<PAGE> 1
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:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
CIRCLE INTERNATIONAL GROUP, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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1
<PAGE> 2
LOGO
CIRCLE INTERNATIONAL GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MONDAY, MAY 11, 1998, 10:30 A.M.
TO THE STOCKHOLDERS:
Please be advised that the Annual Meeting of Stockholders of Circle
International Group, Inc. will be held at the office of the Company, 260
Townsend Street, San Francisco, California, on Monday, May 11, 1998, at 10:30
a.m. for the following purposes:
(1) To elect two Class I directors.
(2) To approve the amendment of the 1994 Omnibus Equity Incentive Plan to
increase the number of shares authorized for issuance thereunder by
500,000.
(3) To transact such other business as may properly come before the
meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 27, 1998, will be entitled to vote at the meeting and any adjournment
thereof.
San Francisco, California
April 1, 1998
BY ORDER OF THE BOARD OF DIRECTORS
Robert H. Kennis
--------------------------------------
General Counsel and Secretary
YOUR VOTE IS IMPORTANT. STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 3
CIRCLE INTERNATIONAL GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Circle
International Group, Inc. (the "Company") to be used at the Annual Meeting of
Stockholders on May 11, 1998, for the purposes set forth in the foregoing
notice. This proxy statement and the enclosed form of proxy were first sent to
stockholders on or about April 1, 1998.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form accompanying
this Proxy Statement has the power to revoke it prior to or at the Annual
Meeting. A proxy may be revoked by a writing delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy, or by attendance at the Annual Meeting and
voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 27, 1998, will be entitled to vote at the Annual Meeting.
As of the close of business on March 27, 1998, there were outstanding
16,254,814 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions and
broker non-votes as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of any matter submitted to the stockholders for a vote. With regard
to the election of directors, votes may be cast "For" or "Withhold Authority"
for each nominee; votes that are withheld will be excluded entirely from the
vote and will have no effect. Item 2 (the proposal to amend the 1994 Omnibus
Equity Incentive Plan) requires the affirmative vote of a majority of shares
present in person or by proxy and entitled to vote. Accordingly, abstentions on
Item 2 will have the effect of a negative vote on this item. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
Therefore, a broker non-vote will have no effect on Item 2 which requires the
affirmative vote of a majority of shares represented at the Annual Meeting and
entitled to vote thereon.
ELECTION OF DIRECTORS
The Certificate of Incorporation and By-laws of the Company provide for a
Board of Directors consisting of not less than three members, divided into three
classes. The size of the Board of Directors may be determined subject to the
foregoing minimum from time to time by the Board of Directors of the Company.
The size of the Board of Directors has currently been established at seven.
Directors elected into a class at the annual meeting of stockholders in
each year serve three-year terms and until their successors have been duly
elected. Directors appointed by the Board of Directors of the Company to fill
vacancies or newly created directorships serve for the remainder of the term of
the class to which they are appointed. The Class I directors elected at the
Annual Meeting will serve until the 2001 Annual Meeting; Class II directors
elected at the 1996 Annual Meeting will serve until the 1999 Annual
<PAGE> 4
Meeting; and Class III directors elected at the 1997 Annual Meeting will serve
until the 2000 Annual Meeting.
The persons named below are the nominees to serve as Class I directors
until the 2001 Annual Meeting of Stockholders and until their successors have
been elected or until death, retirement, resignation or removal. The nominees
presently serve as Class I directors.
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of such nominees
to the Board of Directors. If either of such nominees is unable or unwilling to
be a candidate for the office of director at the date of the Annual Meeting, or
any adjournment thereof, the proxies will vote for such substitute nominee as
shall be designated by the proxies. The management has no reason to believe that
such nominees will be unable or unwilling to serve if elected as directors. Set
forth below is certain information concerning the nominees which is based on
data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND DIRECTOR
NOMINEES FOR DIRECTOR AGE OTHER INFORMATION SINCE
- --------------------- --- ---------------------------------------------- ---------
<S> <C> <C> <C>
Peter Gibert 55 Chairman of the Board of Directors, President 1992
and Chief Executive Officer. From February
1984 to May 1991, Mr. Gibert was President and
Chief Executive Officer of Darrell J. Sekin
and Co. (international freight forwarder).
Edwin J. Holman 51 Chairman and Chief Executive Officer of 1995
Petries Retail, Inc. (operator of retail
stores). From 1993 to 1995, Mr. Holman was
President and Chief Operating Officer of
Woodward and Lothrop, Inc. (department stores
located in the Mid-Atlantic region). From 1981
to 1993, Mr. Holman was an officer of Carter
Hawley Hale Stores, Inc., most recently Vice
Chairman and Chief Operating Officer.
</TABLE>
2
<PAGE> 5
Set forth below is certain information concerning the other directors which
is based on data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND DIRECTOR
CONTINUING DIRECTORS AGE OTHER INFORMATION SINCE
- -------------------- --- ---------------------------------------------- ---------
<S> <C> <C> <C>
Wesley J. Fastiff 65 President of Littler Mendelson, a law firm 1971
which was retained by the Company to perform
legal services in 1997.
John M. Kaiser 58 Private businessman. From 1979 to 1988, Mr. 1993
Kaiser was President of Expeditors
International of Washington, Inc.
(international freight forwarder).
John M. Lillie 61 Chairman of the Board of Directors of The Epic 1997
Team (bicycles and accessories). Mr. Lillie
was Chairman and Chief Executive Officer of
American President Companies, Ltd.
(transportation company) from 1992 to 1995.
Mr. Lillie is a director of The Gap, Inc.
(specialty retailer), Walker Interactive
(software), and Consolidated Freightways
(transportation company).
Ray C. Robinson, Jr. 77 Private businessman. Mr. Robinson served as 1971
Secretary of the Company from 1971 until
January 1986.
Frank J. Wezniak 65 Vice President, O'Connor, Wright, Wyman 1987
(investment banking). From 1994 to 1997, Mr.
Wezniak was President and Chief Executive
Officer of Karri Technology, Inc.
(manufacturer of information collection
systems). From 1987 to 1992, Mr. Wezniak was
President of Computer Identics (manufacturer
of bar code and data collection information
systems).
</TABLE>
3
<PAGE> 6
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1997, the Board of Directors held seven meetings. The Company has an
Audit Committee, a Human Resources, Compensation and Nominating Committee and a
Strategic Planning and Mergers and Acquisitions Committee.
The members of the Audit Committee are Edwin Holman (Chairman), John M.
Kaiser, John M. Lillie and Frank J. Wezniak. Among the functions performed by
the Audit Committee are to make recommendations to the Board of Directors with
respect to the engagement or discharge of independent auditors, to review with
the independent auditors the plan and results of the auditing engagement, to
review the Company's auditing procedures and system of internal accounting
controls and to make inquiries into matters within the scope of its functions.
During 1997, the Audit Committee held six meetings.
The members of the Human Resources, Compensation and Nominating Committee
are John M. Kaiser (Chairman), Wesley J. Fastiff, Ray C. Robinson, Jr., and
Frank J. Wezniak. Among the functions of the Human Resources, Compensation and
Nominating Committee are to propose nominees for membership on the Board of
Directors, review and make recommendations to the Board of Directors concerning
the compensation of the key management employees of the Company and administer
the Company's stock option plans. During 1997, the Human Resources, Compensation
and Nominating Committee held seven meetings.
The members of the Strategic Planning and Mergers and Acquisitions
Committee are Peter Gibert (Chairman), Edwin Holman, John M. Kaiser, John M.
Lillie, Ray C. Robinson, Jr., and Wesley J. Fastiff. Among the functions of the
Strategic Planning and Mergers and Acquisitions Committee are to review and make
recommendations to the Board of Directors concerning proposed or potential
acquisitions, mergers, joint ventures, or other business combinations, and to
consult with management regarding acquisition strategy. During 1997, this
Committee held one meeting.
COMPENSATION OF DIRECTORS
Directors are paid directors fees consisting of $13,000 per year and $750
for each Board meeting attended. Directors who attend meetings of the Audit
Committee, Strategic Planning and Mergers and Acquisitions Committee or Human
Resources, Compensation and Nominating Committee receive an additional $500 for
each meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the Company retained the law firm of Littler Mendelson to
perform legal services for it. Mr. Fastiff, a director of the Company and a
member of the Human Resources, Compensation and Nominating Committee, serves as
president of Littler Mendelson.
PROPOSAL TO AMEND THE 1994 OMNIBUS EQUITY INCENTIVE PLAN
At the Annual Meeting held in May 1994 the stockholders of the Company
adopted the 1994 Omnibus Equity Incentive Plan (the "Plan") pursuant to which an
aggregate of 750,000 shares of the Company's Common Stock were originally
reserved for issuance to key employees and consultants of the Company and its
subsidiaries. At the 1996 Annual Meeting, the stockholders approved an amendment
to the Plan to increase the number of shares authorized for issuance under the
Plan by 1,250,000 shares. On March 5, 1998, the Board of Directors of the
Company conditionally amended the Plan, subject to stockholder approval at the
1998 Annual Meeting, to increase the number of shares authorized for issuance
under the Plan by an additional 500,000 shares.
The reason for this increase is to ensure that a sufficient number of
shares of the Company's Common Stock is available under the Plan for awards to
attract, retain and motivate selected employees with
4
<PAGE> 7
outstanding experience and ability. As of March 6, 1998, there were 379,025
shares remaining for awards under the Plan, which would increase to 879,025 if
the proposal is approved. In addition, as of such date, options to purchase
128,154 shares of Common Stock were outstanding under two prior stock option
plans, and options to purchase 228,800 shares remained available for future
grants under one of these prior plans. One of the prior plans has expired and
the other prior plan has not been used following the adoption of the Plan. Set
forth below is a summary of certain of the principal features of the Plan.
GENERAL
The Plan provides for the granting of stock options, stock appreciation
rights ("SARs"), restricted stock awards, performance unit awards and
performance share awards (collectively, "Awards") to key employees and
consultants of the Company and its subsidiaries.
PURPOSE
The purpose of the Plan is to promote the success, and enhance the value,
of the Company by linking the personal interests of participating employees and
consultants to those of the Company's stockholders and by providing such
employees and consultants with an incentive for outstanding performance. The
Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of participating employees and
consultants upon whose judgment, interest and special efforts the Company is
largely dependent for the successful conduct of its operations.
ADMINISTRATION
The Plan is administered by the Human Resources, Compensation and
Nominating Committee of the Board of Directors of the Company (the "Committee").
OPTIONS
The price of the shares of the Company's Common Stock subject to each
option (the "option price") is set by the Committee but may not be less than 50%
of the fair market value on the date of grant in the case of an option that is
not an incentive stock option (a "nonqualified stock option"), and not less than
100% of the fair market value in the case of an incentive stock option. To date,
no options have been granted below fair market value under the Plan.
Options granted under the Plan are exercisable at the times and on the
terms established by the Committee, provided that options granted to officers
who are subject to section 16(b) of the Securities and Exchange Act of 1934 (the
"Exchange Act") may not be exercised until six months following the date of
grant. Subject to the foregoing limitation, the Committee may accelerate the
exercisability of any option.
The option price must be paid in full in cash or its equivalent at the time
of exercise. The Committee also may permit payment of the option price by the
tender of previously acquired shares of the Company's stock or such other legal
consideration which the Committee determines to be consistent with the Plan's
purpose and applicable law.
STOCK APPRECIATION RIGHTS
The Plan permits the grant of three types of SARs: Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof, none of which have
been granted under the Plan thus far. An Affiliated SAR is an SAR that is
granted in connection with a related option and which will be deemed to
automatically be exercised simultaneously with the exercise of the related
option. A Freestanding SAR is an SAR that is granted independently of any
options. A Tandem SAR is an SAR that is granted in connection with a related
option, the exercise of which requires a forfeiture of the right to purchase a
share under the related option (and when a share is purchased under the option,
the SAR is similarly cancelled).
The Committee has complete discretion to determine the number of SARs
granted to any optionee or recipient and the terms and conditions pertaining to
such SARs. However, the grant price must be at least
5
<PAGE> 8
equal to the fair market value of a share of the Company's Common Stock on the
date of grant in the case of a Freestanding SAR and equal to the option price of
the related option in the case of an Affiliated or Tandem SAR. An SAR that is
granted to an officer who is subject to section 16(b) of the Exchange Act
("Section 16(b)") may not be exercised until at least six months following the
date of grant. To date, the Company has not made an SAR award.
RESTRICTED STOCK AWARDS
The Plan permits the grant of restricted stock awards which are restricted
Common Stock bonuses that vest in accordance with terms established by the
Committee. Restricted Stock granted to an officer subject to Section 16(b) may
not vest prior to six months following the date of its grant. The Committee may
impose restrictions and conditions on the shares, including, without limitation,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional and/or individual), and/or restrictions under
applicable federal or state securities laws. The Committee may accelerate the
time at which any restrictions lapse, and/or remove any restrictions.
PERFORMANCE UNIT/SHARE AWARDS
The Plan permits the grant of performance unit and performance share awards
which are bonuses credited to an account established for the recipient and
payable in cash, Common Stock, or a combination thereof. Each performance unit
has an initial value that is established by the Committee at the time of its
grant. Each performance share has an initial value equal to the fair market
value of a share of the Company's Common Stock on the date of its grant. The
number and/or value of performance units/shares that will be paid out to
recipients will depend upon the extent to which performance goals established by
the Committee are satisfied. The payment date for performance unit/share awards
granted to officers and directors subject to Section 16(b) may not be less than
six months from the date of grant.
After a performance unit/share award has vested, the recipient will be
entitled to receive a payout of the number of performance units/shares earned by
the recipient, to be determined as a function of the extent to which the
corresponding performance goals have been achieved. The Committee also may waive
the achievement of any performance goals for such performance unit/share award.
Subject to the applicable award agreement, performance units/shares awarded
to recipients will be forfeited to the Company upon the earlier of the
recipient's termination of employment or the date set forth in the award
agreement. To date, the Company has not made a performance unit/share award.
NONTRANSFERABILITY OF AWARDS
Awards granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
applicable laws of descent and distribution. However, an optionee or recipient
may designate one or more beneficiaries to receive any exercisable or vested
awards following his or her death.
NEW PLAN BENEFITS
Regulations adopted by the Securities and Exchange Commission require
disclosure of benefits to the executive officers of the Company named in the
summary compensation table and to certain other categories of award recipient,
if such benefits are determinable. In addition to the grants of stock options
set forth below, it is likely that substantial additional grants will be made to
such persons and others during the life of the Plan, and it is impossible to
determine the amount or terms of such future grants.
6
<PAGE> 9
The following table sets forth as of February 28, 1998 (a) the aggregate
number of shares of the Company's Common Stock subject to awards granted under
the Plan since January 1, 1997, and (b) the dollar value of such awards based on
the difference between the exercise prices and $28.25 per share, the closing
price for the shares of Common Stock on February 28, 1998.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR VALUE
OPTIONS OF OPTIONS
NAME OF INDIVIDUAL OF GROUP GRANTED GRANTED
--------------------------- --------- ------------
<S> <C> <C>
Peter Gibert......................................... 100,000 $ 162,500
Steven D. Leonard.................................... 0 $ 0
Robert J. Diaz....................................... 15,000 $ 41,250
Kim E. Wertheimer.................................... 15,000 $ 24,375
Robert H. Kennis..................................... 10,000 $ 63,750
All executive officers, as a group................... 140,000 $ 291,875
All employees who are not executive officers, as a
group.............................................. 268,350 $1,015,453
All directors who are not executive officers, as a
group.............................................. 0 $ 0
</TABLE>
REQUIRED VOTE
The affirmative vote of a majority of shares present in person or by proxy
at the Annual Meeting and entitled to vote is required to approve the proposed
amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE PLAN.
7
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the last three fiscal years is set
forth below.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
----------------------------------------- -----------------------
RESTRICTED SECURITIES ALL OTHER
OTHER ANNUAL STOCK UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($) OPTIONS(#) TION($)(2)
--------------------------- ---- --------- -------- ------------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter Gibert............................ 1997 $375,000 $185,000 $122,850(3) -- 100,000 $4,750
Chairman, President and 1996 375,000 150,000 118,000(3) -- 60,000 4,750
Chief Executive Officer 1995 240,000 43,000 113,000(3) -- -- 3,400
Steven D. Leonard....................... 1997 275,000 -- -- -- -- 4,100
Former Officer 1996 225,000 100,000 198,000(4) -- 125,000 --
Robert J. Diaz.......................... 1997 210,000 90,000 58,000(5) -- 15,000 4,750
Senior Vice President, 1996 210,000 75,000 61,600(5) -- -- 4,750
Chief Financial Officer and Treasurer 1995 210,000 69,000 97,600(6) -- -- 2,900
Kim E. Wertheimer....................... 1997 168,500 127,500 -- 1,200(7) 15,000 4,750
Vice President 1996 168,500 100,000 -- -- 15,000 4,750
1995 166,000 100,000 -- -- 15,000 4,900
Robert H. Kennis........................ 1997 155,000 82,500 -- 360(7) 10,000 4,750
Vice President, Secretary 1996 145,000 70,000 -- -- 10,000 4,750
and General Counsel 1995 140,000 70,000 -- -- 17,500 4,750
</TABLE>
- ---------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1995, 1996 and 1997 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus.
(2) The amounts shown consist of Company contributions under the Company's
Profit Saving Plan which has been qualified under sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, and covers employees who
voluntarily enroll in the Plan the quarter after completing six months of
continuous service with the Company.
(3) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and compensation for its tax impact, as well as directors fees
(consisting of $24,000, $19,000, and $19,000 in fiscal years 1997, 1996 and
1995).
(4) Represents a relocation allowance and compensation for its tax impact.
(5) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and compensation for its tax impact.
(6) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and compensation for its tax impact ($45,600) and relocation
expenses reimbursed by the Company ($52,000).
(7) Represents payment for certain accrued and unused vacation hours pursuant to
a buy-down program offered to all employees possessing a certain amount of
vacation hours. The fair market value of these shares was determined by the
Company to be $21 per share when the buy-out program was announced. All such
shares vest on July 15, 1998 if the recipient is employed with the Company
on that date.
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<PAGE> 11
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during 1997 to the executive officers named in the foregoing Summary
Compensation Table.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR OPTION
UNDERLYING OPTIONS GRANTED EXERCISE OR TERM(4)
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
---- ---------- ---------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert........... 100,000 23.8% $26.63 2005 $1,271,225 $3,044,805
Steven D. Leonard...... -- -- -- -- -- --
Robert J. Diaz......... 15,000 3.6% $25.50 2005 $ 182,627 $ 437,423
Kim E. Wertheimer...... 15,000 3.6% $26.63 2005 $ 190,684 $ 456,721
Robert H. Kennis....... 10,000 2.4% $21.87 2005 $ 104,443 $ 250,160
</TABLE>
- ---------------
(1) All option awards granted to the named executives in fiscal 1997 are
exercisable in annual increments of 25%, commencing one year from date of
grant, except for options granted to Peter Gibert to purchase an aggregate
of 100,000 shares which are exercisable in annual increments of 50%
commencing one year from date of grant. Under the terms of the Company's
stock option plans, the Human Resources, Compensation and Nominating
Committee retains discretion, subject to plan limits, to modify the terms of
outstanding options.
(2) All options were granted at fair market value at date of grant.
(3) All options granted in fiscal 1997 were granted for a term of eight years.
(4) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% and 10%
rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
The following table sets forth certain information with respect to option
exercises during 1997 and stock options held by each of the Company's executive
officers as of December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
SHARES --------------------- --------------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------- -------------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
Peter Gibert..................... -- -- 67,500/130,000 $428,925/$168,750
Steven D. Leonard................ 41,750 $386,188 0/ 25,000 $ 0/$129,700
Robert J. Diaz................... 15,000 $221,875 22,500/ 29,500 $210,105/$111,725
Kim E. Wertheimer................ -- -- 37,250/ 43,250 $276,403/$131,461
Robert H. Kennis................. 7,500 $ 93,435 29,500/ 34,000 $228,734/$158,079
</TABLE>
9
<PAGE> 12
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Peter Gibert, which has been
extended through December 31, 2001, pursuant to which Mr. Gibert is employed as
the Company's President and Chief Executive Officer. Under the terms of this
agreement, Mr. Gibert receives a minimum salary of $31,250 per month for
calendar years 1997 and 1998, and a minimum salary of $22,917 per month
thereafter. The employment agreement provides for a bonus for year-end 1997
which is determined as follows: if the Company's earnings per share ("EPS") for
the calendar year are less than an 11% increase over the preceding year, any
bonus paid is subject to the discretion of the Board of Directors; if the EPS
increase over the preceding year is between 11% and 15%, then Mr. Gibert is
entitled to a minimum annual bonus of 20% of his base salary; if the EPS
increase is 16% to 20% over the preceding year the minimum bonus will be 40% of
base salary; if the EPS increase over the preceding year is 21% or more, then
the minimum bonus will be 50% of base salary. The bonus formula for years after
1997 has not yet been determined, but will provide for a minimum annual bonus of
$100,000. The agreement with Mr. Gibert provides for severance pay equal to the
base salary and minimum bonus obligation through the remaining term of the
agreement in the event that Mr. Gibert's employment is terminated for a reason
other than for cause.
The Company also has an employment agreement with Kim Wertheimer, expiring
upon twelve months notice. Under the terms of this agreement, Mr. Wertheimer is
entitled to a minimum salary of $14,000 per month and a bonus equal to the
greater of (i) $45,000 or (ii) .25 of 1% of the Company's income from operations
if the Company's income from operations is at least 110% of the previous year's.
The agreement with Mr. Wertheimer provides for an annual grant of options to
purchase 15,000 shares of Common Stock for three years, the payment of moving
expenses up to $20,000 and a $100,000 loan for relocation expenses to be
forgiven over five years as long as Mr. Wertheimer remains an employee of the
Company.
The agreement with Mr. Wertheimer also provides for the continuation of his
salary for up to 12 months in the event of termination of employment without
cause. The Company also has commitments to Robert Diaz and Robert Kennis to
provide for continuation of their salaries for up to 12 months in the event of
termination of employment without cause.
The Company entered into an agreement with Steven Leonard prior to his
termination of employment providing for certain consulting and non-solicitation
obligations through July 31, 1998. In exchange the Company agreed to pay certain
of Mr. Leonard's medical and life insurance premium costs, to defer payment to
July 31, 1998 of a promissory note obligation to the Company and, under certain
circumstances, to allow the exercise in the future of options to purchase 25,000
shares of stock previously awarded to Mr. Leonard. As of December 31, 1997 the
unpaid principal and interest on the note aggregated $271,700.
TRANSACTIONS WITH THE COMPANY
In February 1989, Peter Gibert executed a Promissory Note (the "Note") in
the principal amount of $717,944 in favor of Darrell J. Sekin & Co. ("Sekin").
The Note provided bi-monthly payments of principal and interest (accruing
annually at 9.25%) and a maturity date of February 15, 1994. Payments under the
Note terminated in May 1991 when the Company acquired all of the outstanding
shares of Sekin. In June 1993, the Company agreed to defer the payments of
principal and interest until the termination of the employment agreement between
Mr. Gibert and the Company which is described above. Additionally, the interest
rate on the Note was reduced to 5% effective June 1993. As of December 31, 1997,
unpaid principal and accrued interest on the Note aggregated $226,350.
In August 1994, the Company agreed to forgive annually $50,000 of the
amount due under the Note on the condition that Mr. Gibert is an employee of the
Company. The interest rate on the Note was increased to 5.7% effective August
1994. The entire balance owed under the Note will be forgiven in the event Mr.
Gibert's employment with the Company is terminated, unless such termination is
with cause in which case the entire balance becomes due and owing. During 1997,
$50,000 due under the Note was forgiven.
In connection with Robert Diaz joining the Company in December 1994 and
relocating from Denver, Colorado the Company loaned Mr. Diaz $120,000 at an
annual interest rate of 6%. The loan is evidenced by a
10
<PAGE> 13
promissory note, which provides that payment shall not be due as long as Mr.
Diaz is employed with the Company, and that commencing April 1995, $25,000 shall
be forgiven annually until the entire amount of the note is forgiven. The
balance outstanding under the note is accelerated and immediately due if Mr.
Diaz' employment is terminated under certain circumstances. As of December 31,
1997, the unpaid principal and accrued interest on the note aggregated $49,000.
On May 15, 1997 Kim Wertheimer executed a Promissory Note in the principal
amount of $100,000 bearing interest at 6% per annum. The note provides that
payment shall not be due as long as Mr. Wertheimer is employed by the Company,
and that commencing May 1998, 20% of the outstanding balance will be forgiven
annually until the entire amount of the note is forgiven. The balance
outstanding under the note is accelerated and immediately due if Mr.
Wertheimer's employment is terminated under certain circumstances. As of
December 31, 1997, the unpaid principal and accrued interest on the note
aggregated $104,000.
Additionally, on October 1, 1997 the Company advanced $75,000 to Robert
Kennis evidenced by a Promissory Note bearing interest at 7% per annum. The note
provides for payment of principal and interest in four equal annual
installments. As of December 31, 1997, the unpaid principal and accrued interest
on the note aggregated $76,300.
HUMAN RESOURCES, COMPENSATION AND NOMINATING COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources, Compensation and Nominating Committee (the
"Committee") of the Board of Directors is composed entirely of independent
directors, none of whom is an officer or employee of the Company or any of its
subsidiaries. The Committee is responsible for establishing the Company's
compensation policies, administering the Company's stock option plans, and
reviewing the Company's salary, profit sharing and incentive arrangements
generally. In addition, the Committee reviews the compensation levels of the
executive officers of the Company, including the Chief Executive Officer, and
evaluates their performance. The Committee reviews with the Board the
significant aspects of compensation for the executive officers of the Company.
In discharging our responsibilities as members of the Human Resources,
Compensation and Nominating Committee, our objective is to establish policies
which will enhance the long-term performance and growth of the Company, enable
the Company to attract and retain outstanding executives and employees, and
provide meaningful incentives without subjecting the Company to excessive costs.
The Company has historically relied principally on cash payments in the form of
salary and incentive payments to motivate its key executives and managers, and
additionally on employee stock options.
The compensation policy of the Company, which is endorsed by the Committee,
is that a substantial portion of the annual compensation of each officer should
relate to and be contingent upon the performance of the Company, as well as the
individual contribution of each officer. As a result, a substantial portion of
each executive officer's compensation is "at risk" in the form of incentive
compensation, which is awarded based on performance of the individual and the
Company (or the appropriate business unit managed by the executive officer) for
the year in question. The determination of incentive compensation is based on a
qualitative evaluation of the individual's contribution to the Company's
performance, and is also tied to meeting or exceeding the previous year's
financial results.
Amendments to Section 162(m) of the Internal Revenue Code have eliminated
the deductibility of most compensation over a million dollars in any given year.
The Committee believes that it is highly unlikely that any of the Company's
executive officers would be eligible at any time in the foreseeable future to
receive compensation of more than a million dollars. However, the Committee
believes that it is important to retain the flexibility to maximize the
Company's tax deductions. Accordingly, it will be the policy of this Committee
to consider the impact, if any, of Section 162(m) on the Company and to document
as necessary specific performance goals and take all other reasonable steps in
order to seek to preserve the Company's tax deductions.
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<PAGE> 14
Peter Gibert's base salary for 1997 was based on his rights under his
amended employment agreement with the Company (the "Employment Agreement")
described in the Company's proxy statement under the caption "Employment
Agreements."
Under the terms of this agreement, Mr. Gibert's base salary is established
at $31,250 per month through December 31, 1998. Mr. Gibert's bonus plan is as
follows: if the Company's earnings per share ("EPS") for the calendar year are
less than an 11% increase over the preceding year, any bonus paid is subject to
the discretion of the Board of Directors; if the EPS increase over the preceding
year is between 11% and 15%, then Mr. Gibert is entitled to a minimum bonus of
20% of his base salary; if the EPS increase is 16% to 20% over the preceding
year the minimum bonus will be 40% of base salary; if the EPS increase over the
preceding year is 21% or more, then the minimum bonus will be 50% of base
salary. For 1997, Mr. Gibert's total bonus will be $185,000. This amount
consists of Mr. Gibert's minimum entitlement under the Employment Agreement and
a discretionary addition for achieving approximately an 18% EPS increase over
the preceding year.
The perquisites and other benefits received by Mr. Gibert that are reported
in the Summary Compensation Table are generally provided pursuant to his
Employment Agreement.
March 5, 1998
Human Resources, Compensation and
Nominating Committee
John M. Kaiser, Chairman
Wesley J. Fastiff
Ray C. Robinson, Jr.
Frank J. Wezniak
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<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock with the cumulative
total return of the NASDAQ Market Index and a peer group consisting of the
Company, Expeditors International of Washington, Inc., Fritz Companies, Inc.,
Air Express International Corporation, Airborne Freight Corporation and Pittston
Burlington Group, whose common stock was publicly listed for the first time in
1997 and which was not included in the peer group last year.
<TABLE>
<CAPTION>
Measurement Period Circle NASDAQ Peer Group Peer Group
(Fiscal Year Covered) International Market (Old) (New)
<S> <C> <C> <C> <C>
12/31/92 100 100 100 100
12/31/93 111 115 107 107
12/31/94 98 112 132 132
12/31/95 112 150 186 186
12/31/96 152 195 175 175
12/31/97 148 240 276 271
</TABLE>
13
<PAGE> 16
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to each named director and each named
executive officer, and as to all directors and executive officers as a group,
the number of shares and percentage of the Company's Common Stock beneficially
owned as of February 28, 1998.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED AS OF
FEBRUARY 28, 1998
-------------------------------------
NAME NUMBER OF SHARES PERCENT
---- ----------------- --------
<S> <C> <C>
Peter Gibert(1)........................... 1,114,153(2)(3)(13) 6.9%
Ray C. Robinson, Jr(1).................... 1,706,997(4)(6) 10.5%
Wesley J. Fastiff......................... 85,433(5)(6) 0.5%
Frank J. Wezniak.......................... 13,685(6) --
Edwin J. Holman........................... 14,500(7) --
John M. Kaiser............................ 30,000(8) 0.2%
John M. Lillie............................ 7,500(9) --
Robert J. Diaz............................ 22,500(10) --
Kim E. Wertheimer......................... 104,739(11) 0.6%
Robert H. Kennis.......................... 35,088(12)(13) 0.2%
All directors and officers as a group (10
persons)................................ 3,134,595 19.3%
Westport Asset Management, Inc.(1)........ 1,830,787 11.3%
Franklin Resources, Inc.(1)............... 966,900 6.0%
First Union Corporation(1)................ 887,800 5.5%
</TABLE>
- ---------------
(1) The address of Ray C. Robinson, Jr., and Peter Gibert is 260 Townsend
Street, San Francisco, California 94107. With the exception of Ray C.
Robinson, Jr., and Peter Gibert, the only stockholders who are known by the
Company to own beneficially more than 5% of the Company's Common Stock are
Westport Asset Management, Inc., whose address is 253 Riverside Avenue,
Westport, Connecticut 06880, Franklin Resources, Inc., whose address is 777
Mariners Island Blvd., San Mateo, CA 94403, and First Union Corporation,
whose address is 301 South Tryon, Charlotte, North Carolina 28288.
(2) Excludes 92,159 shares (0.56%) held by Jeffrey L. Oerke, as trustee of an
irrevocable trust for the benefit of the children of Peter Gibert and their
descendants. As to such excluded shares, Mr. Gibert disclaims any
beneficial interest.
(3) Includes 97,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998.
(4) Includes 1,696,997 shares held by Ray C. Robinson, Jr. and Craig Howard
Robinson as co-trustees of a revocable trust for the benefit of Ray C.
Robinson, Jr., his wife, and their descendants.
(5) Includes 75,433 shares held by Wesley J. Fastiff and Bonnie B. Fastiff as
co-trustees of a revocable trust for the benefit of Wesley J. Fastiff, his
wife and their descendants.
(6) Includes 10,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998.
(7) Consists of 14,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998.
(8) Includes 16,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998.
(9) Consists of 5,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998 and 2,500 shares held by
John M. Lillie and Darry L. Lillie as co-trustees of a revocable trust for
the benefit of John M. Lillie, his wife and their descendents.
(10) Consists of 22,500 shares of issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998.
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<PAGE> 17
(11) Includes 35,245 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998 and 1,206 shares of
restricted stock as explained in footnote (7) to the Summary Compensation
Table.
(12) Includes 34,125 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1998 and 364 shares of
restricted stock as explained in footnote (7) to the Summary Compensation
Table.
(13) Includes shares contributed into the officer's account under the Company's
Section 401(k) Plan which were previously held by the Company's profit
sharing plan.
SECTION 16(A) INFORMATION
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 with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1997 to December 31, 1997 all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with, except that Robert Diaz filed a Form 5 with respect to the sale of a total
of 15,000 shares in May and September 1997 acquired on the exercise of stock
options which were not timely reported.
AUDITORS
Deloitte & Touche LLP, independent certified public accountants, serves as
the Company's principal accountants. Representatives of Deloitte & Touche LLP
will be present at the Annual Meeting with the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act as
proxies will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the
Company's 1999 Annual Meeting and wishes to have such proposal set forth in
management's proxy statement, such stockholder must forward the proposal to the
Company so that it is received on or before December 4, 1998. Proposals should
be addressed to the Company at 260 Townsend Street, San Francisco, California
94107, Attention: Corporate Secretary.
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<PAGE> 18
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
Dated: April 1, 1998.
By Order of the Board of Directors
Robert H. Kennis, Secretary
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<PAGE> 19
CIRCLE INTERNATIONAL GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints PETER GIBERT and ROBERT H. KENNIS, or
either of them, each with power of substitution, as proxies of the undersigned,
to attend the Annual Meeting of Stockholders of CIRCLE INTERNATIONAL GROUP, INC.
to be held at the office of the Company at 260 Townsend Street, San Francisco,
California, on May 11, 1998, at 10:30 A.M., and any adjournment thereof, and to
vote the number of shares the undersigned would be entitled to vote if
personally present on the following:
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 20
This proxy will be voted as directed. Please mark
In the absence of contrary directions, your vote as
this proxy will be voted FOR the indicated in
election of the directors listed this example.
above and FOR Proposal 2. /X/
(1) The election of two Class I FOR WITHHOLD
Directors for a three-year-term. the nominees listed AUTHORITY
below (except as to vote for
(INSTRUCTION: To withhold authority to marked to the the nominees
vote for any nominee, strike a line contrary below) listed below
through the nominee's name below) / / / /
Peter Gilbert
Edwin J. Holman
(2) To approve the amendment of the FOR AGAINST ABSTAIN
1994 Omnibus Equity Incentive Plan / / / / / /
to increase the number of shares
authorized for issuance thereunder
by 500,000.
(3) In their discretion, upon any and
all such other matters as may properly
come before the meeting or any
adjournment thereof.
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
Signature(s)______________________________________Dated:_________________, 1998
The signature should correspond exactly with the name appearing on the
certificate evidencing your Common Stock. If more than one name appears, all
should sign. Joint owners should each sign personally.
- ------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
