<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>
Dorsey Trailers, 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
DORSEY TRAILERS, INC.
ONE PACES WEST, SUITE 1700
2727 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
April 10, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Dorsey Trailers, Inc. which will be held at One Paces West, 2727 Paces Ferry
Road, Atlanta, Georgia, on Wednesday, April 30, 1997, at 10:30 A.M. local time.
We look forward to your attendance at the Annual Meeting so that you can
vote your shares in person and become better acquainted with the members of your
Board of Directors and your management team. The items of business to be
conducted at the Annual Meeting are explained in the accompanying Proxy
Statement. Even if you are planning to attend, please complete the enclosed
proxy card and return it in the enclosed envelope so that your shares may be
voted. You will still be able to vote your shares in person if you attend the
Annual Meeting.
Your past support is sincerely appreciated, and, with your continued
support, we look forward to the next year.
If you have any questions about the Proxy Statement or the 1996 Annual
Report, please contact T. Charles Chitwood at (770) 438-9595.
We look forward to seeing you on April 30, 1997.
Sincerely,
/s/ Marilyn R. Marks
MARILYN R. MARKS
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
DORSEY TRAILERS, INC.
ONE PACES WEST, SUITE 1700
2727 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
---------------------
NOTICE TO THE HOLDERS OF COMMON STOCK
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1997
---------------------
Notice is hereby given to the holders of Common Stock of Dorsey Trailers,
Inc. (the "Company") that the Annual Meeting of Stockholders (the "Annual
Meeting") of the Company will be held at One Paces West, 2727 Paces Ferry Road,
Atlanta, Georgia, on Wednesday, April 30, 1997, at 10:30 A.M., local time, for
the following purposes:
(i) to elect two persons to serve as directors of the Company;
(ii) to ratify the selection of Price Waterhouse LLP as independent
certified public accountants for the year ending December 31, 1997; and
(iii) to consider and act upon such other business as may properly
come before the meeting or any adjournments thereof.
Only those stockholders of record at the close of business on March 3,
1997, are entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof. The transfer books will not be closed. A complete list of
stockholders entitled to vote at the Annual Meeting will be available at the
Annual Meeting.
By Order of the Board of Directors,
/s/ T. Charles Chitwood
T. CHARLES CHITWOOD
Secretary
April 10, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS REPLY
ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING YOU MAY, IF YOU WISH, WITHDRAW YOUR
PROXY APPOINTMENT AND VOTE IN PERSON.
<PAGE> 4
DORSEY TRAILERS, INC.
ONE PACES WEST, SUITE 1700
2727 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
---------------------
PROXY STATEMENT
---------------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1997
April 10, 1997
INTRODUCTION
This Proxy Statement is furnished to holders of the common stock, $.01 par
value per share ("Common Stock"), of Dorsey Trailers, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Company's Board of Directors from holders of the outstanding shares of
Common Stock for use at the Annual Meeting of Stockholders to be held at 10:30
A.M. local time at One Paces West, 2727 Paces Ferry Road, Atlanta, Georgia, on
Wednesday, April 30, 1997, and at any adjournments thereof (the "Annual
Meeting").
The Annual Meeting will be held for the following purposes:
(i) to elect two persons to serve as directors of the Company;
(ii) to ratify the selection of Price Waterhouse LLP as independent
certified public accountants for the year ending December 31,
1997; and
(iii) to consider and act upon such other business as may properly come
before the meeting or any adjournments thereof.
The Company's mailing address and the location of its principal executive
offices are One Paces West, Suite 1700, 2727 Paces Ferry Road, Atlanta, Georgia
30339. This Proxy Statement and the accompanying Proxy are first being mailed to
stockholders of the Company on or about April 10, 1997.
STOCKHOLDERS ENTITLED TO VOTE
Only stockholders of record of the Company at the close of business on
March 3, 1997 (the "Record Date") will be entitled to notice of, and to vote at,
the Annual Meeting. On the Record Date, there were 4,997,422 shares of Common
Stock issued and outstanding held by approximately 110 stockholders of record.
Notwithstanding the Record Date specified above, the Company's stock transfer
books will not be closed and shares may be transferred subsequent to the Record
Date. However, all votes must be cast in the names of stockholders of record on
the Record Date.
Pursuant to the Company's Certificate of Incorporation (the "Certificate of
Incorporation"), holders of Common Stock will be entitled to one vote for each
share held. The election of directors requires the affirmative vote of a
plurality of the shares of Common Stock cast at the Annual Meeting, provided a
quorum is present, and, therefore, abstentions and broker non-votes will have no
effect. The ratification of the selection of Price Waterhouse LLP as independent
auditors requires the affirmative vote of a majority of the shares of Common
Stock cast at the Annual Meeting, provided a quorum is present, and, therefore,
abstentions or broker non-votes will have no effect. Pursuant to the Company's
Bylaws (the "Bylaws"), a majority of the shares of Common Stock must be present
to establish a quorum. For the purpose of determining the presence of a quorum,
abstentions will be counted as present, but broker non-votes will not be
counted.
PROXIES
If the enclosed Proxy is executed, returned in time and not revoked, the
shares represented thereby will be voted in accordance with the instructions
indicated in such Proxy. IF NO INSTRUCTIONS ARE
<PAGE> 5
INDICATED, PROXIES WILL BE VOTED (I) FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS OF THE COMPANY, (II) FOR RATIFICATION OF THE SELECTION OF PRICE
WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 1997, AND (III) IN THE BEST JUDGMENT OF SUCH PROXIES AS
TO ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENTS THEREOF.
A stockholder who has given a Proxy may revoke it at any time prior to its
exercise at the Annual Meeting by either (i) giving written notice of revocation
to the Secretary of the Company, (ii) properly submitting to the Company a duly
executed Proxy bearing a later date, or (iii) appearing at the Annual Meeting
and voting in person. All written notices of revocation of Proxies should be
addressed as follows: Dorsey Trailers, Inc., One Paces West, Suite 1700, 2727
Paces Ferry Road, Atlanta, Georgia 30339, Attention: T. Charles Chitwood,
Secretary.
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of directors shall be
authorized by resolution of a majority of the Board of Directors. The Board of
Directors has by resolution set the number of directors at five. The Company's
Certificate of Incorporation provides for the Board of Directors to consist of
three classes of directors serving staggered terms of office with each class to
consist, as nearly as possible, of one-third of the total number of directors
constituting the entire Board of Directors. Upon the expiration of the term of
office for a class of directors, the nominees for that class will be elected for
a three-year term to serve until the election and qualification of their
successors. The Class III directors, Marilyn R. Marks and Neil A. Springer have
been nominated for re-election at the Annual Meeting. The Class II and Class I
directors have two years and one year, respectively, remaining on their terms of
office and will not be voted upon at the Annual Meeting.
It is the intention of the persons named as proxies to vote the proxies for
the nominees' election as Class III directors of the Company, unless the
stockholders direct otherwise in their proxies. Both nominees have consented to
serve as directors of the Company. In the unanticipated event that either of the
nominees refuses or is unable to serve as a director, the persons named as
proxies reserve full discretion to vote for such other person or persons as may
be nominated. The Board of Directors has no reason to believe that Marilyn R.
Marks or Neil A. Springer will be unable or will decline to serve as a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MISS MARKS AND
MR. SPRINGER. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A PLURALITY OF THE SHARES
CAST IN THE ELECTION AT THE ANNUAL MEETING AT WHICH A QUORUM IS PRESENT IS
REQUIRED FOR THE ELECTION OF MISS MARKS AND MR. SPRINGER.
DIRECTOR AND DIRECTOR NOMINEE INFORMATION
Based on information supplied by them, set forth below is certain
information concerning the nominees for election as Class III directors and the
directors in Classes I and II whose terms of office will continue after the
Annual Meeting, including the name and age of each, their current principal
occupations (which has continued for five years unless otherwise indicated), the
names and principal businesses of the organizations in which their occupations
are carried on, the year each was elected to the Board of Directors of the
Company, their positions with the Company, and their directorships in other
companies.
NOMINEES FOR DIRECTOR
Class III Nominees for Directors
Marilyn R. Marks (age 44) has been the President, Chief Executive Officer
and a director of the Company since 1987 when she led a leveraged buyout of the
Company's predecessor. Before the leveraged buyout, Miss Marks held several
executive positions with the former parent company, The Dorsey Corpora-
2
<PAGE> 6
tion, whose shares were listed on the New York Stock Exchange. Miss Marks serves
on the Board of Directors of Eastman Chemical Company and Dana Corporation.
Neil A. Springer (age 58) was an advisor to the Company from 1990 until
1994 and has been a director of the Company since May 1994. Mr. Springer has
been Managing Director of Springer Souder & Associates (an executive placement
company) since June 1994. Mr. Springer was Senior Vice President of Slayton
International, Inc. (an executive placement company) from August 1992 until June
1994. He was President -- Central Region of Alexander Proudfoot Company (a
management consulting firm) from July 1991 to July 1992. Previously, he was the
President and Chief Operating Officer of Navistar International Corp. from April
1990 through October 1990. From 1989 to March 1990, he was the Chairman,
President and Chief Executive Officer of Navistar International Transportation
Corp., a wholly-owned subsidiary of Navistar International Corp. Mr. Springer is
a director of TNT Freightways Corporation and IDEX.
CONTINUING DIRECTORS
Class I Director Continuing in Office (Term expires 1998)
J. Hoyle Rymer (age 52) was an advisor to the Company from 1992 to 1994 and
has been a director of the Company since May 1994. He has been the President of
JHR Co. (a private investment company) since July 1989. He was President of
Magic Chef Co., a division of Maytag, Inc., from 1978 to 1988. Mr. Rymer is a
director of First American National Bank of Cleveland, Tennessee and Plasti-Line
Inc.
Class II Directors Continuing in Office (Term expires 1999)
Lawrence E. Mock, Jr. (age 50) was an advisor to the Company from 1992 to
1994 and has been a director of the Company since May 1994. Mr. Mock is
currently President and Chief Executive Officer of Mellon Ventures, Inc., a
subsidiary of Mellon Bank Corporation. Prior to this, Mr. Mock was President of
Strategic Equity Advisors, Inc. (a personal holding company) from 1994 to
mid-1995. From 1983 through 1993, he was President, Chief Executive Officer and
General Partner of River Capital, Inc. and River Capital Partners, L.P.,
Atlanta-based equity investment firms. Prior to 1983, Mr. Mock was Chief
Operating Officer of Hangar One, Inc. (an aviation sales and service company).
Ernest H. Lorch (age 64) has been an advisor to the Company since 1994 and
has been a director of the Company since April 1996. Mr. Lorch, is currently of
counsel to the firm Whitman, Breed, Abbott & Morgan, a New York law firm. Mr.
Lorch served as President and Chief Operating Officer of the Dyson-Kissner-Moran
Corporation from 1984 through 1990, and Chairman of the Board and Chief
Executive Officer in 1991 and 1992. Mr. Lorch is a director of Tyler Corporation
and Chairman of the Board of Varlen Corporation.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has established standing Audit and Compensation
Committees. The Company does not have a standing nominating committee.
Audit Committee. The Audit Committee, which is comprised of Messrs. Rymer,
Springer, and Lorch, is responsible for reviewing and making recommendations
regarding the Company's employment of independent auditors, the annual audit of
the Company's financial statements and the Company's internal controls,
accounting practices and policies. During 1996, the Audit Committee met one
time.
Compensation Committee. The Compensation Committee, which is comprised of
Messrs. Mock and Rymer, is responsible for determining the compensation of the
Company's executive officers, establishing targets and incentive awards under
incentive compensation plans and administering employee benefits. During 1996,
the Compensation Committee did not meet.
During 1996, the Board of Directors met four times. Each director, during
the period he or she was a director, attended at least 75% of the meetings of
the Board of Directors and at least 75% of the total number of meetings of all
of the committees on which he or she served.
3
<PAGE> 7
DIRECTOR COMPENSATION
The Company pays non-employee directors an annual retainer of $7,500
payable in cash and $7,500 payable in shares of Common Stock pursuant to the
Dorsey Trailers, Inc. 1994 Stock Plan for Non-Employee Directors. See "Incentive
Plans -- Stock Plan for Non-Employee Directors." The chairman of each Board
committee also receives an additional $1,000 per year. In addition, directors
receive $1,000 for each Board meeting and $500 for each committee meeting
attended, plus reimbursement of expenses incurred in attending meetings. No
additional fee is paid for committee meetings held in conjunction with Board
meetings.
EXECUTIVE OFFICERS OF THE COMPANY
The current executive officers of the Company are Miss Marks (who is
identified above), Henry E. Carter, T. Charles Chitwood, David A. Kemp and H.
Douglas Allgood.
Henry E. Carter (age 47) joined the Company in January 1996 as Vice
President -- Sales and Marketing and was promoted to Executive Vice President.
During 1995, Mr. Carter was President of Constar International where for at
least four years prior he was Senior Vice President of Sales and Marketing. Mr.
Carter had held other sales and marketing positions since joining Constar in
1978.
T. Charles Chitwood (age 50) has been the Vice President -- Finance,
Secretary, Treasurer and Chief Financial Officer since he joined the Company in
May 1989. He was a Director of the Company from May 1990 until May 1994.
Previously, Mr. Chitwood was Vice President -- Finance at Diamond Bathurst, Inc.
(a manufacturer of glass containers) from 1985 until 1988, Vice
President -- Finance at Container General Corporation (a manufacturer of glass
containers) from 1983 until 1985 and Vice President and Corporate Controller at
The Dorsey Corporation from 1978 until 1983.
David A. Kemp (age 38) joined the Company in January 1991 as Director of
Engineering and was promoted to Vice President -- Engineering in January 1993.
From 1983 until joining the Company, he was a project engineer at Great Dane
Trailers.
H. Douglas Allgood (age 49) joined the Company in September 1992 as Vice
President -- Manufacturing. From 1990 until 1992, he served as Plant Manager for
Fruehauf Trailer Corporation. Mr. Allgood also served as Plant Manager for
Herrick Pacific Corp. (a steel fabricator) from 1988 until 1990. From 1979 until
1988, Mr. Allgood was the General Plant Manager for the Peterbilt truck assembly
plant in Denton, Texas.
4
<PAGE> 8
EXECUTIVE COMPENSATION
The following table presents certain information concerning compensation
earned for services rendered in all capacities to the Company by the Company's
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company (collectively, the "Named Executive Officers')
for the years ended December 31, 1996, 1995, and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
-------------------- SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
--------------------------- ------ --------- -------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Marilyn R. Marks..................... 1996 $232,000 $ -- -- $ --
President and Chief 1995 225,000 -- -- 4,620
Executive Officer 1994 225,000 90,000(2) -- 4,620
Henry E. Carter...................... 1996 $213,173 $ -- 50,000 shares $ --
Executive Vice President
T. Charles Chitwood.................. 1996 $188,000 $ -- -- $ --
Vice President -- Finance 1995 182,500 -- -- 4,620
1994 176,500 70,600 -- 4,620
David A. Kemp........................ 1996 $124,000 $ -- -- $ --
Vice President -- Engineering 1995 116,000 10,000 -- --
1994 110,000 44,000 -- --
H. Douglas Allgood................... 1996 $111,000 $ -- -- $ --
Vice President -- Manufacturing 1995 108,000 -- -- 3,915
1994 104,000 41,600 -- 2,340
</TABLE>
- ---------------
(1) Represents matching contributions pursuant to the Company's 401(k) plan.
(2) This bonus was earned by Miss Marks in 1994, but has not yet been paid.
STOCK OPTIONS
Option Grants in the Year-Ended December 31, 1996. The following table
sets forth certain information concerning the grant of options to Mr. Carter to
purchase common stock pursuant to the Company's Stock Incentive Plan. None of
the other named executive officers were granted options during the year ended
December 31, 1996.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM(2)
OPTIONS IN FISCAL EXERCISE EXPIRATION -------------------
NAME GRANTED(1) YEAR 1996 PRICE ($/SH) DATE 5% ($) 10% ($)
- ---- ---------- ---------- ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Henry E. Carter.................... 50,000 100% $5.44 1/22/06 443,059 705,498
</TABLE>
- ---------------
(1) Option was issued under the Company's Stock Incentive Plan. Options are
exercisable 16,667 in January 1997, 16,667 in January 1998 and 16,666 in
January 1999.
(2) Based upon the market price on the date of grant and on annual appreciation
at the rate stated of such market price through the expiration date of such
options. The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the SEC and therefore are not
intended to forecast possible future appreciation, if any, of the Company's
stock price.
5
<PAGE> 9
Option Exercises and Year-end Values. The following tables set forth all
options exercised by the Named Executive Officers during the year ended December
31, 1996, and the number and value of options held by such executive officers at
fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON EXERCISE REALIZED AT DECEMBER 31, 1996 AT DECEMBER 31, 1996(1)
--------------- -------- -------------------- -----------------------
<S> <C> <C> <C> <C>
Marilyn R. Marks.................. -- $ -- -- $ --
Henry E. Carter................... -- -- 50,000 162,500
T. Charles Chitwood............... -- -- 145,299 472,222
David A. Kemp..................... 10,000 31,970 131,067 425,968
H. Douglas Allgood................ -- -- 108,051 351,166
</TABLE>
- ---------------
(1) Based on the closing price on the Nasdaq Stock Market of the Company's
Common Stock on December 31, 1996 ($3.25).
INCENTIVE PLANS
Pension Plans. The Company sponsors a defined benefit pension plan for
employees, which has been maintained in compliance with the tax qualification
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The
plan provides monthly payments in the form of a life annuity to salaried
employees of the Company who retire at normal or early retirement age (65 and 60
respectively). The monthly payments are not subject to offset for Social
Security or other payments. Cash contributions are made by the Company on an
annual basis to an irrevocable pension trust in order to fund the future pension
payments. The Company also adopted an excess benefit plan in 1994 for executives
earning over $150,000. The excess plan provides the pension benefits which
cannot be provided under the defined benefit plan because of the $150,000
compensation limit under the Code. The excess plan benefits are not funded. Any
benefits due under the excess plan will be paid from the Company's general
assets.
The following table shows the total estimated annual pension benefits
payable to a covered participant at normal retirement age under the defined
benefit and excess plans:
YEARS OF SERVICE AT NORMAL RETIREMENT AGE
<TABLE>
<CAPTION>
REMUNERATION(1) 10 15 20(2)
- --------------- ------- -------- --------
<C> <C> <C> <C>
$100,000 $19,610 $ 29,415 $ 39,220
125,000 24,610 36,915 49,220
150,000 29,610 44,415 59,220
175,000 34,610 51,915 69,220
200,000 39,610 59,415 79,220
225,000 44,610 66,915 89,220
250,000 49,610 74,415 99,220
300,000 59,610 89,415 119,220
350,000 69,610 104,415 139,220
</TABLE>
- ---------------
(1) The remuneration taken into account under these plans is the average annual
compensation reported to the covered employee on IRS Form W-2 for the five
calendar years preceding retirement.
(2) A maximum of 20 years of service is taken into account in determining
pension benefits.
Benefits under the plans generally vest after the participant has completed
five years of employment with the Company. The retirement benefit payable at age
65 to participants is 1.35% of the first $6,000 of the participants'
remuneration and 2% of the participants' remuneration in excess of $6,000 both
multiplied by the
6
<PAGE> 10
participants' years of service (to a maximum of 20 years). Benefits under the
plans are reduced (i) if at retirement the participant has fewer than 20 years
of employment with the Company and (ii) if the participant begins to receive
benefits prior to age 62.
As of December 31, 1996, Marilyn Marks had an average five-year
compensation of $227,650 and nine years of credited service; Mr. Carter had an
average five-year compensation of $213,173 and eleven months of credited
service; Mr. Chitwood had an average five-year compensation of $197,143 and
seven years of credited service; Mr. Kemp had an average five-year compensation
of $120,800 and five years of credited service; and Mr. Allgood had an average
five-year compensation of $122,400 and four years of credited service.
Long-Term Incentive Plan. On July 6, 1994, the Board of Directors of the
Company adopted and the stockholders of the Company approved the Dorsey
Trailers, Inc. Stock Incentive Plan (the "Incentive Plan").
The purpose of the Incentive Plan is to promote the success, and enhance
the value, of the Company by linking the personal interests of executive
officers and other key employees to those of Company stockholders, and by
providing executive officers and other key employees with an incentive for
outstanding performance. The Incentive Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of employees upon whose judgment, interest, and special effort the
successful conduct of its operation largely is dependent.
Subject to adjustment as provided in the Incentive Plan, the aggregate
number of shares of Common Stock reserved and available for Awards or which may
be used to provide a basis of measurement for or to determine the value of an
Award (such as with a SAR or Performance Share Award) is 250,000. During the
year ended December 31, 1996, one grant was made to a named executive officer
for 50,000 shares with an exercise price of $5.44 based on the closing market
price on the grant date. These awards vest in one-third increments beginning one
year after grant. The market price of the Common Stock on December 31, 1996 was
$3.25.
Stock Plan for Non-Employee Directors. On July 6, 1994, the Board of
Directors adopted and the stockholders of the Company approved the Dorsey
Trailers, Inc. Stock Plan for Non-Employee Directors (the "Directors' Plan").
The Directors' Plan provides for the issuance of shares of Common Stock to
directors of the Company who are not current or former employees of the Company
or members of the immediate family of a current or former employee of the
Company ("Outside Directors"). A total of 30,000 shares of Common Stock are
reserved for issuance pursuant to the Directors' Plan. The Directors' Plan
became effective on August 4, 1994 and will terminate August 4, 1999.
Messrs. Mock, Rymer, Springer and Lorch currently participate in the
Directors' Plan. During 1996, each participant received 2,142 shares of Common
Stock with a fair market value of $7,500 on the day issued. To date, shares of
Common Stock issued under the Directors' Plan totals 12,411.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Rymer and Mock served as members of the Compensation Committee
throughout 1996.
7
<PAGE> 11
STOCKHOLDER RETURN COMPARISON
The following line graph presentation compares cumulative stockholder
returns of the Company with the Nasdaq Stock Market (U.S. Companies) and a Peer
Index for the period beginning July 28, 1994 (assuming the investment of $100 in
the Company's Common Stock, the Nasdaq Stock Market (U.S. Companies) and the
Peer Index and reinvestment of all dividends). The Peer Index is composed of
stocks in the Nasdaq Trucking and Transportation Stock Index.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DORSEY TRAILERS, THE NASDAQ STOCK PEER INDEX
(FISCAL YEAR COVERED) INC. MARKET
<S> <C> <C> <C>
7/28/94 100 100 100
12/31/94 116.3 106.4 94.4
12/31/95 40.4 150.3 109.3
3/31/96 29.8 157.5 120.2
6/30/96 36.5 170.3 119.3
9/30/96 30.3 176.4 114.2
12/31/96 25 185.1 121.3
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The elements of executive compensation consist of base salary, annual cash
incentive bonus compensation, long-term incentive compensation in the form of
stock options, and various other benefits which are generally available to all
employees of the Company.
Base Salary. The base salary for an executive officer is based on the
officer's responsibilities and is set at a level that the Compensation Committee
believes is competitive with other companies in the trucking and transportation
industry. For 1996, the Board of Directors primarily relied upon the advice of
Miss Marks in determining salaries for executive officers. For 1996, Miss Marks'
salary was raised to $232,000. The 1996 compensation of Marilyn R. Marks, the
Company's Chief Executive Officer, was based on a review of salaries paid by
other manufacturing enterprises of similar size within the geographic area, and
also taking into account that her base salary has remained the same for both
1994 and 1995 and the leadership provided by Miss Marks in her role as Chief
Executive Officer.
Bonus Plan. Executive officers also are eligible for participation in the
Company's annual bonus plan. This plan awards executive officers with cash
bonuses based upon the achievement of certain levels of pretax earnings by the
Company. The Committee believes that the bonus plan provides appropriate
incentives to the
8
<PAGE> 12
executive officers to increase the value of the Company in a manner that also
increases the value of the Company for its stockholders.
Under the bonus plan adopted by the Board of Directors for 1996, executive
officers were eligible to receive a bonus ranging from 15% to 75% of their base
salaries depending on the level of pretax earning achieved by the Company. No
bonuses were awarded for the year ended December 31, 1996.
Long-Term Incentives. Long-term incentive for executive officers is
provided by the grant of stock options. The Committee believes that the grant of
stock options provides the executive officers with the long-term incentive to
enhance the value of the Company by directly tying the compensation of the
executive officers to increases in stockholder value. Prior to 1994, Miss Marks
made extensive grants of stock options to the executive officers. The Committee
believes that these grants have provided the executive officers with
considerable long-term incentive. During 1996, the Committee granted a stock
option for 50,000 shares of Common Stock to an executive officer. In the future,
the Committee will consider the amount and terms of options held by the
executive officers in determining option grants.
Other Compensation Plans. The Company maintains several broad-based
employee benefit plans in which the executive officers are permitted to
participate on the same terms as other employees. These include a retirement
savings plan designed to qualify under section 401(k) of the Code and a defined
benefit pension plan that provides monthly payment in the form of a life annuity
following five years of employment with the Company. Certain executive officers
also are eligible for participation in an excess benefit plan for highly
compensated individuals which increases payouts under the defined benefit
pension plan.
Tax Deductibility of Compensation. Section 162(m) of the Code generally
disallows a tax deduction to public companies for compensation over $1 million
to each of the Named Executive Officers. Certain performance-based compensation
is, however, exempted from the deduction limit. For 1996, the Committee did not
take section 162(m) into account as no executive was near the $1 million
threshold. In the future, the Committee will consider the effect of section
162(m) on its compensation decisions, but has no policy to limit executive
compensation so that all compensation is deductible.
COMPENSATION COMMITTEE
Lawrence E. Mock, Jr.
J. Hoyle Rymer
March 21, 1997
9
<PAGE> 13
CERTAIN TRANSACTIONS
The following is a summary of certain transactions entered into between the
Company and certain of its executive officers and directors.
Marilyn Marks guarantees 33% of the amount of the Company's loan from the
U.S. Small Business Administration (the "SBA Loan"). As of December 31, 1996,
the principal balance of the loan was $7,296,000.
Subsequent to year-end 1996 through March 28, 1997, the Company sold used
trailers at various dates, upon the approval of the Board of Directors of the
Company, in the amount of approximately $4,657,000 to TYM, Inc. TYM, Inc. is a
corporation wholly-owned by Marilyn R. Marks, Chief Executive Officer of the
Company. The Company has incurred losses of approximately $819,000 on the sales
to TYM, Inc. In the opinion of management, based upon actual third-party offers,
the terms of the sale of these used trailers are no less favorable than terms
that could have been obtained from unaffiliated parties.
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth information with respect to the beneficial
ownership of shares of Common Stock as of February 14, 1997 by (i) each director
and nominee for director of the Company; (ii) the Named Executive Officers of
the Company; (iii) each person known by the Company to own beneficially more
than 5% of the outstanding shares of the Common Stock; and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated,
each stockholder has sole voting and investment power with respect to the
indicated shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME BENEFICIALLY OWNED(1) OF CLASS
- ---- --------------------- --------
<S> <C> <C>
Marilyn R. Marks(2)......................................... 1,847,088(3) 37.0%
Henry E. Carter............................................. 18,667(7) *
T. Charles Chitwood(2)...................................... 351,152(4) 7.0%
David A. Kemp............................................... 132,067(5) 2.6%
H. Douglas Allgood.......................................... 108,051(6) 2.2%
Lawrence E. Mock, Jr........................................ 3,623(8) *
J. Hoyle Rymer(2)........................................... 377,602(9) 7.6%
Neil A. Springer............................................ 3,423 *
Ernest H. Lorch............................................. 2,142 *
All directors and executive officers as a group (9
persons).................................................. 2,459,398(10) 49.0%
</TABLE>
- ---------------
* Represents less than 1% of the Common Stock outstanding.
(1) Information relating to the beneficial ownership of Common Stock by the
above individuals is based upon information furnished by each such
individual using "beneficial ownership" concepts set forth in rules
promulgated by the Securities and Exchange Commission under Section 13(d)
of the Securities Exchange Act of 1934, as amended.
(2) The named person's address is One Paces West, Suite 1700, 2727 Paces Ferry
Road, Atlanta, Georgia 30339.
(3) Of these shares, 592,149 shares are subject to stock options issued by Miss
Marks, all of which are currently exercisable.
(4) Includes options to purchase 145,299 shares of Common Stock granted by Miss
Marks.
(5) Consists of options to purchase 131,067 shares of Common Stock granted by
Miss Marks.
(6) Consists of options to purchase 108,051 shares of Common Stock granted by
Miss Marks.
(7) Includes 2,000 shares of Common Stock owned jointly with spouse and
consists of option to purchase 16,667 shares of Common Stock granted by the
Company.
(8) Includes 200 shares held by Mr. Mock as custodian for his children.
(9) Includes 75,000 shares of Common Stock held by Mr. Rymer as trustee for his
child as to which he has sole voting and investment power.
(10) Includes 384,417 shares of Common Stock that are currently held by Miss
Marks, but are subject to options held by all executive officers and
directors as a group and includes the option to purchase 16,667 shares of
Common Stock granted by the Company to Mr. Carter.
10
<PAGE> 14
PROPOSAL II
APPROVAL OF SELECTION OF AUDITORS
The Company's Board of Directors, at the recommendation of the Audit
Committee, has selected Price Waterhouse LLP to conduct the annual audit of the
financial statements of the Company for the year ending December 31, 1997. Price
Waterhouse LLP has no financial interest, direct or indirect, in the Company,
and does not have any connection with the Company except in its professional
capacity as an independent auditor.
The ratification by the stockholders of the selection of Price Waterhouse
LLP as independent auditors is not required by law or by the Bylaws of the
Company. The Board of Directors, consistent with the practice of most publicly
held corporations, is nevertheless, submitting this selection to the
stockholders. If this selection is not ratified at the Annual Meeting, the Board
of Directors intends to reconsider its selection of independent auditors for the
year ending December 31, 1997.
The Audit Committee, approves in advance all material non-audit services to
be provided by Price Waterhouse LLP and believes that these services have no
effect on audit independence.
Representatives of Price Waterhouse LLP will be present at the Annual
Meeting and will have an opportunity to make a statement, if they so desire, and
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 31, 1997. RATIFICATION OF PRICE WATERHOUSE LLP REQUIRES THAT THE
VOTES CAST FOR RATIFICATION EXCEED THE VOTES CAST AGAINST RATIFICATION, PROVIDED
A QUORUM IS PRESENT.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder would like to be presented at the next
annual meeting of stockholders to be held in 1998 must be received by the
Company on or before December 11, 1997. Only proper proposals which are timely
received will be included in the Proxy Statement and Proxy.
OTHER MATTERS
FILINGS UNDER SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than ten percent 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, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that during 1996 all of its officers and
directors complied with all applicable filing requirements.
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies. In addition to the
use of the mails, proxies may be solicited by directors, officers or other
employees of the Company, personally, by telephone or by telegraph. The Company
does not expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers, custodians or other persons holding stock in their names or
in the names of nominees for their expenses in sending proxy materials to
principals and obtaining their instructions.
AVAILABILITY OF ANNUAL REPORT
ACCOMPANYING THIS PROXY STATEMENT IS A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996. STOCKHOLDERS WHO WOULD LIKE
ADDITIONAL COPIES OF THE ANNUAL REPORT SHOULD DIRECT THEIR REQUESTS IN WRITING
TO: DORSEY TRAILERS, INC., ONE PACES WEST, SUITE 1700, 2727 PACES FERRY ROAD,
ATLANTA, GEORGIA 30339, ATTENTION: T. CHARLES CHITWOOD, SECRETARY.
11
<PAGE> 15
APPENDIX
PROXY
DORSEY TRAILERS, INC.
ATLANTA, GEORGIA
ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Dorsey Trailers, Inc. (the "Company"),
Atlanta, Georgia, hereby constitutes and appoints Marilyn R. Marks and T.
Charles Chitwood or either one of them, each with full power of substitution, to
vote the number of shares of Common Stock which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders to
be held at One Paces West, 2727 Paces Ferry Road, Atlanta, Georgia, on
Wednesday, April 30, 1997, at 10:30 A.M., local time, or at any adjournments
thereof (the "Annual Meeting"), upon the proposals described in the Notice of
Annual Meeting of Stockholders and Proxy Statement, both dated April 10, 1997,
the receipt of which is acknowledged, in the manner specified below.
1. ELECTION OF DIRECTOR. On the proposal to elect the following persons to
serve as Class III Directors for a three year period and until their successors
are elected and qualified:
<TABLE>
<S> <C> <C> <C> <C> <C>
[ ] FOR THE ELECTION OF MARILYN R. MARKS and [ ] WITHHOLD AUTHORITY TO VOTE FOR THE NOMINEES [ ] Abstain
NEIL A. SPRINGER (except as marked to the
contrary)
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual Nominee, strike a
line through the Nominee's name in the list above.)
2. RATIFICATION OF AUDITORS. On the proposal to ratify the selection of
Price Waterhouse LLP as independent certified public accountants for the year
ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued, and to be signed on reverse side)
(continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2. THIS PROXY WILL ALSO BE VOTED WITH DISCRETIONARY
AUTHORITY ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING
OR ANY ADJOURNMENTS THEREOF.
Shares Held:
--------------------------------
--------------------------------
Signature of Stockholder
--------------------------------
Signature of Stockholder (if
held jointly)
Dated:
--------------------------------, 1997
Month Day
Please sign exactly as your name
appears on your stock
certificate and date. Where
shares are held jointly, each
stockholder should sign. When
signing as executor,
administrator, trustee, or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
THIS PROXY IS SOLICITED ON BEHALF OF DORSEY TRAILERS, INC.'S BOARD OF DIRECTORS
AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO ITS EXERCISE.
