<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 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:
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 determine):
4) Proposed maximum aggregate value of transaction:
5) Total fees 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
[CIRCLE LOGO]
CIRCLE INTERNATIONAL GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
TUESDAY, MAY 16, 2000, 10:30 A.M.
TO OUR STOCKHOLDERS:
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 Tuesday, May 16, 2000, at 10:30 a.m. for the following purposes:
(1) To elect two Class III directors.
(2) To approve the adoption of the 2000 Stock Option Plan for Non-Employee
Directors.
(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 24, 2000, will be entitled to vote at the meeting and any adjournment
thereof. A complete list of stockholders of record as of the close of business
on March 24, 2000 will be available for inspection during normal business hours
ten days before the Annual Meeting at 260 Townsend Street, San Francisco,
California.
By Order of the Board of Directors
ROBERT H. KENNIS
General Counsel and Secretary
San Francisco, California
April 1, 2000
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 16, 2000, 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, 2000.
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 24, 2000, will be entitled to vote at the Annual Meeting.
As of the close of business on March 24, 2000, there were outstanding
17,597,220 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.
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 six.
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 III directors elected at the
Annual Meeting will serve until the 2003 Annual Meeting; Class II directors
elected at the 1999 Annual Meeting will serve until the 2002 Annual Meeting; and
Class I directors elected at the 1998 Annual Meeting will serve until the 2001
Annual Meeting.
The persons named below are the nominees to serve as Class III directors
until the 2003 Annual Meeting of Stockholders and until their successors have
been elected or until death, retirement, resignation or removal. The nominees
presently serve as Class III directors.
<PAGE> 4
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>
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND SERVED AS
NOMINEES FOR DIRECTOR AGE OTHER INFORMATION DIRECTOR SINCE
--------------------- --- ---------------------------------------------- --------------
<S> <C> <C> <C>
John M. Kaiser..................... 60 Private businessman. From 1979 to 1988, Mr. 1993
Kaiser was President of Expeditors
International of Washington, Inc.
(international freight forwarder).
Ray C. Robinson, Jr................ 79 Private businessman. Mr. Robinson served as 1971
Secretary of the Company from 1971 until 1986.
</TABLE>
Set forth below is certain information concerning the other directors which is
based on data furnished by them.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST FIVE YEARS AND SERVED AS
CONTINUING DIRECTORS AGE OTHER INFORMATION DIRECTOR SINCE
-------------------- --- ---------------------------------------------- --------------
<S> <C> <C> <C>
David I. Beatson................... 52 Chairman of the Board since January 1999 and 1998
President and Chief Executive Officer since
July 1998. From July 1994 to July 1998, Mr.
Beatson was President and Chief Executive
Officer of Emery Worldwide, a subsidiary of
CNF Transportation engaged in transportation
services. From 1991 until July 1998, Mr.
Beatson served in a variety of management
positions at Emery Worldwide.
Wesley J. Fastiff.................. 67 President of Littler Mendelson, a law firm 1971
which was retained by the Company to perform
legal services in 1999.
Peter Gibert....................... 57 Consultant to the Company since January 1999 1992
and since April 1999 Managing Director and
Part-Owner of two 51%-owned subsidiaries of
the Company located in Spain and Portugal,
respectively. Mr. Gibert served as President
of the Company from May 1991 until July 1998
and as Chief Executive Officer from May 1992
until July 1998.
Edwin J. Holman.................... 53 Since January 1999, President and Chief 1995
Operating Officer of Rich's, Lazarus and
Goldsmith's, a division of Federated
Department Stores. From 1996 to 1998, Chairman
and Chief Executive Officer of 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).
</TABLE>
2
<PAGE> 5
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1999, the Board of Directors held nine 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), Ray C.
Robinson, Jr. and John M. Kaiser. 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 1999,
the Audit Committee held seven meetings.
The members of the Human Resources, Compensation and Nominating Committee
are John M. Kaiser (Chairman), Wesley J. Fastiff, and Ray C. Robinson, Jr. 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 to administer the Company's stock option
plans. During 1999, the Human Resources, Compensation and Nominating Committee
held five meetings.
The members of the Strategic Planning and Mergers and Acquisitions
Committee are David I. Beatson (Chairman), Peter Gibert, Edwin Holman, John M.
Kaiser, 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 1999, this
Committee held five meetings.
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 $500 for
each meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Company retained the law firm of Littler Mendelson to
perform legal services for it. Mr. Fastiff, a director of the Company and a
member of two of its committees, serves as president of Littler Mendelson.
3
<PAGE> 6
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the last three fiscal years is set
forth below.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-------------------------------------- ------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSATION STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($) OPTIONS(#) ($)(2)
--------------------------- ------ --------- -------- --------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
David I. Beatson.................... 1999 $459,000 $150,000 $ 26,250(4) 50,000 $4,800
President and Chief Executive
Officer 1998(3) 221,505 150,000 158,750(4) $28,000 200,000
Janice Kerti........................ 1999 192,800 64,750 -- -- 10,000 4,800
Senior Vice President, 1998 177,000 80,000 -- -- 35,000 4,800
Chief Financial Officer and
Treasurer 1997 126,500 50,000 -- -- -- 4,800
Robert H. Kennis.................... 1999 182,200 61,250 -- -- 10,000 4,800
Senior Vice President, 1998 167,000 80,000 -- -- 15,000 4,800
Secretary and General Counsel 1997 155,000 82,500 -- 9,360(6) 10,000 4,750
Stephen J. Russell.................. 1999 197,200 66,500 14,500(5) 10,000 4,800
Senior Vice President, Sales and 1998(3) 45,000 20,000 -- -- 20,000
Marketing
Cynthia A. Stoddard................. 1999 182,200 61,250 69,700(5) 10,000
Senior Vice President, Information 1998(3) 60,700 20,000 -- -- 15,000
Systems
</TABLE>
- ---------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1997, 1998 and 1999 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) Mr. Beatson joined the Company and replaced Peter Gibert as Chief Executive
Officer in July 1998. Mr. Russell and Ms. Stoddard joined the Company in
August 1998 and September 1998, respectively.
(4) For 1998, represents an incentive paid in January 1999 as an inducement to
join to Company in July 1998 and directors' fees ($8,750). For 1999,
represents payment for director's fees.
(5) Represents partial forgiveness of loan as discussed under "Transactions with
the Company" and, with respect to Ms. Stoddard, compensation for its tax
impact.
(6) 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 $21 per share when the buy-out program was announced. All such
shares vested on July 15, 1998.
4
<PAGE> 7
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during 1999 to the executive officers named in the foregoing Summary
Compensation Table.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------------------- ANNUAL RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS GRANTED EXERCISE OR FOR OPTION TERM(4)
UNDERLYING OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
---- ------------------ ---------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
David I. Beatson......... 50,000 16.0% 23.94 7/13/09 752,724 1,907,550
Janice Kerti............. 10,000 3.2% 17.19 3/1/09 108,094 273,932
Robert H. Kennis......... 10,000 3.2% 17.19 3/1/09 108,094 273,932
Stephen J. Russell....... 10,000 3.2% 17.19 3/1/09 108,094 273,932
Cynthia A. Stoddard...... 10,000 3.2% 17.19 3/1/09 108,094 273,932
</TABLE>
- ---------------
(1) All option awards granted to the named executives in fiscal 1999 are
exercisable in annual increments of 25%, commencing one year from date of
grant, except for options granted to David I. Beatson to purchase 50,000
shares which are exercisable in annual increments of 33% commencing a year
after the 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 1999 were granted for a term of ten 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 1999 and stock options held by each of the named executive
officers as of December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FY-END(#) AT FY-END($)
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
David I. Beatson............ -- -- 66,681/183,319 37,475/$ 74,925
Janice Kerti................ -- -- 16,251/39,999 22,500/$ 61,870
Robert H. Kennis............ 4,000 50,500 55,753/28,747 297,066/$ 59,679
Stephen J. Russell.......... -- -- 5,000/25,000 23,125/$119,995
Cynthia A. Stoddard......... -- -- 3,750/21,250 0/$ 95,154
</TABLE>
5
<PAGE> 8
EMPLOYMENT AGREEMENTS
Incident to the hiring of David I. Beatson as President and Chief Executive
Officer, the Company and Mr. Beatson entered into an employment agreement for a
five-year term expiring June 30, 2003. The employment agreement provides for a
salary of $450,000 per year, subject to review on an annual basis by the Board
of Directors. The employment agreement also provided for a signing bonus, which
was paid in January 1999, consisting of 1,000 shares of restricted stock and
$150,000 in cash, and for market-priced stock option grants of 200,000 shares in
July 1998, and 50,000 shares in each of July 1999, 2000 and 2001. The employment
agreement provides for accelerated vesting of the options granted to Mr. Beatson
in the event of a change of control. Under the terms of his employment
agreement, Mr. Beatson receives incentive payments based on the growth of the
Company's net revenue and earnings per share, subject to a minimum incentive of
$150,000 for 1999. In the event Mr. Beatson's employment is terminated by the
Company without cause, Mr. Beatson would be entitled to receive a severance
payment equal to one year's base annual salary.
Prior to joining the Company, Mr. Russell was a shareholder and executive
of Alrod International, Inc. ("Alrod") which was acquired by the Company in July
1998. In connection with this acquisition, the Company and Mr. Russell entered
into an employment agreement for a five year term, subject to earlier
termination under certain circumstances. In the event Mr. Russell's employment
is terminated without cause, Mr. Russell would be entitled to salary
continuation through the then applicable remaining term subject to offsets for
amounts received from a subsequent employer. Additionally, by virtue of the
acquisition of Alrod the Company assumed and renegotiated a promissory note
obligation of Mr. Russell. The restated promissory note dated August 1, 1998 in
the principal amount of $63,156 bears interest at 6% per annum and provides that
commencing August 1, 1999 twenty percent (20%) of the outstanding balance of the
note will be forgiven annually. As of December 13, 1999 the unpaid principal and
accrued interest on the note aggregated $52,971.00. The Company also has
commitments to Robert Kennis and Janice Kerti to provide for continuation of
their salaries for up to 12 months in the event of termination of employment
without cause.
TRANSACTIONS WITH THE COMPANY
Effective approximately April 1, 1999, the Company sold a 49% interest in
its two subsidiaries in Spain and Portugal ("the subsidiaries") to Peter Gibert,
who relocated to Barcelona, Spain and was appointed as Managing Director of both
subsidiaries effective April 1999. In view of Mr. Gibert's experience in the
industry and his over thirty-year track record, the Company concluded that Mr.
Gibert's leadership for the two subsidiaries could substantially improve the
growth and profitability of its operations in Spain and Portugal.
The Company's outside advisors determined the methodology for determining
the value of the subsidiaries, which was deemed to be fair by a third-party
evaluation expert (the "valuation methodology"). The agreed purchase price was
$1,280,000, paid one-third at closing, and the balance to be paid in equal
installments eighteen and thirty-six months following closing. The two
installment payments are evidenced by a promissory note bearing interest at six
percent (6%) and secured by a pledge of Mr. Gibert's interest in the
subsidiaries.
In addition, the agreement provides Mr. Gibert with the right at his option
to require the Company to purchase his interest in the subsidiaries at a price
based on the same valuation methodology. After December 31, 2005 (or earlier
under certain circumstances), the Company has the right to require Mr. Gibert to
sell his entire interest in the subsidiaries at a price based on the valuation
methodology.
In connection with Mr. Gibert stepping down as Chief Executive Officer and
relocating to Spain, Mr. Gibert entered into a Consulting Agreement with the
Company pursuant to which he agreed to provide sales, marketing, strategic
planning, acquisition, training and other assistance as reasonably requested by
the Company. The agreement provides for annual compensation in the first year
equaling $375,000 and annual compensation in the second and third years equaling
$275,000. The agreement, which has a three-year term commencing on January 1,
1999, also prohibits Mr. Gibert, directly or indirectly, from competing against
the Company during the term of the agreement, plus six months.
6
<PAGE> 9
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.
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 1999,
$50,000 due under the Note was forgiven. As of December 31, 1999, unpaid
principal and accrued interest on the Note aggregated $146,694.00.
On December 21, 1998, the Company advanced $300,000 to David I. Beatson
evidenced by a Promissory Note bearing interest at 6% per annum. The primary
purpose of the advance was to assist Mr. Beatson in meeting certain tax
liabilities arising from the compelled early distribution of employment benefits
incident to his resignation from his previous employment. The note provides for
payment of principal and interest in four equal annual installments commencing
on March 31, 2000. The note provides the Company with certain off-set and
deduction rights in the event payment is not made when due. As of December 31,
1999, the unpaid principal and accrued interest on the note aggregated $318,653.
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, 1999, the unpaid principal and accrued interest on the note
aggregated $40,734.00.
Additionally, on October 1, 1998, the Company advanced $150,000 to Cynthia
Stoddard in connection with her relocation to the San Francisco Bay Area to join
the Company as Chief Information Officer. This advance is evidenced by a
Promissory Note bearing interest at 5.54% per annum. The note provides that
commencing October 15, 1998 twenty percent of the outstanding balance will be
forgiven annually. The note also provides either acceleration of the
indebtedness or forgiveness depending upon the circumstances of the termination
of Ms. Stoddard's employment.
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.
7
<PAGE> 10
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 and the business
unit managed by the officer as well as the individual contribution of each
officer. As a result, a substantial portion of each executive's compensation is
"at risk" in the form of incentive compensation, which is awarded based on
performance of the individual and the Company (and/or the appropriate business
unit managed by the executive officer) for the year in question. The
determination of incentive compensation is tied to meeting or exceeding certain
objective financial targets, to the performance of the Company and/or the
relevant business unit and to a qualitative evaluation of the individual's
contribution to the Company.
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.
David Beatson's base salary and incentive for 1999 were based on his rights
under the employment agreement which he signed upon joining the Company in July
1998. The Committee participated in the development of the employment agreement
after reviewing the terms of the proposed employment arrangement as against the
compensation packages which are paid to chief executive officers of other
similarly situated companies, including the compensation paid to Mr. Beatson by
his previous employer. For 1999, Mr. Beatson was paid the minimum annual bonus
the Company was committed to paying under the employment agreement.
The perquisites and other benefits received by Mr. Beatson that are
reported in the Summary Compensation Table are generally provided pursuant to
his employment agreement.
February 28, 2000 Human Resources, Compensation and
Nominating Committee
John M. Kaiser, Chairman
Wesley J. Fastiff
Ray C. Robinson, Jr.
8
<PAGE> 11
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.
<TABLE>
<CAPTION>
CIRCLE INTERNATIONAL GROUP NASDAQ STOCK MARKET
INC. PEER GROUP (U.S.)
-------------------------- ---------- -------------------
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 114 138 141
12/31/96 155 115 174
12/31/97 151 179 213
12/31/98 136 165 300
12/31/99 150 196 542
</TABLE>
9
<PAGE> 12
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to (i) each person who is known by the
Company to own beneficially more than 5% of the outstanding shares of Common
Stock, (ii) each director, (iii) each named executive officer, and (iv) 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 29, 2000.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
AS OF FEBRUARY 29, 2000
-------------------------------
NUMBER OF
NAME SHARES PERCENT
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<S> <C> <C>
David I. Beatson........................................ 71,210(2) 0.4%
Peter Gibert(1)......................................... 1,170,954(3)(4)(13) 6.4%
Ray C. Robinson, Jr.(1)................................. 1,699,897(5)(7) 9.7%
Wesley J. Fastiff....................................... 93,853(6)(7) 0.5%
Edwin J. Holman......................................... 28,000(8) --
John M. Kaiser.......................................... 40,000(7) 0.2%
Janice Kerti............................................ 16,347(9) --
Stephen J. Russell...................................... 145,605(10) 0.8%
Cynthia A. Stoddard..................................... 3,794(11) --
Robert H. Kennis........................................ 51,423(12)(13) 0.3%
All directors and officers as a group (11 persons)...... 3,333,889 19.1%
Westport Asset Management, Inc.(1)...................... 1,996,000 11.4%
Capital Group International, Inc.(1).................... 1,356,000 7.8%
Royce and Associates, Inc.(1)........................... 1,284,000 7.3%
Fund Asset Management(1)................................ 999,353 5.7%
</TABLE>
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(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
(based on filings with the Securities Exchange Commission as of December
31, 1999) are Westport Asset Management, Inc., whose address is 253
Riverside Avenue, Westport, Connecticut 06880 Royce, Inc., and Associates,
whose address is 1414 Avenue of the Americas, New York, New York 10019,
Capital Group International, Inc., whose address is 11100 Santa Monica
Blvd., Los Angeles, California, and Fund Asset Management whose address is
800 Scudder Mill Rd., Plainsboro, New Jersey.
(2) Includes 3,400 shares of stock held by David I. Beatson and Diana L.
Beatson as co-trustees of a revocable trust for the benefit of David I.
Beatson, his wife and their descendants, 1,129 shares held in the Company's
1999 Employee Stock Purchase Plan ("ESPP"), and 66,681 shares issuable upon
exercise of outstanding options exercisable within 60 days of February 29,
2000.
(3) Excludes 55,295 shares 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.
(4) Includes 166,282 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 2000.
(5) Includes 1,679,897 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.
(6) Includes 73,853 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.
(7) Includes 20,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000.
(8) Includes 26,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000.
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(9) Includes 16,251 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000 and 96 shares held in the
ESPP.
(10) Includes 5,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000 and 145 shares held in the
ESPP.
(11) Includes 3,750 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000 and 44 shares held in the
ESPP.
(12) Includes 50,253 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 29, 2000 and 222 shares held in the
ESPP.
(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.
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<PAGE> 14
PROPOSAL TO APPROVE THE 2000 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
PRIOR PLANS
In 1992, the stockholders approved a Stock Option Plan for Non-Employee
Directors (the "1992 Director Plan"), pursuant to which options to purchase
6,000 shares of Common Stock were reserved for grant to each of the Company's
non-employee directors. In 1996, the stockholders approved the 1995 Stock Option
Plan for Non-Employee Directors (the "1995 Director Plan" and, together with the
1992 Director Plan, the "Prior Director Plans"), pursuant to which options to
purchase 20,000 shares of Common Stock were reserved for grant to each of the
Company's non-employee directors. No further options will be granted under the
Prior Director Plans.
GENERAL
The following discussion provides a brief description of the material
features of the 2000 Stock Option Plan for Non-Employee Directors (the "Director
Plan") and is qualified in its entirety by reference to the Director Plan, which
is attached hereto as Exhibit A.
At a meeting held on December 13, 1999, the Board of Directors adopted the
Director Plan, subject to stockholder approval at the 2000 Annual Meeting.
The Director Plan provides for the grant of nonqualified stock options to
purchase an aggregate of 250,000 shares of Common Stock. The Director Plan is
intended to attract and retain the services of experienced and knowledgeable
independent directors for the benefit of the Company and its stockholders and to
provide additional incentive for such directors to continue to work for the best
interests of the Company and its shareholders.
ADMINISTRATION
The Director Plan is administered by the Board of Directors of the Company
(the "Committee"). However, because the principal terms of all option awards are
set forth in the Director Plan, the Committee will have no discretion to
determine which non-employee directors will receive option awards or to set the
number of shares subject to such option awards.
OPTION GRANTS
The Director Plan provides that on the date that any person is for the
first time elected or appointed to the Board of Directors, options to purchase
10,000 shares (subject to adjustment for recapitalizations, stock splits and
similar events) shall automatically be granted to the new director, provided,
however, that such automatic grant shall only be made if (i) the director is not
otherwise an employee of the Company or any subsidiary on the date he or she
becomes a director and has not been an employee for all or any part of the
preceding fiscal year, and (ii) the number of shares subject to future grant
under the Director Plan is sufficient to make all automatic grants required to
be made pursuant to the Director Plan on such date. The Director Plan further
provides that, beginning with the 2000 Annual Meeting, any director who is to
continue as a non-employee director of the Company shall automatically be
granted options to purchase 10,000 shares on the first business day after the
Annual Meeting.
TERMS OF OPTIONS
The exercise price of options granted under the Director Plan will be the
fair market value of the shares at the date of the option grant. Payment of the
exercise price shall be in cash.
Options to be granted under the Director Plan will not be exercisable for a
period of twelve months after the date of grant. Such options will become
exercisable in installments to the extent of one-quarter of the shares covered
by the option on the date one year after the date of grant, an additional
one-quarter of the shares covered by the option on the date two years after the
date of grant, an additional one-quarter of the
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<PAGE> 15
shares covered by the option on the date three years after the date of grant and
the remaining shares covered by the option on the date four years after the date
of grant.
In the event that an optionee shall cease to be a director of the Company
for any reason other than his death, his or her option shall be exercisable, to
the extent it was exercisable at the date he or she ceased to be a director, for
a period of three months after such date, and shall then terminate. If an
optionee dies while a director of the Company, or within the three-month period
after termination of such status during which he or she is permitted to exercise
an option in accordance with the preceding sentence, such option may be
exercised at any time within one year after the optionee's death, but only to
the extent the option was exercisable at the time of death. Notwithstanding the
foregoing, no option granted under the Director Plan will be exercisable after
the expiration of five years from the date of its grant.
Options will not be transferred other than by will or the laws of descent
and distribution, and will be exercisable during the lifetime of an optionee
only by that optionee.
AMENDMENT
The Director Plan may be amended by the Board, except that stockholder
approval is required for any amendment which would increase the number of shares
subject to the Director Plan, increase the number of shares for which an option
may be granted to any optionee, change the designation of the class of persons
eligible to receive options under the Director Plan or the formula for grants,
provide for the grant of options having an option price per share less than fair
market value on the date of grant, extend the term during which options may be
exercised, or extend the final date upon which options under the Director Plan
may be granted.
NEW PLAN BENEFITS
The Securities and Exchange Commission requires 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. Although grants under the Director Plan are based on a
non-discretionary formula, the number of grants actually made will depend on the
number of non-employee directors who join the Board and/or are in service at
each annual meeting.
Executive officers of the Company will not receive benefits under the
Director Plan. Non-employee directors will be eligible to receive benefits in
the future in accordance with the terms of the Director Plan, but did not
receive any benefits under the Director Plan or the predecessor 1995 Director
Plan in the last fiscal year of the Company.
In order to be effective, the Director Plan must be approved by the holders
of a majority of the outstanding shares of Common Stock present or represented
and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE DIRECTOR 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, 1999 to December 31, 1999 all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with, except that Wesley J. Fastiff filed a Form 5 regarding a charitable
contribution of 1,580 shares of stock in November 1999 that was not timely
reported.
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<PAGE> 16
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 2001 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, 2000. Proposals should
be addressed to the Company at 260 Townsend Street, San Francisco, California
94107, Attention: Corporate Secretary.
The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the Company's annual meeting in 2001, which proposal is not
intended to be included in the Company's proxy statement and form of proxy
relating to that meeting, the stockholder should give appropriate notice no
later than February 15, 2001. If such a stockholder fails to submit the proposal
by such date, the Company will not be required to provide any information about
the nature of the proposal in its proxy statement and the proxy holders will be
allowed to use their discretionary voting authority if the proposal is raised at
the Company's annual meeting in 2001.
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, 2000.
By Order of the Board of Directors
Robert H. Kennis,
Secretary
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<PAGE> 17
PROXY
[CIRCLE LOGO]
CIRCLE INTERNATIONAL GROUP, INC.
Proxy for Annual Meeting of Stockholders May 16, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID I. BEATSON 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 16, 2000, 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)
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o FOLD AND DETACH HERE o
<PAGE> 18
Please mark
your vote as [X]
indicated in
this example.
FOR WITHHOLD
the nominees listed AUTHORITY
below (except as to vote for
marked to the nominees
contrary below) listed below
1. The election of two Class III Directors [ ] [ ]
for a three year term.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME BELOW)
Ray C. Robinson, Jr. and John M. Kaiser
2. To approve the adoption on the 2000 FOR AGAINST ABSTAIN
Stock Option Plan for Non-Employee [ ] [ ] [ ]
Directors.
3. In their discretion, upon any and all
such other matters as may properly
come before the meeting or any
adjournment thereof.
THIS PROXY WILL BE VOTED AS
DIRECTED. IN THE ABSENCE OF
CONTRARY DIRECTIONS, THIS
PROXY WILL BE VOTED FOR THE
ELECTION OF THE DIRECTORS
LISTED ABOVE AND FOR PROPOSAL
2.
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.
<TABLE>
<S> <C>
Signature ____________________________________________________ Dated: _________, 2000
Signature ____________________________________________________ Dated: _________, 2000
</TABLE>
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;
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o FOLD AND DETACH HERE o
