<PAGE> 1
SCHEDULE 14A
(RULE 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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Allied Holdings 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 Rule 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:
(5) Total fee paid:
[ ] 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> 2
ALLIED HOLDINGS, INC.
160 CLAIREMONT AVENUE, SUITE 200
DECATUR, GEORGIA 30030
ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 1998
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Allied Holdings, Inc.
(the "Company") in connection with the solicitation by the Board of Directors of
proxies to be used at the annual meeting of shareholders of the Company to be
held on May 27, 1998 at 10:00 a.m., local time, at the Conference Center,
Decatur Holiday Inn, 130 Clairemont Avenue, Decatur, Georgia 30030, and any
adjournments thereof. The enclosed proxy is revocable at any time before its
exercise. Revocation may be made (i) by written notice to the Secretary of the
Company, (ii) by attending the meeting and voting in person, or (iii) by filing
a subsequent proxy with the Secretary of the Company prior to or at the time of
the meeting.
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation of shareholders of record by mail, telephone, or personal
contact, arrangements will be made with brokerage houses to furnish proxy
materials to their principals, and the Company will reimburse them for their
mailing expenses. Custodians and fiduciaries will be supplied with proxy
materials to forward to beneficial owners of the no par value common stock of
the Company (the "Common Stock"). No remuneration will be paid directly or
indirectly for the solicitation of proxies.
An annual report to the shareholders, including financial statements for
the year ended December 31, 1997 is enclosed with this Proxy Statement.
VOTING AND OUTSTANDING STOCK
At the close of business on the record date, April 1, 1998 the Company had
outstanding and entitled to vote at the annual meeting 7,877,547 shares of
Common Stock. Each share of Common Stock is entitled to one vote and a majority
of shares voted shall constitute the affirmative act of the shareholders.
1. ELECTION OF DIRECTORS
In December 1997, the Board of Directors of the Company approved an
amendment to the Bylaws of the Company in order to increase the number of
members of the Board of Directors from nine to eleven. The Board of Directors
appointed Randall E. West and William P. Benton as members of the Board in order
to fill the resulting vacancies on the Board. The Board appointed Mr. West to
serve with the class of directors whose terms expire at the 1998 annual meeting
and Mr. Benton to serve with the class of directors whose terms expire at the
2000 annual meeting. The directors of the Company are divided into three
classes. Members of the three classes currently are as follows: (i) David G.
Bannister, A. Mitchell Poole, Jr., Robert J. Rutland, and William P. Benton;
(ii) Bernard O. De Wulf, Guy W. Rutland, III, and Robert R.
<PAGE> 3
Woodson; and (iii) Joseph W. Collier, Guy W. Rutland, IV, Berner F. Wilson, Jr.,
and Randall E. West.
The directors whose terms will expire at the 1998 annual meeting of
shareholders are Joseph W. Collier, Guy W. Rutland IV, Berner F. Wilson, Jr.,
and Randall E. West. Each of these directors have been nominated to stand for
reelection as directors to hold office until the 2001 annual meeting of
shareholders and until their successors are elected and qualified. In addition,
William P. Benton is required to stand for reelection for a term which will
expire at the 2000 annual meeting.
Should any one or more of these nominees become unable to serve for any
reason, or for good cause will not serve, which is not anticipated, the Board of
Directors may, unless the Board by resolution provides for a lessor number of
directors, designate substitute nominees, in which event the persons named in
the enclosed proxy will vote proxies that would otherwise be voted for all named
nominees for the election of such substitute nominee or nominees.
If a shareholder specifies a choice on the proxy, the shares of Common
Stock represented by the proxy will be voted for the nominees as specified. If
no specification is made and the power to vote the shares is not withheld, the
shares represented by the proxy will be voted "FOR" each nominee for director
named on the proxy.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" APPROVAL OF EACH OF THE PROPOSALS IN ORDER TO ELECT THE DIRECTORS FOR
THE TERMS SET FORTH ABOVE.
NOMINEES FOR ELECTION TO TERMS EXPIRING 2001 ANNUAL MEETING
- -----------------------------------------------------------
===============================================================================
JOSEPH W. COLLIER
Director Since 1995
Age 55
Mr. Collier was appointed as a director of the Company in December 1995. Mr.
Collier has been the President of Allied Automotive Group, Inc. since December
1995. Mr. Collier had been Executive Vice President of Marketing and Sales and
Senior Vice President of Allied Systems, Ltd. since 1991. Prior to joining the
Company in 1979, Mr. Collier served in management positions with Bowman
Transportation and also with the Federal Bureau of Investigation.
===============================================================================
2
<PAGE> 4
===============================================================================
GUY W. RUTLAND, IV
Director Since 1993
Age 34
Mr. Rutland has been Vice President of the Company since October 1993 and Senior
Vice President - Operations of Allied Automotive Group, Inc. since November
1997. Mr. Rutland was Vice President - Reengineering Core Team of Allied
Automotive Group, Inc., from November 1996 to November 1997. From January 1996
to November 1996 Mr. Rutland was Assistant Vice President of the Central and
Southeast Region of Operations for Allied Systems, Ltd. From March 1995 to
January 1996 Mr. Rutland was Assistant Vice President of the Central Division of
Operations for Allied Systems, Ltd. From June 1994 to March 1995, Mr. Rutland
was Assistant Vice President of the Eastern Division of Operations for Allied
Systems, Ltd. From 1993 to June 1994 Mr. Rutland was assigned to special
projects with an assignment in Industrial Relations/Labor Department and from
1988 to 1993, Mr. Rutland was Director of Performance Management.
===============================================================================
RANDALL E. WEST
Director Since 1997
Age 49
Mr. West was appointed as a director of the Company in December 1997. Mr. West
has been the President of Axis Group, Inc. since October 1997. Mr. West was
President of Ryder Automotive Carrier Services, Inc. from January 1996 to
October 1997 and Senior Vice President and General Manager of Ryder
International from 1993 to 1995.
===============================================================================
BERNER F. WILSON, JR.
Director Since 1993
Age 59
Mr. Wilson has been Vice President of the Company since October 1993 and Vice
Chairman of the Board of Directors and Secretary since December 1995. Prior to
October 1993, Mr. Wilson was an officer or Vice Chairman of several of the
Company's subsidiaries. Mr. Wilson joined the Company in 1974 and has held
various finance, administration, and operations positions.
===============================================================================
3
<PAGE> 5
NOMINEE FOR ELECTION TO TERM EXPIRING 2000 ANNUAL MEETING
- ---------------------------------------------------------
===============================================================================
WILLIAM P. BENTON
Director Since 1998
Age 74
Mr. Benton was appointed as a director of the Company in February 1998. Mr.
Benton has been an Executive Director with Ogilvy & Mather, an advertising
agency, since January 1997. Mr. Benton was the Vice Chairman of Wells Rich
Greene/BDDP, an advertising agency, from September 1986 to January 1997. Mr.
Benton held numerous key executive positions with Ford Motor Company for more
than 37 years, including vice president and general manager of the Ford Division
and vice president and general manager of the Lincoln-Mercury Division. He was
also responsible for the operating companies that comprised the 15 Western
European countries during his Ford of Europe assignment. Mr. Benton's last
position with Ford was vice president of Marketing Worldwide. Mr. Benton is also
a Director of Speedway Motor Sports, Inc. and Sonic Automotive, Inc.
===============================================================================
INCUMBENT DIRECTORS - TERMS EXPIRING 2000 ANNUAL MEETING
- --------------------------------------------------------
===============================================================================
DAVID G. BANNISTER
Director Since 1993
Age 42
Mr. Bannister is a Managing Director in the Transportation Group of BT Alex.
Brown Incorporated and has been employed by that firm in various capacities
since 1983. Mr. Bannister is also a director of Landstar System, Inc.
===============================================================================
A. MITCHELL POOLE, JR.
Director Since 1990
Age 50
Mr. Poole has been President, Chief Operating Officer, Chief Financial Officer
and Assistant Secretary of the Company since December 1995. Prior to December
1995, Mr. Poole served as Executive Vice President and Chief Financial Officer
of the Company. Mr. Poole joined Allied Systems, Ltd. in 1988 as Senior Vice
President and Chief Financial Officer. He was appointed President of Allied
Industries Incorporated in December 1990 and served in that capacity until
December 1997. Prior to joining the Compan in 1988, Mr. Poole was an audit
partner with Arthur Andersen LLP, independent public accountants.
===============================================================================
4
<PAGE> 6
===============================================================================
ROBERT J. RUTLAND
Director Since 1965
Age 56
Mr. Rutland has been Chairman and Chief Executive Officer of the Company since
December 1995. Mr. Rutland served as President and Chief Executive Officer of
the Company from 1986 to December 1995. Prior to October 1993, Mr. Rutland was
Chief Executive Officer of each of the Company's subsidiaries. Mr. Rutland is a
member of the Board of Directors of Fidelity National Bank, a national banking
association.
===============================================================================
INCUMBENT DIRECTORS - TERMS EXPIRING 1999 ANNUAL MEETING
- --------------------------------------------------------
===============================================================================
BERNARD O. De WULF
Director Since 1993
Age 49
Mr. De Wulf has been Vice Chairman and an Executive Vice President of the
Company since October 1993. Prior to such time, Mr. De Wulf was Vice Chairman of
each of the Company's subsidiaries. Mr. De Wulf was Vice Chairman of Auto Convoy
Co. from 1983 until 1988 when the Company and Auto Convoy Co. became affiliated.
===============================================================================
GUY W. RUTLAND, III
Director Since 1964
Age 61
Mr. Rutland was elected Chairman Emeritus in December 1995. Mr. Rutland served
as Chairman of the Board of the Company from 1986 to December 1995. Prior to
October 1993, Mr. Rutland was Chairman or Vice Chairman of each of the Company's
subsidiaries.
===============================================================================
ROBERT R. WOODSON
Director Since 1993
Age 66
Mr. Woodson is a member of the Board of Directors of John H. Harland Company.
Mr. Woodson served as Chairman of John H. Harland Company from October 1995 to
April 1997. Mr. Woodson was also the President and Chief Executive Officer of
John H. Harland Company prior to October 1995. Mr. Woodson also serves as a
director of Haverty Furniture Companies, Inc.
===============================================================================
5
<PAGE> 7
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
All directors have served continuously since their first election or
appointment. Robert J. Rutland and Guy W. Rutland, III are brothers. Guy W.
Rutland, IV is the son of Guy W. Rutland, III. The Board of Directors held four
meetings during 1997. Each director attended at least 75% of the meetings of the
Board of Directors and the meetings of committees of which he was a member. The
Board of Directors has two standing committees. Certain information regarding
the function of the Board's committees, their present membership, and the number
of meetings held by each committee during 1997 is presented below.
AUDIT COMMITTEE
The Audit Committee annually reviews and recommends to the Board of
Directors the certified public accounting firm to be engaged as independent
auditors of the Company for the next calendar year, reviews the plans and
results of the audit engagement with the independent auditors, inquires as to
the adequacy of the Company's internal accounting controls, and considers each
professional service provided by the independent auditors and whether the
providing of such service impairs the independence of the auditors. The members
of the Audit Committee are David G. Bannister, Robert R. Woodson, and William P.
Benton. A. Mitchell Poole, Jr. served on the Audit Committee until his
resignation from the Audit Committee in January 1998. During 1997, the Audit
Committee held two meetings.
COMPENSATION COMMITTEE
The Compensation Committee periodically reviews the compensation and
other benefits provided to officers of the Company and advises the Board of
Directors with respect to compensation for the officers of the Company. The
members of the Compensation Committee are David G. Bannister, Robert R. Woodson
and William P. Benton. During 1997, the Compensation Committee held three
meetings.
COMPENSATION OF DIRECTORS
For the year ended December 31, 1997, each director of the Company who
was not also an employee received an annual fee of $12,000 and a fee of $2,000
for each meeting of the Board attended, plus reimbursement of expenses incurred
in attending meetings. No additional fee is paid for committee meetings held the
same day as Board meetings.
6
<PAGE> 8
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information about beneficial
ownership of the Common Stock as of April 1, 1998 by (i) each director and
executive officer of the Company named herein, and (ii) all directors and
executive officers of the Company as a group. Unless otherwise indicated, the
beneficial owners of the Common Stock listed below have sole voting and
investment power with respect to all shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
Number of Shares Percentage of Shares
Beneficial Owner Beneficially Owned Outstanding
- ----------------- ------------------ --------------------
<S> <C> <C>
Robert J. Rutland(1) 1,232,147 15.6
Guy W. Rutland, III(2) 844,248 10.7
Bernard O. De Wulf(3) 542,342 6.9
Guy W. Rutland, IV(4) 687,709 8.7
A. Mitchell Poole, Jr(5) 180,682 2.3
Berner F. Wilson, Jr.(6) 149,516 1.9
Joseph W. Collier(7) 15,838 *
David G. Bannister 3,000 *
Robert R. Woodson 4,000 *
Randall E. West(8) 8,903 *
William P. Benton -0- *
-------------
All executive officers and directors as
a group(9) (13 persons) 3,698,354 47.0
</TABLE>
- ------------------------
*Less than 1% not applicable
(1) Includes 18,099 shares owned by his wife to which he disclaims
beneficial ownership and 41,128 shares owned by him under the
Restricted Stock Plan.
(2) Includes 18,099 shares owned by his wife and 67,800 shares owned by a
private foundation to which he disclaims beneficial ownership and 1,697
shares owned by him under the Restricted Stock Plan.
(3) Includes 182,050 shares held in trust for the benefit of his wife and
family members and 3,293 shares owned by him under the Restricted Stock
Plan.
(4) Includes 687,311 shares held in a general partnership of which he is
indirectly the beneficiary. Includes 398 shares owned by him under the
Restricted Stock Plan.
(5) Includes 29,032 shares owned by him under the Restricted Stock Plan.
(6) Includes 1,996 shares owned by him under the Restricted Stock Plan.
(7) Includes 14,838 shares owned by him under the Restricted Stock Plan.
Does not include options to acquire 50,750 shares.
(8) Does not include options to acquire 10,000 shares. Includes 3,903
shares owned by him under the Restricted Stock Plan.
(9) Includes 95,423 shares issued under the Restricted Stock Plan. Does not
include options to acquire 68,550 shares.
7
<PAGE> 9
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information about beneficial
ownership of each person known to the Company to own more than 5% of the
outstanding common stock as of April 1, 1998, other than directors of the
Company.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percentage of Shares
Beneficial Owner Beneficially Owned Outstanding
- ------------------- ------------------ --------------------
<S> <C> <C>
J. P. Morgan & Co. Incorporated(1) 477,300 6.1
60 Wall Street
New York, New York 10260
HLM Management Co. Inc.(2) 401,300 5.1
222 Berkeley Street
Boston, Massachusetts 02116
</TABLE>
(1) According to a Schedule 13G dated December 31, 1997, filed on behalf of
J. P. Morgan & Co. Incorporated.
(2) According to a Schedule 13G dated February 18, 1998 filed on behalf of
HLM Management Co. Inc.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board, which was formed in
December 1993, reviews, administers and monitors the Company's executive
compensation plans, policies and programs.
EXECUTIVE COMPENSATION COMPONENTS
The executive compensation philosophy of the Company is to link
compensation with enhancement of shareholder value. The Company's executive
compensation is based on three principal components, each of which is intended
to support the overall compensation philosophy. The three principal components
are:
Base Salary. Base salary amounts for each of the named executive
officers are specified in their employment agreements. During December 1997, the
Compensation Committee approved amendments to the employment agreements with
Messrs. Robert Rutland, Poole and Collier to increase their base pay to the
amounts set forth in this Proxy Statement.
Incentive Compensation. In January 1997, the Compensation Committee
approved amendments to the employment agreements with the named executive
officers to allow them to participate in the Company's EVA Based Incentive Plan
("Incentive Plan"). Beginning in 1997, incentive compensation for the named
executive officers was paid in accordance with the Incentive Plan. Economic
Value Added ("EVA") and the Incentive Plan are discussed in detail below.
8
<PAGE> 10
Stock Compensation. Executive officers are eligible to receive
annual grants of incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, performance units and performance shares
under the Company's Long-Term Incentive Plan (the "LTI Plan"). During 1997, no
such awards were granted.
EVA AND THE INCENTIVE PLAN
The primary objective of the Company in regard to executive
compensation is to link compensation with shareholder value. The Company has
adopted a formalized approach to measuring value creation through the EVA
framework. The Company together with Stern Stewart & Co., the financial advisory
firm that pioneered the EVA framework, undertook a five-month project during
1996 to create and install an EVA based performance measurement and incentive
compensation system. The proprietary EVA financial measure can be defined as net
operating profits after tax ("NOPAT"), less a capital charge for the average
operating capital employed. NOPAT is a measure of operating results which
differs from normal accounting profit due to the adjustment for certain
non-economic charges. The Company believes that EVA more accurately measures
shareholder value created than traditional performance measures such as return
on assets, earnings per share and return on equity.
EVA provides a framework that enables management to make decisions
designed to build long-term value for the Company and its shareholders rather
than focus on short-term results. In 1997, EVA was the measure used to determine
incentive compensation for senior management.
CEO COMPENSATION
The Compensation Committee believes that Robert J. Rutland's
compensation as Chief Executive Officer appropriately relates to short and long
term performance. Mr. Rutland's compensation in 1997 was $440,049 as provided by
his employment agreement. Additionally, Mr. Rutland was paid a bonus in an
amount equal to $304,444 for 1997 which was calculated in accordance with a
formula set forth in the Incentive Plan. The Compensation Committee believes
that Mr. Rutland's employment agreement provides for appropriate compensation to
Mr. Rutland based upon the measures described above for determining executive
officer compensation. The Compensation Committee considers the compensation
received by Mr. Rutland to be comparable to chief executive officers of other
leading companies engaged in transportation.
<TABLE>
<S> <C> <C>
David G. Bannister Robert R. Woodson William P. Benton
</TABLE>
9
<PAGE> 11
SUMMARY COMPENSATION TABLE
Remuneration paid in 1997, 1996 and 1995 to executive officers is set
forth on the following table:
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Restricted Underlying
Other Annual Stock Options/SAR All Other
Name and Principal Position Year Salary Bonus Compensation(1) Awards(2) Awards(#) Compensation(3)
- ------------------------------- ------ -------- ------- --------------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Rutland 1997 $440,049 $304,444 $ 38,717 -- -- $ 18,426
Chairman and Chief 1996 427,000 121,620 -- $ 200,000 -- 13,667
Executive Officer 1995 424,493 143,180 -- -- -- 14,380
Bernard O. De Wulf 1997 330,037 121,778 -- -- -- 4,096
Vice Chairman and 1996 320,000 75,000 -- -- -- 3,917
Executive Vice President 1995 318,370 100,000 -- -- -- 5,217
A. Mitchell Poole, Jr 1997 298,700 200,633 30,973 -- -- 1,027
President and Chief 1996 290,000 121,620 -- 160,000 -- 991
Operating Officer 1995 265,302 143,180 -- -- -- 910
Berner F. Wilson, Jr 1997 200,000 110,694 -- -- -- 1,586
Vice Chairman and 1996 175,000 75,000 -- -- -- 1,565
Secretary 1995 159,179 100,000 -- -- -- 2,450
Joseph W. Collier 1997 200,000 119,276 15,487 -- -- --
President - Allied 1996 175,000 60,816 -- 80,000 -- --
Automotive Group, Inc. 1995 131,485 100,000 -- -- 50,000 --
</TABLE>
(1) Represents amounts paid for reimbursement of income tax liabilities
incurred due to the issuance of restricted stock awards.
(2) Represents dollar value of awards granted in 1996 based on the closing
market price on December 31, 1996. Under the Restricted Stock Plan,
restrictions lapse over a five year period, 20% per year, commencing on
the first anniversary of the date of grant. The aggregate restricted
stock holdings at the end of 1997 for Mr. Rutland were 25,000 shares
(value at December 31, 1997 equaled $478,125); for Mr. Poole, 20,000
shares (value at December 31, 1997 equaled $382,500); and for Mr.
Collier 10,000 shares (value at December 31, 1997 equaled $191,250).
(3) Unless otherwise noted, all amount in this column are insurance
premiums paid on behalf of the named executive officers.
10
<PAGE> 12
OPTION EXERCISE AND VALUES FOR LAST FISCAL YEAR
The following table sets forth as to each of the named executive
officers information with respect to option exercises during 1997 and the
status of their options on December 31, 1997 (i) the number of shares of
Common Stock underlying options exercised during 1997, (ii) the aggregate
dollar value realized upon the exercise of such options, (iii) the total
number of exercisable and non-exercisable stock options held on December 31,
1997 and (iv) the aggregate dollar value of in-the-money exercisable options
on December 31, 1997.
AGGREGATED OPTION EXERCISE DURING LAST FISCAL YEAR
AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Shares
Acquired Value
Upon Realized Value of Unexpected In-the-
Exercise of Upon Number of Unexercised Options Money Options at Fiscal
Option Exercise at Fiscal Year End Year End(1)
----------- -------- ----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Rutland -- -- -- -- -- --
Bernard O. De Wulf -- -- -- -- -- --
A. Mitchell Poole, Jr. -- -- -- -- -- --
Berner F. Wilson, Jr. -- -- -- -- -- --
Joseph W. Collier -- -- 20,750 30,000 191,557 279,390
</TABLE>
(1) In accordance with the S.E.C.'s rules, values are calculated by
subtracting the exercise price from the fair market value of the
underlying Common Stock. For purposes of this table, fair market value
is deemed to be $18.813, the average of the high and low Common Stock
price reported on The Nasdaq Stock Market on December 31, 1997.
EMPLOYMENT AND SEVERANCE AGREEMENTS
Messrs. Robert Rutland, De Wulf, Poole, Wilson and Collier have entered
into employment agreements with the Company. These agreements, which are
substantially similar, are for five year terms ending in January 2001 and
provide for compensation to the officers in the form of annual base salaries in
the amount of $500,000 for Robert Rutland, $340,395 for Mr. DeWulf, $400,000 for
Mr. Poole, $206,275 for Mr. Wilson, and $300,000 for Mr. Collier in 1998, plus
percentage annual increases based upon the Consumer Price Index in subsequent
years.
The employment agreements also provide that in the event of (i) an
officer's termination of employment by the Company other than for cause, (ii)
termination by the officer for reasons such as a material change by the Company
in the officer's duties and responsibilities or as a result of a merger or
consolidation of the Company, or (iii) the death or disability of the officer,
11
<PAGE> 13
the officer shall receive severance benefits from the Company. These severance
benefits include a cash payment in an amount equal to two times the annual base
salary plus the average of the previous two years' bonus payments for the
applicable officer. The severance benefits that would have been due pursuant to
the employment agreements effective January 1, 1998 are: $1,213,000 to Mr.
Rutland, $779,0000 to Mr. De Wulf, $961,000 to Mr. Poole, $505,000 to Mr.
Wilson, and $690,000 to Mr. Collier. The Company is also required to provide to
the officer group medical and hospitalization benefits and related benefits for
a period of one year.
LONG-TERM INCENTIVE PLAN
The Company's LTI Plan allows for the issuance of an aggregate of
650,000 shares of Common Stock. The LTI Plan authorizes the Company to grant
incentive stock options, non-qualified stock options, stock appreciation
rights, restricted stock, performance units and performance shares to eligible
employees as determined by the LTI Plan. The LTI Plan was adopted and approved
by the Board of Directors and shareholders in July 1993.
The Compensation Committee elects those employees to whom awards are
granted under the LTI Plan and determines the number of performance units,
performance shares, shares of restricted stock, and stock appreciation rights
granted pursuant to each award and prescribes the terms and conditions of each
such award.
Nonqualified Stock Option Plan
During 1997 the Company granted options to purchase 10,000 shares of
the Company's Common Stock at a price per share of $17.125. The options are
granted pursuant to the non-qualified stock option provisions set forth in the
LTI Plan and are not intended to qualify as incentive stock options within the
meaning of the Internal Revenue Code of 1986, as amended. A maximum of 300,000
shares may be issued as non-qualified options under the provisions of the LTI
Plan. Options granted become exercisable after one year in 20% or 33%
increments per year and expire ten years from the date of the grant. Options to
acquire 72,555 shares of Common Stock were exercisable at December 31, 1997.
Restricted Stock Plan
Effective December 19, 1996 the Company adopted the Allied Holdings,
Inc. Restricted Stock Plan ("Restricted Stock Plan") pursuant to authority
granted by the LTI Plan. The awards granted under the Restricted Stock Plan
vest over five years, 20% per year commencing on the first anniversary of the
date of grant. Effective December 19, 1996 the Company awarded an aggregate of
85,000 shares, with a value of $680,000 as of the date of grant. During 1997,
8,000 of the shares awarded under the Restricted Stock Plan were forfeited.
12
<PAGE> 14
STOCK APPRECIATION RIGHTS PLAN
The Board of Directors of the Company adopted the Allied Holdings,
Inc. Stock Appreciation Rights Plan effective January 1, 1997 (the "SAR Plan").
The purpose of the SAR Plan is to provide deferred compensation to certain
management employees of the Company. Such deferred compensation shall be based
upon the award of stock appreciation rights units, the value of which are
related to the appreciation in fair market value of the Common Stock. All
payments under the SAR Plan will be in cash. The Compensation Committee shall
determine the applicable terms for each award under the SAR Plan.
EVA BASED INCENTIVE PLAN
The Board of Directors of the Company adopted the Incentive Plan
effective January 1, 1997. The Incentive Plan's objectives are to focus on (i)
creating shareholder value and reward participants significantly when achieved,
and (ii) sustaining continuous performance improvement.
The Incentive Plan is administered by the Compensation Committee.
Under the Incentive Plan, incentive compensation will be directly linked to
changes in EVA. EVA is measured for each of the Company's major operating units
and rewards participants for increases in EVA and penalize such employees for
any decreases in EVA. Management employees designated as participants by the
Chairman and President of the Company and approved by the Compensation
Committee are eligible to participate in the Incentive Plan. Target bonus
amounts are determined for each participant by the Chairman and President and
approved by the Compensation Committee.
A participant's target bonus is either based solely on the performance
of the Company on a consolidated basis or on the performance of a subsidiary or
a business unit and the Company. For example, a target bonus might be based 75%
on a business unit or a subsidiary and 25% on the Company's consolidated
results.
Annually, an actual bonus is declared for each participant based on
the comparison of the change in EVA to the expected change in EVA. If the
change in EVA is exactly equal to the expected change in EVA, the actual bonus
will equal the target bonus. The actual bonus for any calendar year will be
higher than the target bonus if the change in EVA is higher than the expected
change in EVA and lower if the change in EVA is lower than the expected change
in EVA. Such adjustment shall be established by the Compensation Committee in
its sole discretion.
The actual bonus declared for each participant with respect to any
calendar year will be allocated to the participants' bonus bank, within 30 days
after the amount of the actual bonus for such year is determined. If, after the
allocation with respect to any calendar year, the balance in the participant's
bonus bank is less than or equal to the participant's target bonus for such
year, the entire amount in the bonus bank will be paid as soon as practicable
but in no event later than 15 days following such allocation. If the balance in
the bonus bank is greater than the target bonus, the participant will be paid
the target bonus plus one-third of the remainder of the bonus bank balance.
Amounts remaining in the bonus bank are carried forward to future years.
Negative bonuses may be declared if the change in EVA for any calendar year is
significantly below the expected change in EVA for such year and negative
bonuses declared will be
13
<PAGE> 15
subtracted from the bonus bank.
Ninety-five percent of the portion of the actual bonus payable to a
participant with respect to any calendar year is paid to the participants in
cash and 5% is paid in the form of stock appreciation rights, pursuant to the
SAR Plan.
RETIREMENT PLANS
The Company maintains a tax qualified benefit pension plan (the
"Retirement Plan"). The table set forth below illustrates the total combined
estimated annual benefits payable under the Retirement Plan to eligible
salaried employees for years of service assuming normal retirement at age 65.
Allied Defined Benefit Pension Plan
<TABLE>
<CAPTION>
Years of Service
-----------------
Remuneration 10 15 20 25 30 35
- ------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
100,000 20,000 30,000 40,000 50,000 50,000 50,000
125,000 25,000 37,500 50,000 62,500 62,500 62,500
150,000 30,000 45,000 60,000 75,000 75,000 75,000
175,000 32,000 48,000 64,000 80,000 80,000 80,000
200,000 32,000 48,000 64,000 80,000 80,000 80,000
225,000 32,000 48,000 64,000 80,000 80,000 80,000
250,000 32,000 48,000 64,000 80,000 80,000 80,000
275,000 32,000 48,000 64,000 80,000 80,000 80,000
300,000 32,000 48,000 64,000 80,000 80,000 80,000
</TABLE>
The Retirement Plan uses average compensation, as defined by the
Retirement Plan, paid to an employee by the plan sponsor during a plan year for
computing benefits. Compensation includes bonuses and any amount contributed by
a plan sponsor on behalf of an employee pursuant to a salary reduction
agreement which is not includable in the gross income of the employee under
Internal Revenue Code ("IRC") Sections 125, 402(a)(8), or 402(h). However,
compensation in excess of the IRC Section
401(a)(17) limit shall not be included. The limit for 1997 is $160,000.
The compensation covered by the Retirement Plan for Messrs. Robert
Rutland, De Wulf, Poole, Wilson, and Collier is $160,000.
14
<PAGE> 16
The estimated years of credited service for each of the current
executives as of December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Years of Credited Service
Name as of December 31, 1997
---- -------------------------
<S> <C>
Robert J. Rutland 33.7
Berner F. Wilson 23.0
Joseph W. Collier 18.0
Bernard O. De Wulf 14.0
A. Mitchell Poole, Jr. 9.7
</TABLE>
The benefits shown in the Pension Plan Table are payable in the form
of a straight life annuity commencing at age 65. There is no reduction for
social security benefits or other offset amounts.
CERTAIN TRANSACTIONS
Prior to December 31, 1997, the Company leased the space in the
building in which its headquarters is located from DELOS, a general partnership
of which Messrs. Rutland, III, Robert Rutland, and Wilson are beneficially the
sole general partners. The aggregate rents paid by the Company to DELOS in 1997
were $1,456,000. The Company provided loans to DELOS in the aggregate amount of
$573,419 which bear interest at the rate of 6% per annum. On December 31, 1997,
DELOS sold the building to an unrelated party and in January 1998, DELOS repaid
the Company the $573,419 loan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David G. Bannister, a director and member of the Audit and
Compensation Committees of the Company, is a Managing Director of BT Alex.
Brown Incorporated. During 1997 BT Alex. Brown Incorporated performed
investment banking services for the Company.
15
<PAGE> 17
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(stock price appreciation plus dividend) on the Company's Common Stock with the
cumulative total return of The Nasdaq Stock Market (U. S. Companies) and of the
Nasdaq Trucking and Transportation Companies for the period beginning September
30, 1993, the date on which the Common Stock was registered under the
Securities Exchange Act of 1934, as amended, through and including December 31,
1997.
<TABLE>
<CAPTION>
Research Data Group Peer Group Total Return Worksheet
Allied Hldgs Inc. (HAUL)
CUMULATIVE TOTAL RET
CUMULATIVE TOTAL RET
--------------------------------------------------------------------------------------------
9/30/93 12/31/93 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95 12/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Allied Hldgs Inc HAUL 100 155 136 109 106 86 77 63 57 62
NASDAQ STOCK MARKET (U.S.) 100 102 98 93 101 100 109 124 139 141
NASDAQ TRUCKING & TRANSPORTATION 100 106 106 98 101 96 101 110 113 112
<CAPTION>
Research Data Group Peer Group Total Return Worksheept
Allied Hldgs Inc (HAUL)
RN
----------------------------------------------------------------------------
3/31/96 6/30/96 9/30/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Allied Hldgs Inc HAUL 64 75 73 57 48 79 154 137
NASDAQ STOCK MARKET (U.S.) 148 160 165 173 164 193 227 213
NASDAQ TRUCKING & TRANSPORTATION 123 122 116 124 122 139 164 158
</TABLE>
16
<PAGE> 18
RELATIONSHIP WITH INDEPENDENT AUDITOR
The Board of Directors, upon the recommendation of the Audit
Committee, selected Arthur Andersen LLP as independent auditor for the Company
for the year ended December 31, 1997. The Company's auditor is selected for
each year prior to the commencement of the audit for that year and acts as
auditor for the Company for the period ending upon the selection of the auditor
for the following year. Arthur Andersen LLP has acted as independent auditor
for the Company since 1980.
The Company expects representatives of Arthur Andersen LLP to be
present at the annual meeting of shareholders and expects that they will have
the opportunity to make a statement if they desire to do so. It is further
anticipated that such representatives will be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Any proposal that a shareholder intends to present at the 1999 Annual
Meeting must be received at 160 Clairemont Avenue, Suite 200, Decatur, Georgia
30030 addressed to the attention of A. Mitchell Poole, Jr., President and Chief
Operating Officer, not later than December 19, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than
10% of the Common Stock, to file reports of ownership and changes in ownership
of the Common Stock with the Securities and Exchange Commission and The Nasdaq
Stock Market. Officers, directors and greater than 10% beneficial owners are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of the forms furnished to the
Company, the Company believes that during the 1997 fiscal year all filing
requirements applicable to its officers, directors and 10% shareholders were
complied with.
OTHER MATTERS
Action will be taken on whatever other matters may properly come
before the meeting. Management of the Company is not aware of any other
business matters to be considered at the annual meeting except the Report of
Management and presentation of financial statements. If any other matters
properly come before the meeting, the persons named in the enclosed Proxy will
have discretionary authority to vote all proxies with respect to such matters
and in accordance with the recommendations of management of the Company.
No director has informed the Company that he intends to oppose any
recommended action as specified in this Proxy Statement. With the exception of
election to office, no director or officer has a substantial interest in any
matter to be acted upon.
17
<PAGE> 19
Management of the Company urges you to sign and return the enclosed
Proxy promptly whether or not you expect to be present at the meeting. No
postage is necessary if mailed in the United States. IF YOU DO ATTEND, YOU MAY
THEN WITHDRAW YOUR PROXY.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO A. MITCHELL POOLE, JR., 160
CLAIREMONT AVENUE, SUITE 200, DECATUR, GEORGIA 30030, A COPY OF THE COMPANY'S
1997 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) WILL BE PROVIDED FREE OF
CHARGE. EXHIBITS TO FORM 10-K WILL BE PROVIDED UPON REQUEST AND PAYMENT OF
REASONABLE COST, IF ANY, OF REPRODUCTION AND DELIVERY.
18
<PAGE> 20
AHI47 F DETACH HERE APPENDIX
PROXY
ALLIED HOLDINGS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the notice of the annual
meeting of the shareholders of Allied Holdings, Inc. (the "Company") to be held
on May 27, 1998 at 10:00 a.m., local time, at the Conference Center, Decatur
Holiday Inn, 130 Clairemont Avenue, Decatur, Georgia 30030 ("Annual Meeting"),
and the Proxy Statement attached thereto, and does hereby appoint Robert J.
Rutland and A. Mitchell Poole, Jr., or either of them (with full power to act
alone), the true and lawful attorney(s) of the undersigned with power of
substitution, for and in the name of the undersigned, to represent and vote, as
designated below, all of the shares of no par value common stock of the Company
which the undersigned is entitled to vote at the Annual Meeting, or at any
adjournment or adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH NOMINEE
LISTED IN PROPOSAL NUMBER 1 AND UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING IN ACCORDANCE WITH THE BEST JUDGEMENT OF THE PROXY HOLDER.
THIS PROXY MAY BE REVOKED BY ATTENDING THE MEETING AND VOTING IN PERSON, OR BY
FILING A SUBSEQUENT PROXY WITH THE SECRETARY OF THE COMPANY PRIOR TO OR AT THE
TIME OF THE MEETING.
[SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE
SIDE] SIDE]
<PAGE> 21
AHI47 F DETACH HERE
[X]PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
<TABLE>
<S> <C>
1. Election of Directors. 2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the
A. FOR THREE-YEAR TERMS EXPIRING ANNUAL MEETING 2001: meeting or any adjournments thereof.
NOMINEES: Joseph W. Collier, Guy W. Rutland, IV,
Randall E. West, Berner F. Wilson, Jr.
B. FOR TWO-YEAR TERM EXPIRING ANNUAL MEETING 2000:
NOMINEE: William P. Benton
FOR ALL WITHHELD
NOMINEES, [ ] [ ] FROM
EXCEPT AS ALL
INDICATED BELOW NOMINEES
[ ]
-------------------------------------------------
Instructions: To withhold authority to vote for
any individual nominee(s) write that nominee's
name on the space provided above. MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
I hereby revoke all proxies by me heretofore given for any
meeting of the shareholders of the Company.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING
THE ENCLOSED POSTAGE PAID ENVELOPE.
Please sign your proxy exactly as your name appears at left.
When signing as an attorney, executor, administrator, trustee,
or guardian, give full title as such. If a corporation, please
sign in full corporate name by president or other authorized
officer. If a partnership, please sign in a partnership name by
authorized person. WHEN SHARES ARE HELD BY JOINT TENANTS, OR
IN THE NAME OF TWO OR MORE PERSONS, ALL SHOULD SIGN.
</TABLE>
<TABLE>
<S> <C>
Signature: Date: Signature: Date:
---------------------------- -------- ---------------------- --------
</TABLE>
