<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
March 28, 2000
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 Tuesday, April 25, 2000, 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 1999 Annual
Report, please contact Charles A. Chesnutt at (770) 438-9595.
We look forward to seeing you on April 25, 2000.
Sincerely,
/s/MARILYN R. MARKS
Marilyn R. Marks
Chairman of the Board,
<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 25, 2000
---------------------
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 Tuesday, April 25, 2000, 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 PricewaterhouseCoopers LLP as
independent auditors for the year ending December 31, 2000; and
(iii) to consider and act upon such other business as may properly
come before the Annual Meeting or any adjournments thereof.
Only those stockholders of record at the close of business on March 10,
2000, 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/ Charles A. Chesnutt
Charles A. Chesnutt
Secretary
March 28, 2000
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 25, 2000
MARCH 28, 1999
INTRODUCTION
This Proxy Statement is furnished by and on behalf of the Board of
Directors of Dorsey Trailers, Inc. 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
Tuesday, April 25, 2000, 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 PricewaterhouseCoopers LLP as
independent auditors for the year ending December 31, 2000; 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 March 28, 2000.
STOCKHOLDERS ENTITLED TO VOTE
Only stockholders of record of the Company at the close of business on
March 10, 2000 (the "Record Date") will be entitled to notice of, and to vote
at, the Annual Meeting. On the Record Date, there were 5,031,191 shares of
Common Stock issued and outstanding held by approximately 90 stockholders of
record. 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.
QUORUM AND VOTING REQUIREMENTS
Pursuant to the Company's Bylaws the holders of shares of Common Stock
entitled to cast a majority of the votes on the matters at issue at the Annual
Meeting, present in person or by proxy, shall constitute a quorum. For the
purpose of determining the presence of a quorum, abstentions and votes withheld
from any nominee will be considered to be "votes entitled to be cast" and
therefore will be counted as present for purposes of determining the presence or
absence of a quorum. Broker non-votes will not be considered to be "votes
entitled to be cast" and will not be counted as present for quorum purposes.
Broker non-votes are votes that brokers holding shares of record for their
customers are not permitted to cast under applicable rules because the brokers
have not received specific instructions from their customers as to certain
proposals and as to which the broker advised the Company that they lack voting
authority. The election of a director requires
<PAGE> 5
the affirmative vote of a plurality of the votes cast by the shares of Common
Stock at the Annual Meeting, provided a quorum is present, and, therefore,
abstentions, withholding authority to vote with respect to one or more nominees,
and broker non-votes will have no effect on the outcome of the election of
directors. The ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors requires the affirmative vote of a majority of the votes
cast by the shares of Common Stock at the Annual Meeting, provided a quorum is
present. An abstention will have the same affect as a vote "against" while
broker non-votes will have no effect.
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 INDICATED, PROXIES WILL BE VOTED
(I) FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR OF THE COMPANY, (II) FOR
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2000, 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.
The Board of Directors is not aware of any other business to be presented
for a vote of the stockholders at the Annual Meeting. As permitted by Rule
14a-4(c) under the Securities Exchange Act of 1934, as amended, the persons
named as proxies on the proxy cards will have discretionary authority to vote in
their judgment on any proposals presented by stockholders for consideration as
the Annual Meeting that were submitted to the Company after February 25, 2000.
Such proxies also will have discretionary authority to vote in their judgment
upon the election of any person as a director if a director nominee is unable to
serve for good cause or will not serve, and on matters incident to the conduct
of the Annual Meeting.
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: Charles A. Chesnutt,
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 John L. Pugh have been
nominated for re-election at the Annual Meeting to hold office until the 2003
Annual Meeting of Stockholders or until the election and qualification of their
successors. 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.
The nominees have consented to serve as directors of the Company. In the
unanticipated event that the nominees refuse or are unable to serve as
directors, the persons named as proxies reserve full discretion to vote for such
other persons as may be nominated. The Board of Directors has no reason to
believe that Marilyn R. Marks or John L. Pugh will be unable or will decline to
serve as a director.
2
<PAGE> 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MISS MARKS AND
MR. PUGH. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE
VOTED FOR THE NOMINEES. 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. PUGH.
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
occupation (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. For information concerning membership on Committees of the Board of
Directors, see "Meetings of the Board of Directors and Committees" below. For
information concerning directors' ownership of Common Stock, see "Principal
Stockholders of the Company" below.
NOMINEES FOR DIRECTOR
Class III Nominees for Director
Marilyn R. Marks (age 47), has been the Chairman of the Board of Directors
of the Company since 1987 when she led a leveraged buyout of the Company's
predecessor. Miss Marks also held the position of Chief Executive Officer of the
Company since 1987, until December 1999. Before the leveraged buyout, Miss Marks
held several executive positions with the former parent company, The Dorsey
Corporation, whose shares were listed on the New York Stock Exchange. Currently
Miss Marks serves as Chairman of the Board of Directors and Chief Executive
Officer of TruckBay.com, Inc., an e-commerce start-up venture. Miss Marks serves
as a Director on the Boards of Eastman Chemical Company and Dana Corporation.
John L. Pugh (age 51), joined the Company in December 1999 as Chief
Executive Officer and Director. Prior to joining the Company, Mr. Pugh served as
Executive Vice President of Five Star Food Service, Inc., a food vending and
dining services company. Mr. Pugh has served as the Chief Executive Officer of
Triton Air Holdings, an aviation services and wholesale fuel supply company.
During his tenure with Triton, Mr. Pugh also served as Chief Executive Officer
of Aero Services International, an aviation services company. In addition, he
was previously the President of Poolquip, Inc., a wholesale distributor of
swimming pool equipment and supplies, and the Senior Vice President of
Operations for Hangar One, Inc., an aviation sales and services company.
CONTINUING DIRECTORS
Class I Director Continuing in Office (Term expires 2001)
J. Hoyle Rymer (age 55), 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 and ExecUSource, Inc.,
a consulting and temporary management service firm, since 1996. He was President
of Magic Chef Co., a division of Maytag, Inc., from 1978 to 1988. Mr. Rymer is a
director of AmSouth Bank of Cleveland, Tennessee and Plasti-Line Inc.
Class II Director Continuing in Office (Term expires 2002)
Lawrence E. Mock, Jr. (age 53), 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
3
<PAGE> 7
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.
RETIRING DIRECTOR
During 1999, Mr. Neil A. Springer resigned his position as a Director of
the Company. Mr. Springer had been a director of the Company since 1994. Mr.
Springer's position as a Director of the Company was filled by the appointment
of Mr. John L. Pugh as a director.
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
and Mock, is responsible for reviewing and making recommendations regarding the
Company's employment of independent certified public accountants, the annual
audit of the Company's financial statements and the Company's internal controls,
accounting practices and policies. During 1999, 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 1999,
the Compensation Committee met one time.
During 1999, the Board of Directors met seven 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.
DIRECTOR COMPENSATION
The Company pays non-employee directors an annual retainer of $10,000
payable in cash and $10,000 payable in shares of Common Stock pursuant to the
Dorsey Trailers, Inc. Stock Plan for Non-Employee Directors, as amended in 1998.
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 John L. Pugh, Lorri M.
Palko, Keith Lonergan, Allen Cain and Charles A. Chesnutt.
John L. Pugh (age 51), joined the Company in December 1999 as Chief
Executive Officer and Director. Prior to joining the Company, Mr. Pugh served as
Executive Vice President of Five Star Food Service, Inc, a food vending and
dining services company. Mr. Pugh has served as the Chief Executive Officer of
Triton Air Holdings, an aviation services and wholesale fuel supply company.
During his tenure with Triton, Mr. Pugh also served as Chief Executive Officer
of Aero Services International, an aviation services company. In addition, he
was previously the President of Poolquip, Inc., a wholesale distributor of
swimming pool equipment and supplies, and the Senior Vice President of
Operations for Hangar One, Inc., an aviation sales and services company.
Lorri M. Palko (age 39), joined the Company in November 1997 as President
and Chief Operating Officer. From 1994 until joining the Company, Ms. Palko was
President and Chief Executive Officer of Morgan Corporation, a truck body
manufacturer, and was with Morgan Corporation in various other positions since
1984.
Keith Lonergan (age 45), joined the Company in April 1998 as Elba Plant
Manager and was promoted to Vice President of Manufacturing in December 1999.
Prior to joining the Company Mr. Lonergan was Vice
4
<PAGE> 8
President of Operations of Morgan Corporation, a truck body manufacturer, from
January 1995 until joining the Company. Prior to his position with Morgan
Corporation, Mr. Lonergan was Vice President of Manufacturing with Atlantic
Thermal Plastics Company.
Allen Cain (age 35), rejoined the Company in May 1999 as Director of
Accounting and was promoted to Vice President of Accounting in January 2000. Mr.
Cain was previously with the Company from 1996 until 1999 as Treasurer of the
Company. Prior to rejoining the Company in May of 1999, Mr. Cain was with Ernst
& Young LLP, an international public accounting and services firm, where he
served as a Senior Manager in the firm's mergers and acquisition group. Prior to
his association with the Company, Mr. Cain was Compliance Manager at United
TransNet, Inc., a national transportation delivery company and Arthur Andersen
LLP, an international public accounting and services firm.
Charles A. Chesnutt (age 41), joined the Company in March 1999 as
Treasurer. He was promoted to Vice President of Finance and Treasurer in January
of 2000. Prior to joining the Company, Mr. Chesnutt was with Enfinity
Corporation, a consolidator of commercial heating, ventilation, and air
conditioning services contractors, as Vice President and Treasurer from June
1998 until March 1999. Prior to Enfinity, Mr. Chesnutt was with Andersen
Consulting LLP, an international consulting and services firm, where he served
as a manager. Mr. Chesnutt held various accounting and finance positions from
1988 until 1997 with Rock-Tenn Company, a paperboard products manufacturer.
EXECUTIVE COMPENSATION
The following table presents certain information concerning compensation
earned paid or accrued for services rendered in all capacities during the fiscal
years ended December 31, 1999, 1998, and 1997 by the Company's Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company whose total salary and bonus exceeded $100,000 (collectively, the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS
- --------------------------- ---- -------- ------- -------------
<S> <C> <C> <C> <C>
John L. Pugh.................................... 1999 $285,000 $ -- 75,000 shares
Chief Executive Officer --
Lorri M. Palko.................................. 1999 $265,000 $ -- 15,000 shares
President 1998 265,000 -- --
1997 265,000 -- 75,000 shares
Keith Lonergan.................................. 1999 $135,000 $ -- 10,000 shares
Vice President -- Manufacturing 1998 125,000 -- 15,000 shares
Marilyn R. Marks(1)............................. 1999 $232,000 $ -- --
Chief Executive Officer 1998 232,000 -- --
1997 232,000 -- --
David A. Kemp(2)................................ 1999 $127,720 $75,000 --
Vice President -- Information and 1998 127,720 -- --
Engineering Systems 1997 124,000 -- --
</TABLE>
- ---------------
(1) Miss Marks resigned from her executive officer position with the Company in
December 1999 but remains as Chairman of Board.
(2) Mr. Kemp resigned as an executive officer of the Company in April 1999, but
remains with the Company as its Vice President of Information and
Engineering Systems.
5
<PAGE> 9
EMPLOYMENT AGREEMENT
The Company has entered into an employment agreement with Ms. Palko, who
serves the Company as its President. The employment agreement was amended in
January 2000. The amended agreement terminates as of June 30, 2000, at which
time, Ms. Palko will become an "at will" employee of the Company. Ms. Palko is
guaranteed certain payments and benefits under the amended agreement.
STOCK OPTIONS
Option Grants in the Year-Ended December 31, 1999. The following table
sets forth certain information concerning the grant of options to purchase
Common Stock pursuant to the Company's 1994 Long-Term Incentive Plan to Named
Executive Officers during the year-ended December 31, 1999:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OF FOR OPTION TERM(2)
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME GRANTED(1) YEAR 1999 ($/SH) DATE 5% ($) 10% ($)
- ---- ---------- ---------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Chesnutt................. 10,000 5.1% 1.375 3/8/09 22,397 35,664
Lorri M. Palko (3).................. 15,000 7.6% 2.750 6/30/05 67,192 106,992
Keith Lonergan...................... 10,000 5.1% 2.750 4/26/09 44,795 71,328
Allen Cain.......................... 10,000 5.1% 2.125 5/25/09 30,542 48,633
John L. Pugh........................ 75,000 38.0% 1.250 12/15/09 152,709 243,163
</TABLE>
- ---------------
(1) Options were issued under the Company's 1994 Long-Term Incentive Plan. These
options vest in one-third increments beginning one year after the date of
grant.
(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.
(3) Based on the amended employment agreement, discussed above, all options will
vest upon the expiration of the amended employment agreement (June 30,
2000). The expiration date of the vested options will be extended five years
from the expiration date of the amended employment agreement (June 30,
2000).
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, 1999, and the number and value of options held by such Named Executive
Officers at fiscal year end:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
NUMBER OF DECEMBER 31, DECEMBER 31,
SHARES ACQUIRED VALUE 1999 1999($)(1)
ON EXERCISE REALIZED($) (EXERCISABLE/UNEXERCISED) (EXERCISABLE/UNEXERCISED)
--------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
John L. Pugh........................... -- -- 0/75,000 -- / --
Lorri M. Palko......................... -- -- 50,000/40,000 -- / --
Charles A. Chesnutt.................... -- -- 0/10,000 -- / --
Allen Cain............................. -- -- 0/10,000 -- / --
Keith Lonergan......................... -- -- 5,000/20,000 -- / --
</TABLE>
- ---------------
(1) Based on the closing price on the OTC -- Bulletin Board of the Company's
Common Stock on December 31, 1999 ($1.22). The exercise price of all of the
options to purchase shares of Common Stock was higher than the fair market
value of the Common Stock as of December 31, 1999 and thus such options were
"out of the money" as of such date.
6
<PAGE> 10
RETIREMENT 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 in U.S. dollars 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)
- --------------- ------- -------- --------
<S> <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 a participant is 1.35% of the first $6,000 of the participant's
remuneration and 2% of the participant's remuneration in excess of $6,000 both
multiplied by the participant's 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, 1999, Mr. Pugh had an average five-year compensation of
$285,000 and less than one year of credited service; Ms. Palko had an average
five-year compensation of $265,000 and twenty-six months of credited service;
Mr. Kemp had an average five-year compensation of $125,880 and eight years of
credited service.
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>
DORSEY TRAILERS, INC. THE NASDAQ STOCK MARKET PEER INDEX
--------------------- ----------------------- ----------
<S> <C> <C> <C>
7/28/94 100.00 100.00 100.00
12/31/94 116.30 106.40 94.40
12/31/95 40.40 150.30 109.30
12/31/96 25.00 185.10 121.30
12/31/97 19.70 227.20 156.30
12/31/98 7.70 318.80 138.40
12/31/99 9.40 591.60 137.60
</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 1999, the Board of Directors relied primarily upon the advice of
Miss Marks in determining salaries for executive officers. For 1999, Mr. Pugh's
annual salary was $285,000. Mr. Pugh joined the Company in December 1999 as
Chief Executive Officer. Prior to that time Miss Marks served as Chief Executive
Officer of the Company. For 1999, Miss Marks' annual salary was $232,000. The
1999 compensation of Mr. Pugh and Miss Marks, who both served as the Company's
Chief Executive Officer during 1999, was reviewed to determine that the salary
was not in excess of salaries paid by other manufacturing enterprises of similar
size within the geographic area. Miss Marks' salary had remained the same level
for 1997, 1998, and 1999.
Bonus Plan. Executive officers are also 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 executive officers to increase the value of the Company in a
manner that also increases the value of the Company for its stockholders.
8
<PAGE> 12
Under the bonus plan adopted by the Board of Directors for 1999, executive
officers were eligible to receive a bonus ranging from 10% to 25% of their base
salaries depending on the level of pretax earning achieved by the Company. No
bonuses under this plan were awarded to Named Executive Officers under this plan
for the year ended December 31, 1999.
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. During 1999, the Committee
granted six stock options for an aggregate of 127,500 shares of Common Stock to
Named Executive Officers as of December 31, 1999.
Other Compensation Plans. The Company maintains several broadly 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
are also 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 $1.0 million
to each of the Named Executive Officers. Certain performance-based compensation
is, however, exempted from the deduction limit. For 1998, the Committee did not
take section 162(m) into account as no executive was near the $1.0 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 28, 2000
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Mock and Rymer served as members of the Compensation Committee
throughout 1999. During 1999, the Company paid ExecUSource, Inc., a consulting
and temporary management service firm, $71,586 for professional services.
ExecUSource, Inc., is an S-Corporation of which Mr. Rymer, a director of the
Company, is a fifty-percent owner.
CERTAIN TRANSACTIONS
The following is a summary of certain transactions entered into between the
Company and certain of its executive officers and directors:
Marilyn R. 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,
1999, the principal balance of the SBA Loan was $6,653,000.
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 which is wholly-owned by Marilyn R. Marks, former Chief Executive
Officer of the Company. The Company 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 were no less
favorable than terms that could have been obtained from unaffiliated parties.
There were no such transactions subsequent to March 28, 1997.
9
<PAGE> 13
The Company was granted a warrant to purchase 4,250,000 shares of common
stock of TruckBay.com, Inc., a Georgia corporation, for $0.00021 per share. The
warrant was granted on June 21, 1999 and expires on June 21, 2004. The Company
was granted this warrant due to its contribution of intellectual capital to
TruckBay.com, Inc. The current or future value of the warrant is not
determinable at this time. Marilyn R. Marks, who serves the Company as Chairman
of the Board of Directors and was formerly Chief Executive Officer of the
Company, is the Chairman of the Board of Directors and Chief Executive Officer
and a principal shareholder of TruckBay.com, Inc.
During 1999, the Company paid Springer & Associates, an executive placement
firm, $38,128 for assistance in recruiting executive officers. Mr. Springer, a
former director of the Company, is a partner in Springer & Associates.
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth information with respect to the beneficial
ownership of shares of Common Stock as of March 10, 2000 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)......................................... 1,433,854(4) 28.5%
Lorri M. Palko.............................................. 65,000(5) 1.3%
Charles A. Chesnutt......................................... -- *
David A. Kemp............................................... 50,067(6) 1.0%
Allen Cain.................................................. 160(7) *
John L. Pugh................................................ -- *
Lawrence E. Mock, Jr. ...................................... 13,546(8) *
J. Hoyle Rymer(2)........................................... 387,525(9) 7.6%
Keith Lonergan.............................................. 5,000(10) *
T. Charles Chitwood(3)...................................... 351,152 7.0%
All directors and executive officers as a group (9
persons).................................................. 1,955,152(11) 38.8%
</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) The named person's address is 1412 Waterford Greenway, Marietta, Georgia
30068. Mr. Chitwood retired from his position with the Company in September
1997.
(4) Of these shares, 143,106 shares are subject to stock options issued by Miss
Marks, all of which are currently exercisable. Not included in the amount
above is 95,833 shares of Common Stock owned by the Marilyn R. Marks
Foundation as to which Miss Marks disclaims beneficial ownership of the
Common Stock.
(5) Consists of 15,000 shares owned individually and on vested options to
purchase 50,000 shares of Common Stock granted by the Company.
(6) Consists of 31,000 shares owned individually and vested options to purchase
19,067 shares of Common Stock granted by Miss Marks.
(7) Includes 160 shares owned individually.
(8) Includes 200 shares held by Mr. Mock as custodian for his children.
10
<PAGE> 14
(9) Includes 150,000 shares of Common Stock held by Mr. Rymer as trustee for
his children as to which he has sole investment power
(10) Consists of vested options to purchase shares of Common Stock granted by
the Company.
(11) Includes 19,067 shares of Common Stock that are currently held by Miss
Marks, but are subject to options held by executive officers and directors.
PROPOSAL II
APPROVAL OF SELECTION OF AUDITORS
The Company's Board of Directors, at the recommendation of the Audit
Committee, has selected PricewaterhouseCoopers LLP to conduct the annual audit
of the financial statements of the Company for the year ending December 31,
2000. PricewaterhouseCoopers LLP also audited the Company's financial statements
for 1999. PricewaterhouseCoopers 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 independent auditors.
The ratification by the stockholders of the selection of
PricewaterhouseCoopers 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 many 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, 2000.
The Audit Committee, approves in advance all material non-audit services to
be provided by PricewaterhouseCoopers LLP and believes that these services have
no effect on audit independence.
Representatives of PricewaterhouseCoopers 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 PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 2000. RATIFICATION OF PRICEWATERHOUSECOOPERS 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 2001 must be received by the
Company at Dorsey Trailers, Inc., One Paces West, Suite 1700, 2727 Paces Ferry
Road, Atlanta, Georgia 30339, Attention, Secretary, on or before November 21,
2000. Only proper proposals which are timely received will be included in the
Proxy Statement and Proxy. Stockholders may intend to present a proposal from
the floor of the 2001 Annual Meeting, and they may commence their own proxy
solicitation, rather than having the proposal included in the Company's 2001
Annual Meeting proxy statement. Under the Company's Bylaws, the Company must
receive notice of any such Stockholder proposal at least sixty (60) days prior
to the 2001 Annual Meeting in order for the notice to be timely. If the Company
does not receive timely notice of the Stockholder proposal, the Company will
retain discretionary voting authority over the proxies returned by Stockholders
for the 2001 Annual Meeting with respect to such Stockholder proposal.
Discretionary voting authority is the ability to vote proxies that Stockholders
have executed and returned to the Company, on matters not specifically reflected
on the proxy card, and on which Stockholders have not had an opportunity to vote
by proxy.
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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
11
<PAGE> 15
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 Form
5 reports were required, the Company believes that during 1999 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 mail, 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, 1999. 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: CHARLES A. CHESNUTT, SECRETARY.
12
<PAGE> 16
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 Charles
A. Chesnutt or either one of them, proxies, each with full power of
substitution, for and in the name of the undersigned, to vote the number of
shares of Common Stock which the undersigned would be entitled to vote if
personally present at the 2000 Annual Meeting of Stockholders to be held at One
Paces West, 2727 Paces Ferry Road, Atlanta, Georgia, on Tuesday, April 25, 2000
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 March 28, 2000, the receipt of
which is acknowledged, unless otherwise specified herein. The proxies, in their
discretion, are further authorized to vote for the election of any persons to
the Board of Directors if a nominee named herein is unable to serve or for good
cause will not serve, and are further authorized to vote on other matters which
may come before the Annual Meeting and any adjournments thereof, including
matters incident to the conduct of the meeting. The Board of Directors
recommends a vote FOR Proposals 1, and 2.
1. ELECTION OF DIRECTORS. On the proposal to elect the following persons to
serve as a Class III Director for a three-year period and until her or his
successor is elected and qualified:
Marilyn R. Marks
<TABLE>
<S> <C>
[ ] FOR THE NOMINEE LISTED [ ] WITHHOLD AUTHORITY TO VOTE FOR THE NOMINEE LISTED
</TABLE>
John L. Pugh
<TABLE>
<S> <C>
[ ] FOR THE NOMINEE LISTED [ ] WITHHOLD AUTHORITY TO VOTE FOR THE NOMINEE LISTED
</TABLE>
2. RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. On the proposal
to ratify the selection of PricewaterhouseCoopers LLP as independent certified
public accountants for the year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 17
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
IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS. THIS PROXY WILL
ALSO BE VOTED WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY COME
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF.
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 partnership, please sign in partnership name by
authorized person.
Shares Held:
------------------------------------------
------------------------------------------
Signature of Stockholder
------------------------------------------
Signature of Stockholder (If held Jointly)
Dated:
------------------------------------- 2000
Month Day
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.
