Stock.
On January 1 of each year (the "Enrollment Date"), the Company will
grant to each participant an option to purchase on December 31 of such year (the
"Exercise Date"), at a price determined in the manner described below (the
"Purchase Price"), the number of full shares of Common Stock which his or her
accumulated payroll deductions on the Exercise Date will purchase at the
Purchase Price. The Purchase Price will be the lesser of (i) a percentage (not
less than 85%) of the fair market value of the Common Stock on the Enrollment
Date, or (ii) a percentage (not less than 85%) of the fair market value of the
Common Stock on the Exercise Date. As soon as practicable after any Exercise
Date on which a purchase of shares of Common Stock occurs, the Company will
deliver to each participant a certificate representing the shares purchased upon
exercise of his or her option; however, the Compensation Committee may determine
to hold a participant's certificates until the participant ceases participation
in the Stock Purchase Plan or requests delivery of the certificates.
1998 EXECUTIVE INCENTIVE COMPENSATION PLAN. In April 1998, the Board of
Directors adopted the Company's 1998 Executive Incentive Compensation Plan (the
"1998 Incentive Plan"), which was approved by the Company's stockholders in June
1998. The terms of the 1998 Incentive Plan provide for grants of stock options,
stock appreciation rights ("SARs"), restricted stock, deferred stock, other
stock-related awards and performance or annual incentive awards that may be
settled in cash, stock or other property (collectively, "Awards"). The 1998
Incentive Plan supersedes the Company's 1992 and 1995 Stock Option Plans and the
Bonus Plan (collectively, the "Preexisting Plan"). The effective date of the
1998 Incentive Plan was April 16, 1998 (the "Effective Date"). Awards to
purchase 851,000 shares of Common Stock were made under the 1998 Incentive Plan
during 1999.
Although certain types of Awards authorized under the 1998 Incentive
Plan are similar to those under the Preexisting Plan, the Board determined to
adopt an entirely new plan in order to respond to a number of changes and
proposed changes relating to Rule 16b-3 under the Exchange Act and regulations
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), to broaden the types of performance goals that may be set and the types
of Awards that may be granted by the Committee and otherwise to add flexibility
to annual incentive awards and other performance-based awards intended to
qualify for corporate tax deductions under Section 162(m), to increase the
number of shares of Common Stock that may be subject to Awards, and to otherwise
adopt provisions intended to enable the Committee to better promote the goals of
the Company's compensation policies and programs, as discussed above.
SHARES AVAILABLE FOR AWARDS; ANNUAL PER-PERSON LIMITATIONS. Under the
1998 Incentive Plan as currently in effect, the total number of shares of Common
Stock that may be subject to the granting of Awards under the 1998 Incentive
Plan at any time during the term of the 1998 Incentive Plan shall be equal to
930,000 shares, plus the number of shares with respect to which Awards
previously granted under the Preexisting Plan that terminate without being
exercised, and the number of shares that are surrendered in payment of any
Awards or any tax withholding requirements. In addition, the 1998 Incentive Plan
currently provides that the maximum number of shares which may be received by
any one individual during any fiscal year pursuant to Awards thereunder shall
not
10
<PAGE> 11
exceed 400,000 shares. As discussed below, the Board of Directors has
approved amendments to the 1998 Incentive Plan increasing the number of shares
of Common Stock available for the granting of Awards under the 1998 Incentive
Plan as well as a modification of the annual per-person limitations subject to
stockholder approval.
The 1998 Incentive Plan currently limits the number of shares which may
be issued pursuant to incentive stock options to 930,000 shares.
In addition, the 1998 Incentive Plan imposes individual limitations on
the amount of certain Awards in part to comply with Code Section 162(m). Under
these limitations, during any fiscal year the number of options, SARs,
restricted shares of Common Stock, deferred shares of Common Stock, shares as a
bonus or in lieu of other Company obligations, and other stock-based Awards
granted to any one participant may not exceed 400,000 for each type of such
Award, subject to adjustment in certain circumstances. The maximum amount that
may be paid out as an annual incentive Award or other cash Award in any fiscal
year to any one participant is $1,000,000, and the maximum amount that may be
earned as a performance Award or other cash Award in respect of a performance
period by any one participant is $2,000,000.
The Committee is authorized to adjust the limitations described in the
two preceding paragraphs and is authorized to adjust outstanding Awards
(including adjustments to exercise prices of options and other affected terms of
Awards) in the event that a dividend or other distribution (whether in cash,
shares of Common Stock or other property), recapitalization, forward or reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase,
share exchange or other similar corporate transaction or event affects the
Common Stock so that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of participants. The Committee is also authorized
to adjust performance conditions and other terms of Awards in response to these
kinds of events or in response to changes in applicable laws, regulations or
accounting principles.
On April 13, 2000, the Board of Directors adopted the First Amendment
to the 1998 Incentive Plan and recommended that it be submitted to the Company's
stockholders for their approval at the Annual Meeting. The amendments to the
1998 Incentive Plan provide (a) that the maximum number of shares that may be
subject Awards under the 1998 Incentive Plan will be equal to the sum of (i) 15%
of the number of shares of Common Stock of the Company that are outstanding as
of April 15, 2000, plus (ii) 15% of the number of shares of Common Stock of the
Company issued after April 15, 2000 (including any shares issued as a result of
conversions of preferred stock and/or debt obligations of the Company into
shares of Common Stock), plus (iii) the number of shares of Common Stock that
are surrendered in payment of any awards or any tax withholding with regard
thereto, minus (iv) the number of shares that then are subject to outstanding
awards under the Preexisting Plan and (b) the maximum number of shares which may
be received by any one individual during any fiscal year pursuant to Awards
thereunder may not exceed 900,000 shares.
ELIGIBILITY. The persons eligible to receive Awards under the 1998
Incentive Plan are the officers, directors, employees and independent
contractors of the Company and its subsidiaries. No independent contractor will
be eligible to receive any Awards other than stock options. An employee on leave
of absence may be considered as still in the employ of the Company or a
subsidiary for purposes of eligibility for participation in the 1998 Incentive
Plan. As of March 19, 2000 approximately 2,700 persons were eligible to
participate in the 1998 Incentive Plan.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP"). Effective November
1999, the Company adopted a Supplemental Executive Retirement Plan (the
"Retirement Plan"). The Retirement Plan is structured as a split dollar split
ownership life insurance arrangement in lieu of a standard SERP. Pursuant to the
terms of the Retirement Plan, premium payments are based on an actuarial
standard such that the accumulated cash value is designed to coordinate with
Social Security payments and provide integrated benefits equal to fifty percent
(50%) of the final average compensation when the beneficiary (the "Participant")
attains the age of 65. In addition, the life insurance product is designed to
recover to the Company the cost of the Retirement Plan plus a six percent (6%)
opportunity cost at the death of the Participant.
11
<PAGE> 12
OPTION/SAR GRANT TABLE
The following table sets forth information concerning grants of stock
options made during the year ended December 31, 1999 to the Named Executive
Officers. No stock appreciation rights were granted in 1999.
<TABLE>
<CAPTION>
Number of Securities % of Total Options/SARs
Underlying Options/ Granted to Employees in Exercise Price Expiration
Name SARs Granted(#) Fiscal Year ($/Sh) Date
---- ------------------ ------------------------ --------------- ----------
<S> <C> <C> <C> <C>
Gary O. Marino 500,000(1) 43% $9.00 01/01/10
50,000 4% $8.75 4/20/09
Donald D. Redfearn 110,000(1) 9% $9.00 01/01/10
20,000 2% $8.75 4/20/09
W. Graham Claytor 20,000(1) 2% $9.00 01/01/10
11,500 1% $8.75 4/20/09
Robert B. Coward 20,000(1) 2% $9.00 01/01/10
1,500 1% $8.75 4/20/09
Jack F. Conser 15,000(1) 2% $9.00 01/01/10
8,000 1% $8.75 4/20/09
Marinus van Onselen 25,000 2% $9.75 10/13/09
</TABLE>
- ----------
(1) The grant of these options is subject to approval by the Company's
stockholders of an amendment to the 1998 Executive Incentive Compensation
Plan increasing the number of shares of Common Stock available for
issuance under such Plan.
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers at December 31,
1999. No stock options were exercised by the Named Executive Officers during the
year ended December 31, 1999. No stock appreciation rights were granted or are
outstanding.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-The-Money
Unexercised Options At Options at
December 31, 1999(#) December 31, 1998($)(1)
------------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gary O. Marino(2)........................ 582,500 550,000 1,470,781 --
Donald D. Redfearn(3).................... 91,667 143,333 334,063 32,499
W. Graham Claytor(4)..................... 28,833 39,167 111,905 18,688
Robert B. Coward(5)...................... 28,833 39,167 98,405 18,688
Jack F. Conser(6)........................ 39,467 28,333 176,551 12,999
Marinus van Onselen(7)................... 8,333 16,667 -- --
</TABLE>
- ----------
(1) The closing sale price of the Company's Common Stock on December 31,
1999 as reported by Nasdaq was $8.5625 per share. Value is calculated
by multiplying (a) the difference between $8.5625 and each option
exercise price by (b) the number of shares of the Company's Common
Stock underlying the option.
(2) At December 31, 1999, Mr. Marino had been granted the following options
to purchase the Company's Common Stock, which options were exercisable
at year end: (1) options to purchase 87,500 shares of the Company's
Common Stock at an exercise price of $3.40 per share, (2) options to
purchase 87,500 shares of the Company's Common Stock at an exercise
price of $3.75 per share, (3) options to purchase 87,500 shares of the
Company's Common Stock at an exercise price of $4.15 per share, (4)
options to purchase 20,000 shares of the Company's Common Stock at an
exercise price of $5.00 per share, (5) options to purchase 75,000
shares of the Company's Common Stock at an exercise price of $7.25 per
share, (6) options to purchase 75,000 shares of the Company's Common
Stock at an
12
<PAGE> 13
exercise price of $8.00 per share, (7) options to purchase 75,000
shares of the Company's Common Stock at an exercise price of $8.75 per
share, and (8) options to purchase 75,000 shares of the Company's
Common Stock at an exercise price of $9.50 per share.
(3) At December 31, 1999, Mr. Redfearn had been granted the following
options to purchase the Company's Common Stock, which options were
exercisable at year end: (1) options to purchase 10,000 shares of the
Company's Common Stock at an exercise price of $3.50 per share, (2)
options to purchase 50,000 shares of the Company's Common Stock at an
exercise price of $5.00 per share, (3) options to purchase 25,000
shares of the Company's Common Stock at an exercise price of $5.00 per
share, and (4) options to purchase 6,667 shares of the Company's Common
Stock at an exercise price of $6.125 per share.
(4) At December 31, 1999, Mr. Claytor had been granted the following
options to purchase the Company's Common Stock, which options were
exercisable at year end: (1) options to purchase 10,000 shares of the
Company's Common Stock at an exercise price of $3.65 per share, (2)
options to purchase 15,000 shares of the Company's Common Stock at an
exercise price of $5.00 per share, and (3) options to purchase 3,833
shares of the Company's Common Stock at an exercise price of $6.125 per
share.
(5) At December 31, 1999, Mr. Coward had been granted the following options
to purchase the Company's Common Stock, which options were exercisable
at year end: (1) options to purchase 25,000 shares of the Company's
Common Stock at an exercise price of $5.00 per share, and (2) options
to purchase 3,833 shares of the Company's Common Stock at an exercise
price of $6.125 per share.
(6) At December 31, 1999, Mr. Conser had been granted the following options
to purchase the Company's Common Stock, which options were exercisable
at year end: (1) options to purchase 16,800 shares of the Company's
Common Stock at an exercise price of $3.50 per share, (2) options to
purchase 10,000 shares of the Company's Common Stock at an exercise
price of $3.625 per share, (3) options to purchase 10,000 shares of the
Company's Common Stock at an exercise price of $5.00 per share and
options to purchase 2,667 shares of the Company's Common Stock at an
exercise price of $6.125 per share.
(7) At December 31, 1999, Mr. van Onselen had been granted options which
were exercisable at year end to purchase 8,333 shares of the Company's
Common Stock at an exercise price of $9.75 per share.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 27, 2000, the number of
shares of Common Stock that were owned beneficially by (i) each person who is
known by the Company to beneficially own more than 5% of the Common Stock, (ii)
each director, (iii) the Named Executive Officers (as defined in "Executive
Compensation") and (iv) all directors and executive officers of the Company as a
group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percentage
of Beneficial Owner of Beneficial Ownership(1) of Outstanding Shares(1)
------------------- -------------------------- ------------------------
<S> <C> <C>
William Ehrman and Group(2)............................. 3,756,237 20.3%
c/o Arthur Goetchius
300 Park Avenue, 21st Floor
New York, New York 10022
Luther King Capital Management Corporation(3)........... 1,373,000 7.4%
301 Commerce, Suite 1600
Fort Worth, TX 76102
Cramer Rosenthal McGlynn, LLC(4) ....................... 1,094,050 5.9%
707 Westchester Avenue
White Plains, NY 10604
Gary O. Marino(5)....................................... 955,695 5%
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
John H. Marino(6)....................................... 130,628 *
RailAmerica, Inc.
King Street Station
Suite 150, 1800 Diagonal Road
Alexandria, Virginia 22314
Donald D. Redfearn(7)................................... 81,543 *
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percentage
of Beneficial Owner of Beneficial Ownership(1) of Outstanding Shares(1)
------------------- -------------------------- ------------------------
<S> <C> <C>
John M. Sullivan(8)..................................... 53,667 *
10279 SW Stones Throw Terrace
Palm City, Florida 34990
Richard Rampell(9)...................................... 72,667 *
122 North County Road
Palm Beach, Florida 33480
Charles Swinburn(10).................................... 72,667 *
1800 M. Street, NW
Washington, D.C. 20036
Douglas R. Nichols(11).................................. 212,394 1.1%
260 State Street
Dallas, Texas 75201
W. Graham Claytor III(12)............................... 44,167 *
Pier 33 North
San Francisco, California 94111
Jack F. Conser(13)...................................... 50,256 *
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
Robert B. Coward(14).................................... 150,481 *
U.S. Highway 84 West
P.O. Box 487
Gatesville, Texas 76528
Marinus van Onselen(15)................................. 8,333 *
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
John M. Hovis(16)....................................... 63,284 *
1035 Bradford Court
Keller, Texas 76248
Ferd. C. Meyer, Jr. (17) .......................... 28,662 *
Central and South West Corporation
616 Woodall Rodgers Freeway
Dallas, Texas 75022
William G. Pagonis(18)............................. 18,606 *
Sears, Roebuck & Co.
3333 Beverly Road
Location B6-209B
Hoffman Estates, IL 60179
All directors and executive officers as a group 2,084,703 10.4%
(14 persons)(19).................................
</TABLE>
- ----------
* Less than 1%
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days upon the exercise of options or
warrants. Each beneficial owner's percentage ownership is determined by
assuming that options or warrants that are held by such person (but not
those held by any other person) and that are exercisable within 60 days
have been exercised. Unless otherwise noted, the Company believes that
all persons named in the table have sole voting and investment power
with respect to all shares of Common Stock beneficially owned by them.
(2) Based on Schedule 1 to that certain Waiver and Supplemental Agreement
(the "Supplemental Agreement"), dated as of April 14, 2000 by and
between the Company, and EGS Associates, L.P. ("EGS Associates"), EGS
Partners, L.L.C. ("EGS Partners"), Bev Partners, L.P. ("Bev Partners"),
Jonas Partners, L.P. ("Jonas Partners"), EGS Management, L.L.C. ("EGS
Management"), William Ehrman ("Ehrman"), Frederic Greenber,g
("Greenberg"), Jonas Gerstl ("Gerstl") and Julia Oliver ("Oliver")
(collectively, the "EGS Group"), filed as Exhibit 4.2 with the
Company's report on Form 8-K, filed with the Securities and Exchange
Commission on April 18, 2000.
14
<PAGE> 15
Consists of (i) 610,298 shares of Common Stock beneficially owned by
EGS Associates, (ii) 380,815 shares of Common Stock beneficially owned
by Bev Partners, (iii) 62,195 shares of Common Stock beneficially owned
by Jonas Partners, (iv) 6,100 shares of Common Stock beneficially owned
by EGS Overseas Fund ("EGS Overseas"), and (v) 100 shares of Common
Stock beneficially owned by Greenberg. In addition, by reason of the
provisions of Rule 13D-3 of the Securities Exchange Act of 1934, as
amended (the "Act"), (x) EGS Partners, L.L.C. ("EGS Partners") may be
deemed to own beneficially 2,696,729 shares of Common Stock purchased
for discretionary accounts managed by it, as to which EGS Partners
disclaims beneficial ownership, and (y) each of Ehrman, Greenberg,
Gerstl and Oliver (collectively, the "General Partners"), since each of
the General Partners, is a general partner of each of EGS Associates,
Bev Partners and Jonas Partners and a member of EGS Partners may be
deemed to own the 610,298 shares beneficially owned by EGS Associates,
the 2,696,729 shares that may be deemed to be beneficially owned by EGS
Partners, the 380,815 shares beneficially owned by Bev Partners and the
62,195 shares beneficially owned by Jonas Partners, as to which the
General Partners disclaim beneficial ownership. Pursuant to the terms
of the Supplemental Agreement the EGS Group has agreed to vote at any
annual or special meeting of stockholders either (1) in favor of the
nominees or proposals of the Company's management or (2) in the same
proportion as the other holders of Common Stock vote on any proposal.
(3) Based on Amendment No. 3, dated February 8, 2000, to Schedule 13G.
Consists of 1,348,000 shares of Common Stock beneficially owned by
Luther King Capital Management, 12,500 shares of Common Stock
beneficially owned by Bryan King and 12, 500 shares of Common Stock
beneficially owned by Mason King.
(4) Based on Schedule 13G dated January 31, 2000.
(5) Includes (a) (i) 87,500 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$3.40 per share, (ii) 87,500 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$3.75 per share, (iii) 87,500 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$4.15 per share, (iv) 75,000 shares of Common Stock issuable upon
exercise of presently exercisable options to purchase Common Stock at
$7.25 per share, (v) 75,000 shares of Common Stock issuable upon
exercise of presently exercisable options to purchase Common Stock at
$8.00 per share, (vi) 75,000 shares of Common Stock issuable upon
exercise of presently exercisable options to purchase Common Stock at
$8.75 per share and (vii) 75,000 shares of Common Stock issuable upon
exercise of presently exercisable options to purchase Common Stock at
$9.50 per share granted pursuant to option agreements with the Company;
(b) 20,000 shares issuable upon exercise of presently exercisable
options to purchase Common Stock at $5.00 per share granted under the
1995 Stock Incentive Plan; and (c) (i) 16,667 shares issuable upon
exercise of presently exercisable options to purchase Common Stock at
$8.75 per share and (ii) 166,667 shares issuable upon exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share, granted under the 1998 Executive Incentive Compensation Plan.
The options which are exercisable to purchase 166,667 shares of Common
Stock at 9.00 per share are subject to approval by the Company's
stockholders of an amendment to the Company's 1998 Executive Incentive
Compensation Plan increasing the number of shares of Common Stock
available for issuance under such Plan. See "Executive Compensation."
(6) Includes (i) 1,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $6.125 per
share, (ii) 1,667 shares of Common Stock issuable upon the exercise of
options exercisable on July 30, 2000 to purchase Common Stock at
$6.125, (iii) 1,667 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $8.75,
(iv) 16,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $9.00,
granted under the Company's 1995 Non-Employee Director Stock Option
Plan. The options which are exercisable to purchase 16,667 shares of
Common Stock at 9.00 per share are subject to approval by the Company's
stockholders of an amendment to the Company's 1995 Non-Employee
Director Stock Option Plan increasing the number of shares of Common
Stock available for issuance under such Plan.
(7) Includes (a) 25,000 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $5.00 per
share granted under the Company's 1995 Stock Incentive Plan; (b) 10,000
shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $3.50 per share granted
under the Company's 1995 Non-Employee Director Stock Option Plan; (c)
50,000 shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $5.00 per share granted
under an option agreement with the Company; and (d) (i) 6,667 shares of
Common Stock issuable upon the exercise of presently exercisable
options to purchase Common Stock at $6.125 per share, (ii) 6,667 shares
of Common Stock issuable upon the exercise of options exercisable on
June 30, 2000 to purchase Common Stock at $6.125 per share, (iii) 6,667
shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $8.75 per share and
(iv) 36,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share granted under the Company's 1998 Executive Incentive Compensation
Plan. The options which are exercisable to purchase 36,667 shares of
Common Stock at 9.00 per share are subject to approval by the Company's
stockholders of an amendment to the Company's 1998 Executive Incentive
Compensation Plan increasing the number of shares of Common Stock
available for issuance under such Plan.
(8) Includes (a) 30,000 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $3.50 per
share granted under the Company's 1992 Stock Option Plan and (b) (i)
1,667 shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $6.125 per share, (ii)
1,667 shares of Common Stock issuable upon the exercise of options
exercisable on July 30, 2000 to purchase Common Stock at $6.125, (iii)
1,667 shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $8.75 and (iv) 16,667
shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $9.00, granted under
the Company's 1995 Non-Employee Director Stock Option Plan. The options
which are exercisable to purchase 16,667 shares of Common Stock at
$9.00 per share are subject to approval by the Company's stockholders
of an amendment to the Company's 1995 Non-Employee Director Stock
Option Plan increasing the number of shares of Common Stock available
for issuance under such Plan
(9) Includes (i) 50,000 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $4.81 per
share, (ii) 1,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $6.125 per
share, (iii) 1,667 shares of Common Stock issuable upon the exercise of
options exercisable on July 30, 2000 to purchase Common Stock at
$6.125, (iv) 1,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to
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<PAGE> 16
purchase Common Stock at $8.75 and (v) 16,667 shares of Common Stock
issuable upon the exercise of presently exercisable options to purchase
Common Stock at $9.00 granted under the Company's 1995 Non-Employee
Director Stock Option Plan. The options which are exercisable to
purchase 16,667 shares of Common Stock at $9.00 per share are subject
to approval by the Company's stockholders of an amendment to the
Company's 1995 Non-Employee Director Stock Option Plan increasing the
number of shares of Common Stock available for issuance under such Plan
(10) Includes (i) 50,000 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $4.19 per
share, (ii) 1,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $6.125 per
share, (iii) 1,667 shares of Common Stock issuable upon the exercise of
options exercisable on July 30, 2000 to purchase Common Stock at
$6.125, (iv) 1,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $8.75 and (v)
16,667 shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $9.00 granted under the
Company's 1995 Non-Employee Director Stock Option Plan. The options
which are exercisable to purchase 16,667 shares of Common Stock at
$9.00 per share are subject to approval by the Company's stockholders
of an amendment to the Company's 1995 Non-Employee Director Stock
Option Plan increasing the number of shares of Common Stock available
for issuance under such Plan
(11) Consists of (i) 50,000 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$3.50 per share, (ii) 1,667 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$6.125 per share, (iii) 1,667 shares of Common Stock issuable upon the
exercise of options exercisable on July 30, 2000 to purchase Common
Stock at $6.125, (iv) 1,667 shares of Common Stock issuable upon the
exercise of presently exercisable options to purchase Common Stock at
$8.75 and (v) 16,667 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $9.00
granted under the Company's 1995 Non-Employee Director Stock Option
Plan. The options which are exercisable to purchase 16,667 shares of
Common Stock at $9.00 per share are subject to approval by the
Company's stockholders of an amendment to the Company's 1995
Non-Employee Director Stock Option Plan increasing the number of shares
of Common Stock available for issuance under such Plan. Also includes
warrants to purchase 140,727 shares of Common Stock at $8.25 per share
owned by First London Securities Corporation. Mr. Nichols is President
and principal shareholder of First London Securities Corporation. See
"Certain Transactions."
(12) Includes (a) 10,000 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $3.65 per
share granted under an option agreement with the Company; (b) 15,000
shares of Common Stock issuable upon exercise of presently exercisable
options to purchase Common Stock at $5.00 per share granted under the
Company's 1995 Stock Incentive Plan; and (c) (i) 3,833 shares of Common
Stock issuable upon the exercise of presently exercisable options to
purchase Common Stock at $6.125 per share, (ii) 3,833 shares of Common
Stock issuable upon the exercise of options exercisable on June 30,
2000 to purchase Common Stock at $6.125 per share, (iii) 3,833 shares
of Common Stock issuable upon the exercise of presently exercisable
options to purchase Common Stock at $8.75 per share and (iv) 6,667
shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $9.00 per share granted
under the Company's 1998 Executive Incentive Compensation Plan. The
options which are exercisable to purchase 6,667 shares of Common Stock
at $9.00 per share are subject to approval by the Company's
stockholders of an amendment to the Company's 1998 Executive Incentive
Compensation Plan increasing the number of shares of Common Stock
available for issuance under such Plan.
(13) Includes (a)16,800 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $3.50 under
the Company's 1992 Stock Option Plan; (b) (i) 10,000 shares of Common
Stock issuable upon exercise of presently exercisable options to
purchase Common Stock at $3.50 per share, (ii) 10,000 shares of Common
Stock issuable upon exercise of presently exercisable options to
purchase Common Stock at $3.625, and (iii) 10,000 shares of Common
Stock issuable upon exercise of presently exercisable options to
purchase Common Stock at $5.00 per share granted under the Company's
1995 Stock Incentive Plan; and (c) (i) 2,667 shares of Common Stock
issuable upon the exercise of presently exercisable options to purchase
Common Stock at $6.125 per share, (ii) 2,667 shares of Common Stock
issuable upon the exercise of options exercisable on June 30, 2000 to
purchase Common Stock at $6.125 per share, (iii) 2,667 shares of Common
Stock issuable upon the exercise of presently exercisable options to
purchase Common Stock at $8.75 per share and (iv) 5,000 shares of
Common Stock issuable upon the exercise of presently exercisable
options to purchase Common Stock at $9.00 per share granted under the
Company's 1998 Executive Incentive Compensation Plan. The options which
are exercisable to purchase 5,000 shares of Common Stock at $9.00 per
share are subject to approval by the Company's stockholders of an
amendment to the Company's 1998 Executive Incentive Compensation Plan
increasing the number of shares of Common Stock available for issuance
under such Plan.
(14) Includes (a) 25,000 shares of Common Stock issuable upon the exercise
of presently exercisable options to purchase Common Stock at $5.00 per
share granted under the 1995 Stock Incentive Plan and (b) (i) 3,833
shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $6.125 per share, (ii)
3,833 of Common Stock issuable upon the exercise of options exercisable
on June 30, 2000 to purchase Common Stock at $6.125 per share, (iii)
3,833 shares of Common Stock issuable upon the exercise of presently
exercisable options to purchase Common Stock at $8.750 per share and
(iv) 6,667 shares of Common Stock issuable upon the exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share shares granted under the Company's 1998 Executive Incentive
Compensation Plan. The options which are exercisable to purchase 6,667
shares of Common Stock at $9.00 per share are subject to approval by
the Company's stockholders of an amendment to the Company's 1998
Executive Incentive Compensation Plan increasing the number of shares
of Common Stock available for issuance under such Plan.
(15) Includes 8,333 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $9.75 per
shares granted pursuant to the Company's 1998 Executive Incentive
Compensation Plan.
(16) Includes 16,667 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share granted pursuant to the Company's 1998 Executive Incentive
Compensation Plan. These options are subject to approval by the
Company's stockholders of an amendment to the Company's 1998 Executive
Incentive Compensation Plan increasing the number of shares of Common
Stock available for issuance under such Plan.
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<PAGE> 17
(17) Includes 16,667 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share granted under the Company's 1995 Non-Employee Director Stock
Option Plan. These options are subject to approval by the Company's
stockholders of an amendment to the Company's 1995 Non-Employee
Director Stock Option Plan increasing the number of shares of Common
Stock available for issuance under such Plan.
(18) Includes 16,667 shares of Common Stock issuable upon exercise of
presently exercisable options to purchase Common Stock at $9.00 per
share granted under the Company's 1995 Non-Employee Director Stock
Option Plan. These options are subject to approval by the Company's
stockholders of an amendment to the Company's 1995 Non-Employee
Director Stock Option Plan increasing the number of shares of Common
Stock available for issuance under such Plan.
(19) See notes (5) - (18) above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
First London Securities Corporation ("First London"), of which Douglas
Nichols, a director of the Company, is President and principal shareholder,
served as the exclusive placement agent for the Company's private placements
transactions consummated in September 1996, January 1997 and March 1999. As part
of the September 1996 private placement, First London received a $225,000
placement fee, a $45,000 nonaccountable expense fee and one-year warrants to
purchase 125,000 shares of Common Stock at an exercise price of $4.60 per share.
Such warrants were exercised on September 30, 1997. As part of the January 1997
private placement, First London received a $375,750 placement fee, a $75,150
nonaccountable expense fee and one-year warrants to purchase 167,000 shares of
Common Stock at an exercise price of $5.75 per share. Such warrants were
exercised in January 1998. As part of the March 1999 private placement, First
London received a total of $436,450 in placement fees and cost reimbursements
and one-year warrants to purchase 141,504 shares of Common Stock at an exercise
price of $10.125 per share. These warrants expired March 3, 2000 unexercised.
First London also served as the exclusive placement agent for the
Company's private placement of Series A Convertible Redeemable Preferred Stock
(the "Series A Preferred Stock") which had a final close in January 1999. As a
part of the private placement of the Series A Preferred Stock, First London
received a total of $822,700 in placement fees and cost reimbursements during
December 1998 and the first quarter of 1999 and two-year warrants to purchase
140,727 shares of Common Stock at an exercise price of $8.25 per share.
During 1997, the Company sold all the outstanding stock of its
wholly-owned subsidiary, Huron Distribution Services, to a company owned by Mr.
John Marino, Vice Chairman of the Board of Directors of the Company. The sale
price was approximately $50,000, which consisted of cash and 10,085 shares of
the Company's Common Stock valued at $44,629.
During 1997, the Company sold all the outstanding stock of its
wholly-owned subsidiary, Evansville Terminal Company, to a group of investors
including a company owned by Mr. John Marino. The sale price was approximately
$540,000, which consisted of cash, a short-term note, a $450,000 purchase money
mortgage bearing interest at 8% per annum with a maturity date of October 2002
and 8,502 shares of the Company's Common Stock valued at $50,000.
During 1997, the Company sold all the outstanding stock of its
wholly-owned subsidiary, Gettysburg Scenic Rail Tours, Inc. ("GSRT"), certain
railroad equipment and substantially all the assets of Gettysburg Railway
("GBR") to a company owned by Mr. John Marino. The sale price for GSRT and the
railroad equipment was $500,000, which consisted of cash and 62,602 shares
of the Company's Common Stock valued at $385,000. The sale price for
substantially all of the assets of GBR was $1.45 million, which consisted of
cash in the amount of $300,000, an $800,000 promissory note bearing interest at
8.5% per annum due June 30, 1998 and a $350,000 mortgage note bearing interest
at 8.5% per annum, which calls for monthly payments of $3,037, and has a
maturity date of June 30, 2003. The maturity date of the $800,000 promissory
note has been extended until June 2000.
In connection with Gary Marino's Employment Agreement with the
Company, Mr. Marino has been granted shares of common stock from time to time,
the consideration for which is a promissory note issued by Mr. Marino to the
Company. So long as Mr. Marino remains employed as an officer of the Company,
the note is forgiven and the stock is granted. Should Mr. Marino terminate his
employment with the Company he will still be granted the shares of Common Stock
but must pay whatever balance remains on the note at that time. See "Executive
Compensation".
As of December 31, 1999, $1.15 million of notes receivable from related
parties is included in notes receivable, less current portions on the
consolidated balance sheet.
The Company believes that the transactions described above were on
terms comparable to these which might have been obtained from unaffiliated
parties.
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SIGNATURE
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Company has duly caused this Amendment to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: April 28, 2000 RAILAMERICA, INC.
By: /s/ Gary O. Marino
---------------------------------------
Gary O. Marino, Chief Executive Officer
(Principal Financial Officer)
By: /s/ Larry W. Bush
---------------------------------------
Larry W. Bush, Controller
(Principal Accounting Officer)
In accordance with the Securities Exchange Act of 1934, this Amendment
has been signed below by the following persons on behalf of the Company in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Gary O. Marino Chairman, President, April 28, 2000
- ---------------------------------------- Chief Executive Officer and Director
Gary O. Marino
/s/ Donald D. Redfearn Chief Administrative Officer, Executive April 28, 2000
- ---------------------------------------- Vice President, Secretary and Director
Donald D. Redfearn
/s/ John H. Marino Director April 28, 2000
- ----------------------------------------
John H. Marino
/s/ Douglas R. Nichols Director April 28, 2000
- ----------------------------------------
Douglas R. Nichols
/s/ Richard Rampell Director April 28, 2000
- ----------------------------------------
Richard Rampell
/s/ Charles Swinburn Director April 28, 2000
- ----------------------------------------
Charles Swinburn
/s/ John M. Sullivan Director April 28, 2000
- ----------------------------------------
John M. Sullivan
/s/ Ferd. C. Meyer, Jr. Director April 28, 2000
- ----------------------------------------
Ferd. C. Meyer, Jr.
/s/ William G. Pagonis Director April 28, 2000
- ----------------------------------------
William G. Pagonis
</TABLE>
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