<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
[X]Filed by the Registrant
[_]Filed by a Party other than the Registrant
Check the appropriate box:
[_]Preliminary Proxy Statement
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11 or Rule 14a-12
METROTRANS CORPORATION
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_]$500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 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>
METROTRANS CORPORATION
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE>
METROTRANS CORPORATION
777 Greenbelt Parkway
Griffin, Georgia 30223
April 30, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders
of Metrotrans Corporation to be held at Suite 5300, 303 Peachtree Street,
Atlanta, Georgia, on June 8, 1999, at 10:00 a.m., local time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we also
will report on the operations of the Company during the past year and our
plans for the future. Directors and officers of the Company, as well as
representatives from the Company's independent accountants, Arthur Andersen
LLP, will be present to respond to appropriate questions from stockholders.
Please mark, date, sign and return your proxy card in the enclosed envelope
at your earliest convenience. This will assure that your shares will be
represented and voted at the meeting, even if you do not attend.
Sincerely,
/s/ Henry J. Murphy
---------------------------------
HENRY J. MURPHY
Interim Chief Executive Officer
<PAGE>
METROTRANS CORPORATION
777 Greenbelt Parkway
Griffin, Georgia 30223
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999
NOTICE HEREBY IS GIVEN that the 1999 Annual Meeting of Stockholders of
Metrotrans Corporation (the "Company") will be held at Suite 5300, 303
Peachtree Street, Atlanta, Georgia, on Tuesday, June 8, 1999, at 10:00 a.m.,
local time, for the purposes of considering and voting upon:
1. A proposal to elect three directors to serve until the 2000 Annual
Meeting of Stockholders; and
2. Such other business as properly may come before the Annual Meeting or
any adjournments thereof. The Board of Directors is not aware of any
other business to be presented to a vote of the stockholders at the
Annual Meeting.
Information relating to the above matters is set forth in the attached Proxy
Statement. Stockholders of record at the close of business on April 1, 1999,
are entitled to receive notice of and to vote at the Annual Meeting and any
adjournments thereof.
By Order of the Board of Directors
/s/ Henry J. Murphy
------------------------------------
HENRY J. MURPHY
Interim Chief Executive Officer
Griffin, Georgia
April 30, 1999
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE
AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE THE PROXY CARD AND VOTE IN
PERSON IF YOU SO DESIRE.
<PAGE>
METROTRANS CORPORATION
777 Greenbelt Parkway
Griffin, Georgia 30223
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999
This Proxy Statement is furnished to the stockholders of Metrotrans
Corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the 1999 Annual Meeting
of Stockholders and at any adjournments thereof (the "Annual Meeting"). The
Annual Meeting will be held at Suite 5300, 303 Peachtree Street, Atlanta,
Georgia, on Tuesday, June 8, 1999, at 10:00 a.m., local time.
The approximate date on which this Proxy Statement and form of proxy card
are first being sent or given to stockholders is May 6, 1999.
VOTING
General
The securities that can be voted at the Annual Meeting consist of Common
Stock of the Company, $.01 par value per share, with each share entitling its
owner to one vote on each matter submitted to the stockholders. The record
date for determining the holders of Common Stock who are entitled to receive
notice of and to vote at the Annual Meeting is April 1, 1999. On the record
date, 4,129,737 shares of Common Stock were outstanding and eligible to be
voted at the Annual Meeting.
Quorum and Vote Required
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock of the Company is necessary to constitute a quorum at the
Annual Meeting. In counting the votes to determine whether a quorum exists at
the Annual Meeting, the proposal receiving the greatest number of all votes
"for" or "against" and abstentions (including instructions to withhold
authority to vote) will be used.
In voting with regard to the proposal to elect directors, stockholders may
vote in favor of all nominees, withhold their votes as to all nominees or
withhold their votes as to specific nominees. The vote required to elect
directors is a plurality of the votes cast by the holders of shares entitled
to vote, provided a quorum is present. As a result, votes that are withheld
will not be counted and will have no effect.
Under the rules of the New York and American Stock Exchanges (the
"Exchanges") that govern most domestic stock brokerage firms, member brokerage
firms that hold shares in street name for beneficial owners may, to the extent
that such beneficial owners do not furnish voting instructions with respect to
any or all proposals submitted for stockholder action, vote in their
discretion upon proposals which are considered "discretionary" proposals under
the rules of these two stock exchanges. Member brokerage firms that have
received no instructions from their clients as to "non-discretionary"
proposals do not have discretion to vote on these proposals. Such "broker non-
votes" will not be considered in determining whether a quorum exists at the
Annual Meeting and will not be considered as votes cast in determining the
outcome of any proposal.
<PAGE>
On September 15, 1998, The Mayflower Corporation plc, a corporation
organized under the laws of the United Kingdom ("Mayflower"), purchased from
M. Earl Meck and Randolph B. Stanley, each of whom were non-management
directors of the Company, an aggregate of 1,650,400 shares (the "Shares") of
Common Stock of the Company pursuant to an Agreement dated as of August
21,1998 (the "Mayflower Agreement"), between Mayflower, Mayflower (U.S.
Holdings), Inc., the Company, D. Michael Walden, Terri B. Hobbs, M. Earl Meck
and Randolph B.Stanley. As a result of the transaction, Mayflower acquired
40.4% of the outstanding Common Stock of the Company. Pursuant to the
Mayflower Agreement, Mr. Meck and Mr. Stanley resigned as directors of the
Company effective as of September 15, 1998.
Pursuant to the Mayflower Agreement, Mayflower, Mr. Walden and Ms. Hobbs
agreed to vote their shares of Common Stock to maintain the composition and
membership of the Board of Directors of the Company as provided herein, and
Mayflower agreed to vote its shares of Common Stock in accordance with the
vote of the majority of the Board of Directors of the Company with respect to
all matters presented to a vote of the shareholders; provided that Mayflower
may vote its shares of Common Stock as it shall determine in connection with
certain matters set forth in the Mayflower Agreement, should any such matter
be presented to a vote of shareholders.
As of April 1, 1999 (the record date for the Annual Meeting), the directors
and executive officers of the Company owned or controlled approximately
869,150 shares of Common Stock of the Company, constituting approximately 21%
of the outstanding Common Stock. The Company believes that, if Mayflower
causes its shares to be voted in favor of the three nominees for director as
required by the Mayflower Agreement, the holders of more than a majority of
the Common Stock outstanding on the record date will vote all of their shares
of Common Stock in favor of the proposal to elect the three nominees as
directors and, therefore, that the presence of a quorum and the approval of
the proposal is reasonably assured.
Proxies
Stockholders should specify their choices with regard to the election of
directors on the enclosed proxy card. All properly executed proxy cards
delivered by stockholders to the Company in time to be voted at the Annual
Meeting and not revoked will be voted at the Annual Meeting in accordance with
the directions noted thereon. In the absence of such instructions, the shares
represented by a signed and dated proxy card will be voted "FOR" the election
of all director nominees. If any other matters properly come before the Annual
Meeting, the persons named as proxies will vote upon such matters according to
their judgment.
Any stockholder delivering a proxy has the power to revoke it at any time
before it is voted by giving written notice to the Secretary of the Company at
777 Greenbelt Parkway, Griffin, Georgia 30223, by executing and delivering to
the Secretary a proxy card bearing a later date or by voting in person at the
Annual Meeting; provided, however, that under the rules of the Exchanges any
beneficial owner of the Company's Common Stock whose shares are held in street
name by a member brokerage firm may revoke his proxy and vote his shares in
person at the Annual Meeting only in accordance with applicable rules and
procedures of the Exchanges.
In addition to soliciting proxies through the mail, the Company may solicit
proxies through its directors, officers and employees in person and by
telephone or facsimile. Brokerage firms, nominees, custodians and fiduciaries
also may be requested to forward proxy materials to the beneficial owners of
shares held of record by them. All expenses incurred in connection with the
solicitation of proxies will be borne by the Company.
2
<PAGE>
SHARE OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of April 1, 1999, (i) by each
person known to the Company to be the beneficial owner of more than 5% of the
Company's Common Stock, (ii) each director of the Company, (iii) each of the
executive officers of the Company named in the Summary Compensation Table
herein and (iv) all directors and executive officers of the Company as a
group, based in each case on information furnished to the Company by such
persons. The Company believes that each of the named individuals and group has
sole voting and investment power with regard to the shares shown except as
otherwise noted.
<TABLE>
<CAPTION>
Common Stock
Beneficially
Owned(1)
-----------------------
Number of Percent of
Name and Relationship to Company Shares Class
- -------------------------------- --------- ----------
<S> <C> <C>
The Mayflower Corporation plc (2)...................... 1,650,400 40%
Principal Stockholder
D. Michael Walden (3).................................. 849,700(4) 20.4%
Chairman of the Board and
Principal Stockholder
Patrick L. Flinn....................................... 5,000(4) *
Director
William C. Pitt III.................................... 7,667(4) *
Director
Terri B. Hobbs......................................... 68,450(4) 1.6%
Acting President
Jerry J. Schweiner..................................... 0 *
Former President and Chief Executive Officer (5)
Richard M. Bruno....................................... 0 *
Former Chief Financial Officer (6)
All current directors and executive officers
as a group (5 persons)................................ 930,817(7) 22%
</TABLE>
- --------
* Less than one percent.
(1) Beneficial ownership as reported in this Proxy Statement has been
determined in accordance with Securities and Exchange Commission
regulations and includes shares of Common Stock of the Company that may be
acquired within 60 days of April 1, 1999 upon the exercise of outstanding
stock options.
(2) The shares are owned beneficially by The Mayflower Corporation plc
("Mayflower"). Mayflower's address is Mayflower House, London Road,
Loudwater, High Wycombe, Buckinghamshire HP10 9RF.
(3) Mr. Walden's address is 777 Greenbelt Parkway, Griffin, Georgia 30223.
(4) With regard to Mr. Walden, the shares shown include 24,500 shares issuable
upon exercise of outstanding stock options; with regard to Ms. Hobbs, the
shares shown include 24,500 shares issuable upon exercise of outstanding
stock options, 7,500 restricted shares that are subject to forfeiture
under certain circumstances and 450 shares owned by her spouse; with
regard to Mr. Flinn, the shares represent 5,000 shares issuable upon
exercise of outstanding stock options; and with regard to Mr. Pitt, the
shares represent 7,667 shares issuable upon exercise of outstanding stock
options.
(5) Mr. Schweiner served as Chief Operating Officer from April 1998 until
November 1998.
(6) Mr. Bruno resigned as Chief Financial Officer in September 1998.
(7) The shares shown include 61,667 shares that may be acquired by certain
directors and executive officers upon exercise of stock options; 7,500
restricted shares owned by an executive officer that are subject to
forfeiture under certain circumstances; and 450 shares owned by the spouse
of an executive officer.
3
<PAGE>
ELECTION OF DIRECTORS
Nominees
The Mayflower Agreement provided, among other things, that the Board of
Directors of the Company would be expanded from six to eight directors
consisting of five directors selected by the current directors of the Company
(the "Board Designated Directors") and, so long as Mayflower is not in breach
of the Mayflower Agreement, three directors nominated by Mayflower. The Board
of Directors amended the Bylaws to fix the number of directors at eight;
however, the election of new directors did not occur in 1998 because Mayflower
did not designate any nominees for election as directors as provided in the
Mayflower Agreement. Further, the Company believes that Mayflower is in breach
of the Mayflower Agreement. The three nominees for director consist only of
Board Designated Directors. The current directors have not identified the
remaining two Board Designated Directors. The Board of Directors may allow the
vacancies to remain open until a suitable candidate or candidates are located,
elect new directors pursuant to the provisions of the Mayflower Agreement, or
amend the Bylaws to provide for a lesser number of directors.
The Board of Directors has set the authorized number of directors of the
Company at three and has nominated Patrick L. Flinn, William C. Pitt III, and
D. Michael Walden for re-election as directors at the 1999 Annual Meeting.
Each of the nominees is currently a director of the Company. If re-elected as
directors at the Annual Meeting, each of such persons would serve a one year
term expiring at the 2000 Annual Meeting of Stockholders.
Each of the nominees has consented to serve another term as a director if
re-elected. If any of the nominees should be unavailable to serve for any
reason (which is not anticipated), the Board of Directors may designate a
substitute nominee or nominees (in which event the persons named on the
enclosed proxy card will vote the shares represented by all valid proxy cards
for the election of such substitute nominee or nominees), allow the vacancies
to remain open until a suitable candidate or candidates are located, or by
resolution provide for a lesser number of directors.
Pursuant to the Mayflower Agreement, Mayflower, Mr. Walden and Ms. Hobbs
have agreed to vote their shares of Common Stock to maintain the composition
and membership of the Board of Directors of the Company as provided herein.
The Board of Directors unanimously recommends that the stockholders vote
"FOR" the proposal to elect Patrick L. Flinn, William C. Pitt III, and D.
Michael Walden as directors for a one year term expiring at the 2000 Annual
Meeting of Stockholders and until their successors have been duly elected and
qualified.
Information Regarding Nominees for Director
Set forth below is certain information regarding the three nominees for
director, including their ages and principal occupations. Unless otherwise
indicated, the information is as of December 31, 1998.
Patrick L. Flinn has been a director of the Company since March 1996. He was
a director and the Chief Executive Officer of BankSouth Corporation and
BankSouth, N.A. from August 1991, and Chairman of the Board from January 1992
until the sale of such entities in February 1996. Prior to that time, Mr.
Flinn was Group Executive Vice President of Real Estate and Mortgage Banking
at C&S/Sovran. He was employed in various capacities at C&S/Sovran since
joining its management training program in 1966. Mr. Flinn is currently a
director of IRT Property Company. Mr. Flinn is 56.
William C. Pitt III has been a director of the Company since June 1994.
Since March 1992, Mr. Pitt has engaged in hotel-resort consulting activities.
From 1990 to February 1992, Mr. Pitt was President of Guinness Enterprises
Holdings, Inc., a subsidiary of Guinness, PLC, London, England, which is
engaged in the leisure and
4
<PAGE>
resort business in the United States. From 1976 through 1990, Mr. Pitt was
employed by CSX Resorts, Inc. in a variety of management positions, including
President and Chief Executive Officer. Mr. Pitt is a member of the Board of
Directors of United Bancshares, Inc., Charleston, West Virginia. He is 54.
D. Michael Walden has served as Chairman of the Board of the Company since
its incorporation in 1982. He served as Chief Executive Officer of the Company
from 1982 until March 1999, when he began a medical leave of absence as an
officer of the Company for an indefinite period of time. Mr. Walden also
served as President of the Company from its incorporation in 1982 until April
1998. Mr. Walden is 48.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the full
Board and through committees of the Board. In accordance with the Bylaws of
the Company, the Board of Directors has established an Audit Committee and a
Compensation Committee.
The Company formed an Executive Committee in March 1999. The Executive
Committee is empowered to exercise the full extent of the Board of Director's
authority consistent with Georgia law and the Company's Articles of
Incorporation and Bylaws. The Executive Committee is composed of Patrick L.
Flinn and William C. Pitt III.
The Audit Committee makes recommendations to the Board concerning the
appointment of the Company's independent accountants; reviews with such
accountants their audit plan, the scope and results of their audit engagement
and the accompanying management letter, if any; reviews the scope and results
of the Company's internal auditing procedures; consults with the independent
accountants and management with regard to the Company's accounting methods and
the adequacy of its internal accounting controls; approves professional
services provided by the independent accountants; reviews the independence of
the independent accountants; and reviews the range of the independent
accountants' audit and non-audit fees. The Audit Committee is composed of
Patrick L. Flinn and William C. Pitt III. The Audit Committee met two times
during 1998.
The Compensation Committee is responsible for setting the compensation of
the Chairman of the Board, President and Chief Executive Officer and reviewing
his recommendations regarding the compensation of the Company's other
executive officers. The Compensation Committee is composed of Patrick L. Flinn
and William C. Pitt III. The Compensation Committee met one time during 1998.
The Board of Directors as a whole functions as the nominating committee to
select management's nominees for election as directors of the Company. The
Board of Directors will consider stockholders' recommendations for nominees
for election as directors at the Company's 2000 Annual Meeting of Stockholders
if submitted to the Company on or before January 4, 2000. See "Stockholder
Proposals for 2000 Annual Meeting" below. For additional information on the
nomination of directors see "Election of Directors--Nominees" above.
During 1998, the full Board of Directors held six meetings. All of the
directors attended all of the meetings of the Board and the Committees on
which they served held during 1998.
Director Compensation
Nonemployee directors of the Company are paid an annual retainer fee of
$5,000 plus a fee of $1,250 for attendance at each meeting of the Board of
Directors or committee thereof. Directors who are employees of the Company
receive no directors fees. All directors are reimbursed for their reasonable
expenses in connection with the performance of their duties.
The Company's non-employee directors are eligible to participate in the
Company's 1994 Directors Stock Incentive Plan (the "DSIP"). Pursuant to the
DSIP, as of the first date (the "initial grant date") on which an individual
(A) begins to serve a term as a director of the Company and (B) is an eligible
individual, the individual
5
<PAGE>
is granted an option to purchase 5,000 shares of Company Common Stock. One-
third of the options vest on the first anniversary of the initial grant date
and one-third vest on each anniversary thereafter provided the option holder
is still a director on such date. As of a date (a "subsequent grant date") on
which an eligible director begins to serve another term as a director of the
Company after having completed three complete terms as a director of the
Company after such individual's initial grant date or any subsequent grant
date, such director is granted an option to purchase an additional 5,000
shares of Company Common Stock. The purchase price of the Company Common Stock
underlying each option granted under the DSIP is equal to the fair market
value of the Company Common Stock on the date the option is granted.
EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth, for the fiscal years ended December 31,
1998, 1997 and 1996, the total compensation earned by the Company's executive
officers whose total compensation for 1998 exceeded $100,000. For information
regarding the various factors considered by the Compensation Committee of the
Board of Directors in determining the compensation of the Chief Executive
Officer and, generally, the other executive officers of the Company, see
"Compensation Committee Report on Executive Compensation" below.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
-------------------------------- ---------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Position Year Salary Bonus Compensation Awards($) Options(#) Compensation
----------------- ---- -------- ------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. Michael Walden...... 1998 $252,885 $ -- $3,451(1) $-- -- $ --
Chairman of the Board 1997 150,000 -- 4,618(1) -- 8,000 --
1996 150,000 -- 4,677(1) -- 15,000 --
Terri B. Hobbs......... 1998 $199,471(2) $ -- $2,811(1) $-- -- $ --
Acting President 1997 189,660(2) -- 2,616(1) -- 8,000 --
1996 134,285(2) -- 5,025(1) -- 15,000 --
Jerry J. Schweiner..... 1998 $144,231 $ -- $4,015(1) $-- -- $25,000(3)
Former President and
Chief Operating
Officer
Richard M. Bruno (4)... 1998 $ 97,827 $10,000 $1,184(1) $-- -- $ --
Former Chief Financial 1997 106,000 -- 3,758(1) -- 8,000 --
Officer 1996 103,461 -- 2,889(1) -- 15,000 --
</TABLE>
- --------
(1) Includes personal use of a Company automobile.
(2) With respect to 1998, the amount includes a base salary of $159,446 and
the balance represents commissions earned on the sale of vehicles. With
respect to 1997 and 1996, the amount includes a base salary of $22,360 and
the balance represents commissions earned on the sale of vehicles.
(3) Amount indicated consists of moving expenses and a signing bonus. Mr.
Schweiner served as President and Chief Operating Officer from April 1998
until November 1998.
(4) Mr. Bruno resigned as Chief Financial Officer in September 1998.
The Company's executive officers also participate in the Company's 1994
Employees Stock Incentive Plan. See "Employees Stock Incentive Plan" below.
Employment Agreements
Each of D. Michael Walden, Terri B. Hobbs and Jerry J. Schweiner (who
resigned as President and Chief Operating Officer in November 1998) entered
into a written employment agreement with the Company (collectively, the
"Employment Agreements"). Pursuant to his Employment Agreement, Mr. Walden is
employed as the Chairman of the Board and Chief Executive Officer of the
Company; however, Mr. Walden
6
<PAGE>
began a medical leave of absence as Chief Executive Officer of the Company in
March 1999. Pursuant to her Employment Agreement, Ms. Hobbs is employed as the
Deputy Chief Executive Officer of the Company. She has been Acting President
of the Company since March 1999.
Currently, Mr. Walden and Ms. Hobbs receive annual base salaries of $250,000
and $200,000, respectively. In addition, they are entitled to participate in
all of the Company's employee benefit plans and programs. The Employment
Agreements with Mr. Walden and Ms. Hobbs provide for a term of employment for
until such time as the Company provides notice of termination at least two
years and 11 months prior to termination, or Mr. Walden or Ms. Hobbs provide
notice of termination at least six months prior to termination (unless such
notice is waived by the other party in writing). The term previously stated
notwithstanding, the respective Employment Agreement terminates automatically
upon the occurrence of any of the following: (a) the death of the employee;
(b) the complete disability of the employee ("complete disability" means the
inability of the employee, due to illness, accident or any other physical or
mental incapacity to perform the services provided for under the respective
Employment Agreement for an aggregate of 60 days within any period of 120
consecutive days during the term of the Employment Agreement); or (c) the
discharge of the employee by the Company for cause (as defined in the
Employment Agreements).
Pursuant to Mr. Walden's and Ms. Hobbs' Employment Agreements, in the event
that the Company constructively discharges Mr. Walden or Ms. Hobbs on and
after the date of a change in control of the Company, Mr. Walden or Ms. Hobbs,
as the case may be, will be entitled to give notice within 30 days of such
constructive discharge, that he or she desires to terminate employment with
the Company as noted above, except that such termination will not actually
occur for a period of two years and 11 months following the date the employee
gives notice, and during the interim period, the employee shall not be
responsible for any duties other than certain duties specified in the
respective Employment Agreement. "Change in control" means the acquisition by
a person or entity of a sufficient number of shares of the Common Stock, or
securities convertible into the Common Stock, and whether through direct
acquisition of shares or by merger, consolidation, share exchange,
reclassification of securities or recapitalization of or involving the Company
or any parent or subsidiary of the Company, to constitute the person or entity
the actual or beneficial owner of 30% or more of the Common Stock of the
Company. "Constructive discharge" means any action by the Company which
results in (i) a breach of the Employment Agreement, (ii) a reduction in the
pension, welfare or fringe benefits provided to the employee which is both
significant and substantial when expressed as a dollar amount or when
expressed as a percentage of the individual's dollar compensation, and (iii)
the transfer of the employee's site of employment to a location which is
further than 50 miles from the current site of the employee's employment.
Pursuant to his Employment Agreement, Mr. Schweiner was employed as
President and Chief Operating Officer of the Company; however, his Employment
Agreement was terminated in November 1998. Mr. Schweiner's annual base salary
was $250,000 and he was also provided with an automobile.
Employees Stock Incentive Plan
On March 14, 1994, the Board of Directors and shareholders of the Company
adopted the Metrotrans Corporation 1994 Employees Stock Incentive Plan (the
"ESIP"). Incentive stock options nonqualified stock options, reload options
and restricted stock awards may be granted under the ESIP (collectively, "ESIP
Stock Rights"). Under the terms of the ESIP, all employees of the Company (and
any parent or subsidiary corporations), including such employees who are also
members of the Board of Directors of the Company (or of the board of directors
of a subsidiary corporation), are eligible for consideration for the granting
of ESIP Stock Rights. The ESIP is intended to further the growth and
development of the Company by allowing certain employees of the Company (or
any parent or subsidiary companies) to obtain a proprietary interest in the
Company through the grant or purchase of Company Common Stock. The Company
believes that the ESIP will aid in attracting and retaining such individuals
and in stimulating the efforts of such individuals for the success of the
Company.
7
<PAGE>
The ESIP is administered by the Compensation Committee of the Board of
Directors of the Company. The members of the Compensation Committee cannot
participate in the ESIP, must be "disinterested persons" within the meaning of
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and must be "outside directors" within the meaning of Section
162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as amended (the "Code").
The Compensation Committee has authority to (i) determine the individuals to
whom ESIP Stock Rights will be granted from among those individuals who are
eligible, as well as the terms of ESIP Stock Rights and the number of shares
of Common Stock covered by such ESIP Stock Rights, (ii) determine the exercise
price and other terms of the ESIP and (iii) interpret the provisions of, and
prescribe, amend and rescind any rules and regulations relating to, the ESIP.
Option Grants
The Company did not grant any options in calendar year 1998.
Option Exercises
The following table sets forth the number of shares of Common Stock acquired
upon the exercise of options by the executive officers named in the Summary
Compensation Table above during the fiscal year ended December 31, 1998,
including the aggregate value of gains on the date of exercise. The table also
sets forth (i) the number of shares covered by unexercised options (both
exercisable and unexercisable) as of December 31, 1998, and (ii) the
respective value of "in-the-money" options, which represents the positive
spread between the exercise price of existing options and the fair market
value of the Company's Common Stock at December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
Fiscal Year-End
---------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Exercises During Year Fiscal Year-End (#) at Fiscal Year-End ($)
-------------------------- ------------------------- -------------------------
Shares Acquired Value
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ --------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. Michael Walden....... -- -- 20,750 17,250 -- --
Terri B. Hobbs.......... -- -- 20,750 17,250 -- --
Jerry J. Schweiner...... -- -- -- -- -- --
Richard M. Bruno........ 12,700 $13,737(1) -- 55,000 -- --
</TABLE>
- --------
(1) Calculated based upon the closing sale price per share of the Common Stock
as quoted on the Nasdaq National Market on the dates of exercise.
Compensation Committee Report on Executive Compensation
This report by the Compensation Committee of the Board of Directors
discusses the Committee's compensation objectives and policies applicable to
the Company's executive officers. The report specifically reviews the
Committee's methods for establishing the compensation during 1998 of D.
Michael Walden, who served as the Company's Chairman of the Board and Chief
Executive Officer during 1998, and generally with respect to all executive
officers. The Committee is composed entirely of non-employee directors.
The Company's compensation programs for its executive officers are intended
to create a direct relationship between the compensation paid to executives
and the Company's performance. The Committee believes that this relationship
is best implemented by providing a compensation package consisting of a base
salary and an incentive bonus tied to Company earnings and designed to promote
the Company's overall performance.
8
<PAGE>
Base Salary. For 1998, the Compensation Committee established the base
salary for Mr. Walden based upon a subjective evaluation of his performance
and the overall performance of the Company as well as upon an informal
analysis and review of information available to the Company with respect to
base salary levels of executive officers of companies that are similar in size
to the Company. The Committee reviews Mr. Walden's base salary annually. The
base salaries of the Company's other executive officers are established by the
Chief Executive Officer in his discretion and recommended by him to the
Compensation Committee for approval. The Chief Executive Officer makes his
recommendations based upon his subjective evaluation of the individual
executive officer's performance and upon the performance of the Company.
Short-Term Incentive Compensation. During 1995, the Compensation Committee
approved and implemented the Metrotrans Corporation Management Incentive
Compensation Plan (the "MICP"). Under the MICP, the Company's executive
officers and other management employees have the opportunity to earn annual
performance bonuses based upon the achievement of certain predetermined
performance objectives. The bonus awarded to the participants in the MICP is
determined on the basis of (i) the Company attaining certain pretax earnings
target levels established by the Compensation Committee and (ii) a rating
assigned to each participant based upon the individual participant performing
to certain standards and achieving goals established by the Compensation
Committee in the case of the Chief Executive Officer and by the Chief
Executive Officer in the case of the remaining participants. A participant is
not eligible for any bonus payment under the MICP unless the Company achieves
the minimum pretax earnings target level established by the Compensation
Committee. The actual bonus is determined utilizing a matrix that considers
the actual pretax earnings of the Company and the individual performance level
of the participant whose performance is rated outstanding, superior, good or
satisfactory. Depending on the performance of the Company and the rating
assigned to the individual participant, a participant may earn a bonus of up
to 100% of his or her base salary, including commissions. The Company did not
pay any bonuses under the MICP during 1998.
Long-Term Incentive Compensation. The Company's long-term incentive
compensation is based upon the ESIP. This plan promotes ownership of the
Company's Common Stock which, in turn, provides a common interest between the
stockholders and executive officers and other management employees of the
Company. The Compensation Committee, which administers the ESIP, generally
grants options under the ESIP with an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant and, in order to
encourage a long-term perspective, with an exercise period of ten years. The
Company did not grant any options during 1998. See "Employees Stock Incentive
Plan" above.
The Securities and Exchange Commission requires an explanation of the
Company's practice regarding adherence to Section 162(m) of the Code, which
disallows the deduction for certain annual compensation in excess of $1
million paid to executive officers. Given the Company's current level of
compensation, this factor has no effect on the compensation program at this
time. However, to preserve the future deductibility of stock option exercises,
the ESIP sets an annual per-employee limit on the number of shares for which
options may be granted.
COMPENSATION COMMITTEE
Patrick L. Flinn
William C. Pitt III
9
<PAGE>
STOCK PERFORMANCE GRAPH
The Company's Common Stock began trading on The Nasdaq National Market on
June 10, 1994. The price information reflected for the Company's Common Stock
in the following performance graph represents the closing sales prices of the
Common Stock for the period from June 10, 1994 through December 31, 1998, on a
quarterly basis. The graph and the accompanying table compare the cumulative
total stockholders' return on the Company's Common Stock with the Nasdaq
Composite Index and the S&P 500 Index. The calculations in the following graph
and table assume that $100 was invested on June 10, 1994, in each of the
Company's Common Stock, the Nasdaq Composite Index and the S&P 500 Index and
also assumes dividend reinvestment.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, NASDAQ COMPOSITE INDEX AND S&P 500 INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Metrotrans Nasdaq S&P 500
Date Corporaton Composite Index Index
---- ---------- --------------- -------
<S> <C> <C> <C>
06/10/94 $100.00 $100.00 $100.00
06/30/94 94.12 96.11 96.99
09/30/94 102.94 104.22 101.79
12/31/94 70.59 102.50 101.78
03/31/95 69.12 111.50 111.71
06/30/95 86.77 127.45 122.46
09/30/95 100.00 142.65 132.28
12/31/95 105.88 143.97 140.10
03/31/96 147.06 150.97 147.85
06/30/96 164.71 162.66 154.52
09/30/96 155.88 168.18 159.31
12/31/96 164.71 176.27 172.74
03/31/97 120.59 167.23 177.30
06/30/97 117.65 197.62 208.33
09/30/97 158.82 231.27 224.15
12/31/97 132.35 215.24 230.51
03/31/98 105.89 252.22 262.87
06/30/98 119.12 257.99 271.89
09/30/98 97.06 229.95 245.07
12/31/98 55.88 297.59 297.31
</TABLE>
10
<PAGE>
CERTAIN RELATIONSHIPS
Pursuant to the Mayflower Agreement, Mayflower agreed to loan to the Company
up to $15 million (the "Loan") for a term of 5 years. If Mr. Walden exercises
his Put (as defined below) or Mayflower exercises its Call (as defined below),
Mayflower will have the right at anytime thereafter to convert the outstanding
principal, interest, fees and other amounts owing under the Loan into shares
of Common Stock. The price per share for such conversion will be the average
of the closing bid and asked price for the Common Stock reported by the Nasdaq
National Market (or other exchange or quotation system on which the Common
Stock is then traded) for the 20 trading days immediately prior to the date of
the exercise of the conversion right or, if the Common Stock is not then
traded on an exchange, the appraised value determined by an independent
appraiser.
As of December 31, 1998, Mayflower had loaned to the Company $1.9 million of
the amount available under the Loan Agreement, but refused to fund additional
advances requested by the Company. Mayflower also provided some technical and
administrative services to the Company but, based upon Mayflower's refusal of
further funding and the discovery that the technical and administrative
employees were reporting directly to Mayflower in London, the Mayflower
personnel are no longer providing service for the Company pending resolution
of disputes between Mayflower and the Company. The Company has filed suit
against Mayflower, and litigation is pending.
Additionally, Mr. Walden and Ms. Hobbs shall have the right (the "Put"),
commencing December 31, 2000 and expiring 45 days after the results of
operation are published by the Company for the period ending December 31, 2002
(the "Option Term"), to tender all of either of their shares of Common Stock
to Mayflower at a price determined pursuant to the Mayflower Agreement. Under
certain circumstances, Mr. Walden and Ms. Hobbs have the right to exercise
their Put prior to December 31, 2000. In the event that the Option Term
expires without Mr. Walden and Ms. Hobbs, or either of them, having exercised
the Put or under certain other circumstances, Mayflower shall have the right
to purchase, at any time prior to December 31, 2004, Mr. Walden's and Ms.
Hobbs' shares at a purchase price of $15.00 per share. See "Voting--Quorum and
Vote Required" and "Election of Directors--Nominees" for additional
information regarding the Mayflower Agreement.
11
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the Securities and Exchange Commission thereunder require the
Company's directors and executive officers and persons who own more than 10%
of the Company's Common Stock, as well as certain affiliates of such persons,
to file initial reports of their ownership of the Company's Common Stock and
subsequent reports of changes in such ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Directors, executive officers and persons owning more than 10% of the
Company's Common Stock are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16(a) reports
they file. Based solely on its review of the copies of such reports received
by it and written representations that no other reports were required for
those persons, the Company believes that during the fiscal year ended December
31, 1998, all filing requirements applicable to its directors, executive
officers and owners of more than 10% of its Common Stock were complied with in
a timely manner.
STOCKHOLDERS' PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders, including recommendations for nominations for the
Board of Directors, intended to be presented at the 2000 Annual Meeting of
Stockholders should be submitted by certified mail, return receipt requested,
and must be received by the Company at its executive offices in Griffin,
Georgia, on or before January 4, 2000 to be eligible for inclusion in the
Company's proxy statement and form of proxy relating to that meeting and to be
introduced for action at the meeting. Any stockholder proposal must be in
writing and must set forth (i) a description of the business desired to be
brought before the meeting and the reasons for conducting the business at the
meeting, (ii) the name and address, as they appear on the Company's books, of
the stockholder submitting the proposal, (iii) the class and number of shares
that are beneficially owned by such stockholder, (iv) the dates on which the
stockholder acquired the shares, (v) documentary support for any claim of
beneficial ownership, (vi) any material interest of the stockholder in the
proposal, (vii) a statement in support of the proposal and (viii) any other
information required by the rules and regulations of the Securities and
Exchange Commission.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Stockholders which
may properly come before the Annual Meeting. However, if any other matter
should be properly presented for consideration and voting at the Annual
Meeting or any adjournments thereof, it is the intention of the persons named
as proxies on the enclosed form of proxy card to vote the shares represented
by all valid proxy cards in accordance with their judgment of what is in the
best interest of the Company.
By Order of the Board of Directors.
/s/ Henry J. Murphy
HENRY J. MURPHY
Interim Chief Executive Officer
Griffin, Georgia
April 30, 1999
----------------
The Company's 1998 Annual Report, which includes audited financial
statements, has been mailed to stockholders of the Company with these proxy
materials. The Annual Report does not form any part of the material for the
solicitation of proxies.
12
<PAGE>
Revocable Proxy COMMON STOCK
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1999 ANNUAL MEETING
OF STOCKHOLDERS
The undersigned hereby appoints Henry J. Murphy and Terri B. Hobbs, and each
of them, proxies, with full power of substitution, to act for an in the name of
the undersigned to vote all shares of Common Stock of Metrotrans Corporation
(the "Company") which the undersigned is entitled to vote at the 1999 Annual
Meeting of Stockholders of the Company, to be held at Suite 5300, 303 Peachtree
Street, Atlanta, Georgia, on Tuesday, June 8, 1999, at 10:00 a.m., local time,
and at any and all adjournments thereof, as indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BELOW-LISTED PROPOSAL
1) Elect as directors the three nominees listed below to serve until the 2000
Annual Meeting of Stockholders and until their successors are elected and
qualified (except as marked to the contrary below):
[_] FOR ALL NOMINEES listed below (except as marked to the contrary below).
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
<TABLE>
<S> <C> <C>
Patrick L. Flinn William C. Pitt III D. Michael Walden
</TABLE>
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any and all
adjournments thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-
PAID ENVELOPE.
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
(Continued from the other side)
PROXY -- SOLICITED BY THE BOARD OF DIRECTORS
This proxy card will be voted as directed. If no instructions are specified,
this proxy card will be voted "FOR" each of the proposals listed on the reverse
side of this proxy card. If any other business is presented at the Annual
Meeting, this proxy card will be voted by the proxies in their best judgment.
At the present time, the Board of Directors knows of no other business to be
presented at the Annual Meeting.
The undersigned may elect to withdraw this proxy card at any time prior to
its use by giving written notice to the Secretary of the Company, by executing
and delivering to the Secretary a duly executed proxy card bearing a later
date, or by appearing at the Annual Meeting and voting in person.
_________________________
Signature
___________________________
Signature, if shares
held jointly
Date: _______________, 1999
(Please mark, date and
sign exactly as your name
appears on this proxy
card. When shares are held
jointly, both holders
should sign. When signing
as attorney, executor,
administrator, trustee,
guardian or custodian,
please give your full
title. If the holder is a
corporation or a
partnership, the full
corporate or partnership
name should be signed by a
duly authorized officer.
Do you plan to attend the Annual
Meeting? [_] YES [_] NO
