<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Carey International, 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 determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[CAREY LOGO APPEARS HERE]
Carey International, Inc.
4530 Wisconsin Avenue, N.W.
Washington, D.C. 20016
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1999
----------------
The Annual Meeting of Stockholders of Carey International, Inc. will be held
on Friday, June 25, 1999 at 10:00 a.m., Eastern Daylight Time, at Embassy
Suites, 4300 Military Road, N.W., Washington, D.C. for the following purposes:
1. To elect the directors of the class whose terms expire at the Annual
Meeting to serve for a three year term and until their successors are duly
elected and qualified.
2. To consider and act upon such other business and matters or proposals
as may properly come before said Annual Meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business on May 14, 1999 as
the record date for determining the stockholders having the right to receive
notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Don R. Dailey
Secretary
Washington, D.C.
May 26, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND MAIL PROMPTLY THE ENCLOSED PROXY, WHICH IS BEING SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS. A RETURN ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT PURPOSE.
<PAGE>
[LOGO OF CAREY]
Carey International, Inc.
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1999
This Proxy Statement is furnished in connection with the solicitation by and
on behalf of the Board of Directors of Carey International, Inc. (the
"Company") of proxies for use at the Annual Meeting of Stockholders of the
Company to be held, pursuant to the accompanying Notice of Annual Meeting, on
Friday, June 25, 1999 at 10:00 a.m., and at any adjournment or adjournments
thereof (the "Annual Meeting"). Action will be taken at the Annual Meeting to
elect directors whose terms will expire at the Annual Meeting of Stockholders
to be held in 2002 and to consider and act upon such other business and
matters or proposals as may properly come before the Annual Meeting.
If a stockholder specifies in the proxy accompanying this Proxy Statement
(the "Proxy") how it is to be voted, it will be voted in accordance with such
specification. Any Proxy that is signed and returned and that does not specify
how it is to be voted will be voted "for" the election of the nominees for
director named herein. Any stockholder giving a Proxy in the accompanying form
retains the power to revoke it at any time before it is exercised by
delivering a written revocation to the Secretary of the Company, by executing
and returning to the Company a Proxy bearing a later date or by attending the
Annual Meeting and voting his or her shares in person. Stockholders who attend
the Annual Meeting in person will not be deemed thereby to have revoked
Proxies unless they affirmatively indicate at the Annual Meeting their
intention to vote their shares in person.
The Company's principal executive offices are located at 4530 Wisconsin
Avenue, N.W., Washington, D.C. 20016. The Company mailed this Proxy Statement
and the Proxy on or about May 26, 1999 to its stockholders of record at the
close of business on May 14, 1999.
ANNUAL REPORT ON FORM 10-K AND INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1998, including financial statements and the report of
PricewaterhouseCoopers LLP thereon, is being mailed with this Proxy Statement
to each of the Company's stockholders of record at the close of business on
May 14, 1999. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting, will have the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions. The Board of Directors intends to retain PricewaterhouseCoopers LLP
to continue to act as the Company's independent certified public accountants
for the current fiscal year.
VOTING SECURITIES
The holders of record of shares of Common Stock of the Company at the close
of business on May 14, 1999 may vote at the Annual Meeting. On that date,
there were outstanding and entitled to vote 9,581,040 shares of Common Stock.
Each stockholder has one vote at the Annual Meeting for each share of Common
Stock held
<PAGE>
of record on that date. As long as a quorum (a majority of issued and
outstanding shares of Common Stock) is present in person or by proxy at the
Annual Meeting, each of the nominees for director will be elected by a
plurality of the votes cast at the Annual Meeting by the holders of shares of
Common Stock entitled to vote on that matter. Votes may be cast in favor of
the election of each of the nominees for director or withheld; votes that are
withheld will have no effect on the outcome of the election. Both abstentions
and broker non-votes will count toward the presence of a quorum, but will have
no effect on the election of directors.
ITEM I
ELECTION OF DIRECTORS
The Company's By-laws provide that the Board of Directors shall consist of
neither less than three nor more than fifteen directors, the exact number to
be determined from time to time by the Board of Directors. The Board of
Directors has fixed the number of directors for the ensuing year at six. In
the event that any of the nominees for director becomes unavailable, the
persons named as proxies have discretionary authority to vote for a
substitute. The Board of Directors has no reason to believe that any of the
nominees will be unwilling or unable to serve if elected. The By-laws provide
that, within the limits above specified, the number of directors may at any
time be increased or decreased by the vote of the Board. No decrease in the
number of directors, however, shall affect the term of any director in office.
The Company's Board of Directors is divided into three classes with
staggered three-year terms. The terms of Robert W. Cox and Nicholas J. St.
George expire at the Annual Meeting, the terms of Vincent A. Wolfington and
Don R. Dailey expire at the Company's 2000 annual meeting and the terms of
Dennis I. Meyer and Joseph V. Vittoria expire at the Company's 2001 annual
meeting. Successors to the directors whose terms expire at each annual meeting
are elected for three-year terms. A director holds office until the annual
meeting for the year in which his term expires and until his successor is
elected and qualified.
Nominees for Director
Each of the following directors has been nominated for reelection at the
Annual Meeting.
Robert W. Cox, age 61, has served as a director of the Company since 1995.
From 1969 until his retirement in 1994, Mr. Cox was a partner in the New York
and Chicago offices of the law firm Baker & McKenzie. From 1984 to 1992, Mr.
Cox was Chairman of the Executive Committee and Managing Partner of the firm,
and from 1993 to 1994, Mr. Cox was Chairman of the Policy Committee. Mr. Cox
currently is Chairman Emeritus of Baker & McKenzie and is a director of Hon
Industries, Inc. and Homebase, Inc.
Nicholas J. St. George, age 60, has served as a director of the Company
since June 1997. Mr. St. George has been Chairman and Chief Executive Officer
of Oakwood Homes Corporation ("Oakwood"), a manufacturer and retailer of
manufactured homes, since February 1979. Mr. St. George serves as a director
of Oakwood, and also is a director of American Bankers Insurance Group, Inc.
and Legg Mason, Inc.
Continuing Directors
Vincent A. Wolfington, age 59, a co-founder of the Company, has served as
its Chairman of the Board of Directors and Chief Executive Officer since 1979.
For over 25 years, Mr. Wolfington has been involved in the limousine industry
and directly associated with the Carey system of licensees and affiliates. Mr.
Wolfington has served as a consultant to the National Academy of Sciences
Transportation Research Board, President of the National Para-transit
Association and a member of the International Limousine Association. Mr.
Wolfington currently is a member of the Executive Committee of the World
Travel and Tourism Council, a global organization of the chief executive
officers of companies engaged in all sectors of the travel and tourism
industry.
Don R. Dailey, age 62, a co-founder of the Company, has served as the
President and a director of the Company since 1979. Mr. Dailey has been
directly involved in the limousine business for over 30 years. Mr.
2
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Dailey serves on a number of boards and committees related to the travel
industry, including the National Business Travel Association, the
International Business Travel Association, the Association of Corporate Travel
Executives, the National Limousine Association and the International Limousine
Association (as its past President and member of its Executive Committee). Mr.
Dailey is currently a member of the Travel Business Round Table, a United
States organization of executive officers of companies engaged in all sectors
of the travel and tourism industry.
Dennis I. Meyer, age 63, has served as a director of the Company since June
1998. Mr. Meyer has been a partner in the law firm of Baker & McKenzie since
1965. Mr. Meyer has previously served as Chairman of the Executive Committee
and Managing Partner of Baker & McKenzie and currently serves as the managing
partner of the North American offices of the firm. Mr. Meyer also is a
founding partner of Potomac Investment Associates, a global real estate
developer specializing in golf-oriented residential developments. Mr. Meyer
serves as a director of Oakwood as well as United Financial Banking Companies,
Inc., Jordan Kitt's Music, Inc. and Daily Express, Inc.
Joseph V. Vittoria, age 64, has served as a director of the Company since
June 1998. Mr. Vittoria has been the Chairman and Chief Executive Officer of
Travel Services International, Inc. ("Travel Services") since Travel Services
completed its initial public offering in July 1997. From September 1987 to
February 1997, Mr. Vittoria was the Chairman and Chief Executive Officer of
Avis, Inc. ("Avis"), a multinational auto rental company where he was employed
for over 26 years. Mr. Vittoria was responsible for the purchase of Avis by
its employees in 1987 by creating one of the world's largest Employee Stock
Ownership Plans. He was a founding member of the World Travel and Tourism
Council. Mr. Vittoria serves as a director of CD Radio, Inc., Transmedia
Europe, Transmedia Asia and various non-profit associations.
Certain Information Regarding Board of Directors
Executive Committee. The members of the Executive Committee of the Company's
Board of Directors are Messrs. Wolfington, Cox and Dailey. The Executive
Committee exercises all the powers of the Board of Directors between meetings
of the Board of Directors, except such powers that are reserved to the Board
of Directors by applicable law.
Audit Committee. The members of the Audit Committee of the Company's Board
of Directors are Messrs. Meyer and Vittoria. The Audit Committee makes
recommendations concerning the engagement of independent public accountants,
reviews with the independent public accountants the plans for and results of
the audit, approves professional services provided by the independent public
accountants, reviews the independence of the independent public accountants,
considers the range of audit and non-audit fees, and reviews the adequacy of
the Company's internal accounting controls.
Compensation Committee. The members of the Compensation Committee of the
Company's Board of Directors are Messrs. Cox and St. George. The Compensation
Committee establishes a general compensation policy for the Company and
approves increases in directors' fees and salaries paid to officers and senior
employees of the Company. The Compensation Committee administers the Company's
equity incentive plans and determines, subject to the provisions of the
Company's plans, the directors, officers and employees of the Company eligible
to participate in any of the plans, the extent of such participation and terms
and conditions under which benefits may be vested, received or exercised.
During the fiscal year ended November 30, 1998, the Board of Directors met
five times, the Audit Committee met once, the Compensation Committee met three
times and the Executive Committee did not meet. There are no family
relationships among any of the directors or executive officers of the Company.
Director Compensation
Members of the Board of Directors who also serve as officers of the Company
do not receive compensation for serving on the Board. Each other member of the
Board receives an annual retainer of $20,000 for serving on
3
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the Board, plus a fee of $1,000 for each Board of Directors' meeting attended
and $500 for each committee meeting attended, except that only one $500 fee is
paid in the event that more than one committee meeting is held on a single
day. All directors receive reimbursement of reasonable expenses incurred in
attending Board and committee meetings and otherwise carrying out their
duties.
At his or her election, a director may defer all or a portion of the fees
paid to him or her by the Company. If such an election is made, the deferred
fees are credited to the director's account at the end of each fiscal quarter
in the form of phantom shares of Common Stock. Each phantom share is equal to
one share of Common Stock, and the total number of phantom shares credited to
the account during any fiscal quarter is determined based on the average
closing price of the Common Stock on the Nasdaq National Market during the
last 20 trading days of such fiscal quarter. The account reaches maturity on
the last day of the Company's fiscal year in which the director ceases to be a
member of the Board of Directors. Upon maturity, payment will be made at the
director's election either in cash, shares of Common Stock equal to the number
of phantom shares in the director's account, or a combination of the two. If
all or a portion of the payment is made in cash, the value of the phantom
shares at maturity is determined based on the average closing price of the
Common Stock on the Nasdaq National Market during the last 20 trading days of
the Company's fiscal year in which maturity occurs. To date, elections to
defer all or a portion of their fees have been made by Messrs. Cox, Meyer, St.
George and Vittoria.
The Company maintains the Stock Plan for Non-Employee Directors (the
"Directors' Plan"). A maximum of 100,000 shares of Common Stock may be
delivered upon the exercise of options granted under the Directors' Plan and
elections to receive shares in lieu of cash compensation. Only directors of
the Company who are not employees of the Company or any of its subsidiaries
(the "Non-Employee Directors") are eligible to participate in the Directors'
Plan. While grants of stock options under the Directors' Plan are automatic
and non-discretionary, all questions of interpretation of the Directors' Plan
are determined by the Board of Directors.
On the date of each annual meeting of stockholders, each Non-Employee
Director continuing in office will be granted an option pursuant to the
Directors' Plan covering 5,000 shares. Any newly elected Non-Employee Director
will be granted an option pursuant to the Directors' Plan covering 5,000
shares on the date of his or her election (whether such election occurs at an
annual meeting or otherwise). The option exercise price for all options
granted under the Directors' Plan is the closing price of a share of the
Common Stock as reported on the Nasdaq National Market on the date the option
is granted. All options granted under the Directors' Plan become fully
exercisable six months after the date of grant. Unless sooner terminated
following the death, disability or termination of service of a director,
options granted under the Directors' Plan will remain exercisable until the
fifth anniversary of the date of grant. In addition, upon certain transactions
involving a change of control or the dissolution or liquidation of the
Company, all options outstanding under the Directors' Plan will terminate;
provided however, that 20 days prior to the effective date of any such
transaction, dissolution or liquidation, all options outstanding under the
Directors' Plan that are not otherwise exercisable will become immediately
exercisable.
Under the Directors' Plan, a Non-Employee Director may elect to be paid all
or a portion of his or her annual retainer in shares of Common Stock. Any such
election must be made in writing at least 30 days prior to the date the annual
retainer would be paid by the Company. The number of shares to be delivered to
a Non-Employee Director upon such election is determined by dividing the
amount of the annual retainer to be received in shares of Common Stock by the
closing price of a share of Common Stock as reported on the Nasdaq National
Market on the date the annual retainer is to be paid. The Board of Directors
may at any time or times amend the Directors' Plan for any purpose which at
the time may be permitted by law.
Directors also are eligible to receive options under the Company's 1997
Equity Incentive Plan (the "1997 Plan"). In December 1998, the Company granted
options to purchase 4,000 shares of Common Stock at an exercise price of
$15.00 per share to its four Non-Employee Directors, Messrs. Cox, Meyer, St.
George and Vittoria, in replacement of options granted in June 1998 under the
Directors' Plan to the Non-Employee Directors to purchase 5,000 shares of
Common Stock at an exercise price of $22.125 per share. All such options
become exercisable in full six months after the date of grant.
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table contains a summary of the compensation paid or accrued
during the fiscal years ended November 30, 1996, 1997 and 1998 to the Chief
Executive Officer of the Company and the four other most highly compensated
executive officers (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation
-------------------------------- Shares
Name and Principal Other Annual Underlying All Other
Position Year Salary Bonus Compensation Options Compensation
- ------------------------ ---- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Vincent A. Wolfington... 1998 $231,620 $ -- $ -- 260,000(1) $41,774(2)
Chairman and Chief 1997 231,620 85,000 -- 100,000 12,000
Executive Officer 1996 231,620 20,000 -- -- 57,000(3)
Don R. Dailey........... 1998 205,000 -- -- 260,000(1) 35,150(2)
President and Director 1997 205,001 70,000 -- 100,000 12,000
1996 205,001 20,000 -- -- 57,000(3)
David H. Haedicke....... 1998 135,000 -- -- 120,000 --
Executive Vice
President and 1997 135,000 45,000 -- 30,000 --
Chief Financial Officer 1996 20,510(4) 12,500 -- 25,800 --
Guy C. Thomas........... 1998 115,000 -- 13,020(5) 84,000(1) 10,995(2)
Executive Vice 1997 115,000 25,000 13,020(5) 15,000 9,900
President--Operations 1996 115,000 10,000 13,020(5) -- 9,900
Richard A. Anderson,
Jr..................... 1998 115,570 -- 15,037(6) 6,000 6,005(2)
Executive Vice
President-- 1997 91,000 18,950 11,200(6) 10,000 8,219
Sales and Marketing 1996 91,000 12,000 11,200(6) -- 9,513
</TABLE>
- --------
(1) Includes options granted in December 1998 to Messrs. Wolfington, Dailey
and Thomas to purchase 80,000, 80,000 and 24,000 shares of Common Stock,
respectively, at an exercise price of $15.00 per share, and excludes
options granted in April 1998 to Messrs. Wolfington, Dailey and Thomas to
purchase 100,000, 100,000 and 30,000 shares, respectively, at an exercise
price of $22.125 per share, which April options were replaced by the
December options.
(2) Represents the premium payment on life insurance policies for the Named
Executive Officers.
(3) Includes $45,000 paid for providing personal guarantees on behalf of the
Company.
(4) Mr. Haedicke commenced his employment with the Company on October 7, 1996.
(5) Represents a car allowance.
(6) Includes a car allowance of $11,400 and a club membership of $3,637 for
1998 and a car allowance of $6,600 and a club membership of $4,600 for
1997 and 1996.
5
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Option Grants in Last Fiscal Year
The following table sets forth certain information regarding options granted
during the fiscal year ended November 30, 1998 by the Company to each of the
Named Executive Officers:
<TABLE>
<CAPTION>
Number of Potential Realizable Value at
Shares Percent of Total Assumed Rates of Stock Price
Underlying Options Granted Exercise Appreciation For Option Term
Options to Employees Price Expiration ------------------------------
Name Granted(1) in Fiscal Year ($/Share) Date 5% 10%
---- ---------- ---------------- -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Vincent A. Wolfington... 180,000(2) 16.4% $15.00 4/29/08 $ 1,698,015 $ 4,303,105
80,000(3) 7.3% 15.00 12/14/08 754,674 1,912,491
Don R. Dailey........... 180,000(2) 16.4% 15.00 4/29/08 1,698,015 4,303,105
80,000(3) 7.3% 15.00 12/14/08 754,674 1,912,491
David H. Haedicke....... 120,000(2) 11.0% 15.00 4/29/08 1,132,010 2,868,736
Guy C. Thomas........... 60,000(2) 5.5% 15.00 4/29/08 566,005 1,434,368
24,000(3) 2.2% 15.00 12/14/08 226,402 573,747
Richard A. Anderson, Jr.
....................... 6,000(2) 0.5% 15.00 4/29/08 56,601 143,437
</TABLE>
- --------
(1) Represents options granted under the 1997 Plan. The 1997 Plan provides
that in the event of a merger or other transaction that results or will
result in the Company's Common Stock not being registered under Section 12
of the Securities Exchange Act of 1934, as amended, any unexercisable
options will become fully exercisable 20 days prior to the effective date
of the merger or other transaction.
(2) Represents performance-based stock options ("Performance Options") granted
to certain executive officers in April 1998. The Performance Options
become exercisable (i) with respect to one-sixth of the underlying shares
of Common Stock after the price of the Common Stock as quoted on the
Nasdaq National Market or any exchange on which it may then be traded
exceeds for 30 consecutive days the following benchmark prices: $25, $30,
$35, $40, $45 and $50 or (ii) with respect to all of the underlying shares
of Common Stock on April 29, 2006. On October 5, 1998, the exercise price
of the Performance Options was changed from $22.125 per share to $15.00
per share.
(3) Represents stock options granted in December 1998 to Messrs. Wolfington,
Dailey and Thomas (which were immediately exercisable) to purchase 80,000,
80,000 and 24,000 shares of Common Stock, respectively, at an exercise
price of $15.00 per share, and excludes options granted in April 1998 to
Messrs. Wolfington, Dailey and Thomas (which became exercisable in May
1998 upon the closing of the Company's 1998 public offering) to purchase
100,000, 100,000 and 30,000 shares, respectively, at an exercise price of
$22.125 per share, which April options were replaced by the December
options.
6
<PAGE>
Aggregated Options Exercised in the Last Fiscal Year and Year-End Stock Option
Values
The following table sets forth certain information regarding the aggregate
number and dollar value realized of all options exercised by each of the Named
Executive Officers during the fiscal year ended November 30, 1998, and the
aggregate number and value of all unexercised options held by each of the
Named Executive Officers as of such date.
<TABLE>
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
November 30, 1998 November 30, 1998(1)
Shares -------------------------- -------------------------
Acquired Number of Number of
On Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise Realized(2) Shares Shares Value Value
---- -------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vincent A. Wolfington... -- $ -- 285,706(3) 180,000 $2,115,469 $360,000
Don R. Dailey........... 49,999 979,980 235,707(3) 180,000 1,497,981 360,000
David H. Haedicke....... -- -- 35,800 140,000 383,630 370,000
Guy C. Thomas........... -- -- 61,018(3) 70,000 475,935 185,000
Richard A. Anderson,
Jr. ................... 8,600 129,516 11,052 19,334 82,498 68,670
</TABLE>
- --------
(1) Value of unexercised in-the-money options based upon $17.00, the closing
price of the Company's Common Stock on the Nasdaq National Market on
November 30, 1998.
(2) Value is calculated based upon the difference between the option exercise
price and the closing market price of the Company's Common Stock on the
Nasdaq National Market on the date of exercise.
(3) Includes options granted in December 1998 to Messrs. Wolfington, Dailey
and Thomas to purchase 80,000, 80,000 and 24,000 shares of Common Stock,
respectively, at an exercise price of $15.00 per share, and excludes
options granted in April 1998 to Messrs. Wolfington, Dailey and Thomas to
purchase 100,000, 100,000 and 30,000 shares, respectively, at an exercise
price of $22.125 per share, which April options were replaced by the
December options.
7
<PAGE>
Option Repricings
The following table sets forth certain information with respect to all
current executive officers of the Company regarding options that have been
repriced from May 27, 1997, the date of the Company's initial public offering,
through December 31, 1998.
<TABLE>
<CAPTION>
Number of
Shares Market Price Length of
Underlying of Stock at Exercise Price Original Option
Date of Options Time of at Time of New Term at Date of
Name and Principal Positions Repricing Repriced Repricing Repricing Exercise Price Repricing
- ---------------------------- --------- ---------- ------------ -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Vincent A. Wolfington....... 10/5/98 180,000 $13.75 $22.125 $15.00 9.6 years
Chairman of the Board and 12/14/98 80,000(1) 14.50 22.125 15.00 9.4 years
Chief Executive Officer
Don R. Dailey............... 10/5/98 180,000 13.75 22.125 15.00 9.6 years
President 12/14/98 80,000(1) 14.50 22.125 15.00 9.4 years
Richard A. Anderson, Jr..... 10/5/98 6,000 13.75 22.125 15.00 9.6 years
Executive Vice President--
Sales and Marketing
David H. Haedicke........... 10/5/98 120,000 13.75 22.125 15.00 9.6 years
Executive Vice President
and Chief Financial Officer
Guy C. Thomas............... 10/5/98 60,000 13.75 22.125 15.00 9.6 years
Executive Vice President-- 12/14/98 24,000(1) 14.50 22.125 15.00 9.4 years
Operations
Devin J. Murphy............. 10/5/98 45,000 13.75 22.125 15.00 9.6 years
Senior Vice President--
Operations
Michael P. O'Callaghan...... 10/5/98 30,000 13.75 22.125 15.00 9.6 years
Senior Vice President and
Director of Acquisitions
Sally A. Snead.............. 10/5/98 30,000 13.75 22.125 15.00 9.6 years
Senior Vice President--
Information Systems
John C. Wintle.............. 10/5/98 6,000 13.75 22.125 15.00 9.6 years
Senior Vice President--
Europe
Paul A. Sandt............... 10/5/98 30,000 13.75 22.125 15.00 9.6 years
Vice President and Chief
Accounting Officer
</TABLE>
- --------
(1) Options granted in April 1998 to Messrs. Wolfington, Dailey and Thomas to
purchase 100,000, 100,000 and 30,000 shares of Common Stock, respectively,
were replaced in December 1998 by the indicated options.
8
<PAGE>
Compensation Committee Report and Report on Option Repricing
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for determining and periodically evaluating the Company's general
compensation policies. The Committee reviews and approves, on an annual basis,
the compensation to be paid to the Chief Executive Officer and each of the
other executive officers of the Company. In addition to approving salary and
bonus compensation levels for the Company's executive officers, the Committee
is responsible for administering and granting awards under the Company's
equity incentive plans.
The objective of the Committee is to establish compensation policies that
will attract and retain key management personnel, recognize and reward
individual performance and align the financial interests of the Company's
executive officers with those of the Company. The compensation for executive
officers of the Company generally is based upon three components--base salary,
annual bonus and stock options--each of which is discussed below.
Base Salary. The Committee makes salary decisions based upon input from the
Chief Executive Officer with respect to other executive officers of the
Company. The base salaries of the Chief Executive Officer and the other Named
Executive Officers (with one exception) remained unchanged from 1997 to 1998.
Annual Bonus. The Company did not award bonuses to its executive officers in
1998 in large part because the Company made significant equity-based incentive
compensation awards to its executive officers in 1998.
Equity-Based Compensation. The Committee emphasized equity-based
compensation in 1998. The Committee believes that equity-based compensation
enables the Company to align the long term financial interests of its
executive officers with the success of the Company by enabling executive
officers upon whose initiative and skill the Company is largely dependent to
acquire an equity interest in the Company, thereby increasing their personal
investment in the Company.
Based, in part, upon compensation information provided by an executive
compensation consulting firm retained by the Company, the Committee granted in
April 1998 options to purchase an aggregate of 747,000 shares of Common Stock
to 20 employees of the Company (including all of its executive officers) at an
exercise price of $22.125 per share (the "Performance Options"). The
Performance Options become exercisable (i) with respect to one-sixth of the
underlying shares of Common Stock after the price of the Common Stock as
quoted on the Nasdaq National Market or any exchange on which it may then be
traded exceeds for 30 consecutive days the following benchmark prices: $25,
$30, $35, $40, $45 and $50 or (ii) with respect to all of the underlying
shares of Common Stock on April 29, 2006. The Committee believes that the best
interests of the Company are served by tying the vesting schedule of the
Performance Options to an increase in the price of the Common Stock. The
Committee also granted in April 1998 other stock options to purchase an
aggregate of 230,000 shares of Common Stock (the "Other Options") to the
Company's three most senior executives, Messrs. Wolfington, Dailey and Thomas,
at an exercise price of $22.125. The Other Options became exercisable in full
upon the closing of the Company's May 1998 public offering.
During the second half of 1998, the Committee concluded that for reasons
beyond the control of the Company and its management the stock market was
undervaluing the Common Stock of the Company and other companies with similar
market capitalizations. Consequently, in October and December 1998, the Board
of Directors determined that in order to continue to incentivize management
appropriately, it was in the best interests of the Company to reduce the
exercise prices of the Performance and Other Options from $22.125 to $15.00
per share. On October 5, 1998, the date the Performance Options were repriced,
the closing price of the Common Stock on the Nasdaq National Market was
$13.75, and on December 14, 1998, the date that the Other Options were
repriced, the closing price of the Common Stock on the Nasdaq National Market
was $14.50. While the exercise prices of the Performance Options were reduced,
the Board did not adjust the benchmark prices ($25, $30, $35, $40, $45 and
$50) above which the Common Stock must trade before the Performance Options
become exercisable. None of the Performance Options are currently exercisable.
At the time that the
9
<PAGE>
Other Options were repriced, they were fully exercisable. In connection with
their repricing, the Other Options were exchanged for new options to purchase
20% fewer shares of Common Stock. In other words, the Other Options granted to
Messrs. Wolfington, Dailey and Thomas to purchase 100,000, 100,000 and 30,000,
respectively, were replaced by options to purchase 80,000, 80,000 and 24,000
shares, respectively. The Committee believes that the option repricing was
necessary to ensure that long-term equity-based incentives remain an effective
tool for employee motivation and retention.
Chief Executive Officer Compensation. Mr. Wolfington's base salary remained
unchanged from 1997 to 1998, and, like the other executive officers, he did
not receive a bonus for 1998. During 1998, Mr. Wolfington was awarded a
Performance Option to purchase 180,000 shares of Common Stock and an Other
Option to purchase 100,000 shares (which was later exchanged for an option to
purchase 80,000 shares). The Performance Option was granted to Mr. Wolfington
for the same reasons that other executive officers received Performance
Options, namely to incentivize management appropriately and tie a portion of
their compensation to an increase in stockholder value. The Other Option was
awarded, in part, in recognition of Mr. Wolfington's service to the Company
and to adjust his total compensation to a level that the Committee determined
to be comparable to the total compensation of the chief executive officers of
other companies that the Company's compensation consultants reviewed.
Respectfully submitted by,
THE COMPENSATION COMMITTEE
Robert W. Cox
Nicholas J. St. George
Section 16(a) Beneficial Ownership Reporting Compliance
Mr. O'Callaghan filed a Form 3 with the Securities and Exchange Commission
(the "SEC") on March 6, 1998 in connection with his appointment as an
executive officer of the Company on February 13, 1998. Ms. Snead filed a Form
4 with the SEC on March 18, 1998 for shares purchased pursuant to the exercise
of a stock option on January 29, 1998. Messrs. Cox and St. George each filed a
Form 4 with the SEC on March 31, 1999 for stock options granted on June 3,
1998.
10
<PAGE>
Comparative Stock Performance
The following graph and chart compare, during the period commencing May 27,
1997, the date of the Company's initial public offering, and ending November
30, 1998, the cumulative total return on the Company's Common Stock with the
cumulative total returns on the Russell 2000 Index and a Peer Group Index (as
defined below), assuming the investment of $100 on May 27, 1997 (with respect
to the indices, at the market close, and with respect to the Company's Common
Stock, at the initial public offering price of $10.50) and the reinvestment of
any dividends.
[CHART APPEARS HERE]
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
<TABLE>
<CAPTION>
Fiscal Year Ending
-------------------------------
Company/Index/Market 5/28/97 11/30/97 11/30/98
<S> <C> <C> <C>
Carey International Inc. 100.00 130.95 161.90
Peer Group Index 100.00 103.75 68.22
Russell 2000 Index 100.00 113.78 106.13
</TABLE>
- --------
(1) The Peer Group consists of the following consolidators selected by the
Company from the transportation and other industries: AutoNation, Inc.,
Coach USA, Inc., Dispatch Management Services Corp., Keystone Automotive
Industries, Inc., Miller Industries, Inc., Rural/Metro Corporation, Travel
Services International, Inc. and United Auto Group, Inc.
11
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of May 14, 1999 with respect
to the beneficial ownership of Common Stock by (i) each director of the
Company, (ii) each of the Named Executive Officers, (iii) all directors and
executive officers as a group and (iv) each person who is known by the Company
to be the beneficial owner of more than five percent of the Company's Common
Stock as of such date. Except as indicated in the footnotes below, the persons
named in this table have sole investment and voting power with respect to the
shares beneficially owned by them.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned (1)
-----------------
Directors and Executive Officers Number Percent
- -------------------------------- --------- -------
<S> <C> <C>
Vincent A. Wolfington (2).................................... 386,069 3.9%
Don R. Dailey (3)............................................ 375,176 3.8%
David H. Haedicke (4)........................................ 42,700 *
Guy C. Thomas (5)............................................ 88,800 *
Richard A. Anderson, Jr. (6)................................. 21,952 *
Robert W. Cox (4)............................................ 24,400 *
Dennis I. Meyer (7).......................................... 9,000 *
Nicholas J. St. George (8)................................... 16,500 *
Joseph V. Vittoria (4)....................................... 4,000 *
All directors and executive officers as a group (14
persons)(9)................................................. 1,027,279 10.0%
Greater Than Five Percent Stockholders
- --------------------------------------
Gilder Gagnon Howe & Co. LLC (10)............................ 1,547,809 16.2%
1775 Broadway
26th Floor
New York, NY 10019
Alliance Capital Management L.P. (11)........................ 1,310,200 13.7%
1290 Avenue of the Americas
New York, NY 10104
Kaufman Fund, Inc. .......................................... 520,000 5.4%
140 East 45th St.
43rd Floor
New York, NY 10017
</TABLE>
- --------
* Less than 1%.
(1) Percentages are based upon 9,581,040 shares of Common Stock outstanding on
May 14, 1999.
(2) Includes options to purchase 285,706 shares of Common Stock. Also includes
(i) 1,183 shares of Common Stock held by a company controlled by Mr.
Wolfington, (ii) 1,560 shares held by a limited partnership which are
attributable to Mr. Wolfington's wife (780 shares) and one of his children
(780 shares) and (iii) 430 shares held by one of his children. Excludes
shares held by Yerac Associates, L.P., a limited partnership of which Mr.
Wolfington is a limited partner, with respect to which shares Mr.
Wolfington has no voting or investment power.
(3) Includes options to purchase 235,707 shares of Common Stock.
(4) Represents options to purchase shares of Common Stock.
(5) Includes options to purchase 46,018 shares of Common Stock.
(6) Includes options to purchase 11,052 shares of Common Stock. Also includes
1,500 shares held by a trust of which Mr. Anderson is the beneficiary and
500 shares held by Mr. Anderson's wife.
(7) Includes options to purchase 4,000 shares of Common Stock. Also includes
5,000 shares held by Mr. Meyer's wife as to which Mr. Meyer disclaims
beneficial ownership.
12
<PAGE>
(8) Includes options to purchase 11,500 shares of Common Stock.
(9) See Notes 2 through 8. Includes options to purchase 52,562 shares of
Common Stock and 6,120 shares of Common Stock beneficially owned by
executive officers not listed in the table above.
(10) This information is based upon the Schedule 13G dated February 16, 1999
filed by Gilder Gagnon Howe & Co. LLC.
(11) This information is based upon the Schedule 13G dated February 16, 1999
filed by AXA Conseil Vie Assurance Mutuelle, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle, AXA and The Equitable Companies
Incorporated, as a group.
13
<PAGE>
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual
meeting of stockholders must be received by the Company at its principal
executive offices both (a) on or before January 27, 2000 (after which time
proposals of stockholders will not be included in the proxy statement and form
of proxy relating to that meeting) and (b) in accordance with the procedures
and within the time frames specified in the Company's By-laws, which are
summarized below. The Company's Board of Directors does not have a nominating
committee, and shareholder nominees for director must be made in accordance
with the By-laws.
The By-Laws of the Company specify when a stockholder must submit
nominations for director or proposals for consideration at a stockholders'
meeting in order for those nominations or proposals to be considered at the
meeting. In order for the nominations or proposals to be considered at the
meeting, the stockholder making them must have given timely notice in writing
to the Secretary of the Company. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company, 4530 Wisconsin Avenue, N.W., Washington, D.C. 20016, not less than 60
days nor more than 90 days prior to the meeting; provided, however, that in
the event that less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date
of the meeting or such public disclosure was made.
A stockholder's notice to the Secretary concerning nominations for director
shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such nominee that is required to be disclosed in solicitations of proxies for
the election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Exchange Act (including such nominee's written
consent to being named in the proxy statement as a nominee and to serve as a
director if elected); and (b) as to the stockholder giving notice (i) the
stockholder's name and address, as they appear on the Company's books and (ii)
the class and number of shares of the Company's stock that are beneficially
owned by such stockholder.
A stockholder's notice to the Secretary with respect to other proposals
shall set forth as to each matter the stockholder proposes to bring before the
meeting (a) a brief description of the business desired to be brought before
the meeting and the reasons for conducting such business at the meeting, (b)
the stockholder's name and address, as they appear on the Company's books, (c)
the class and number of shares of the Company's stock that are beneficially
owned by the stockholder and (d) any material interest of the stockholder in
such business.
OTHER MATTERS
The Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting other than as described in this Notice of
Annual Meeting. However, if any such other business should come before the
Annual Meeting, it is the intention of the persons named in the enclosed Proxy
to vote the Proxies in respect of any such business in accordance with their
best judgment.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit Proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company,
without additional compensation, may use their personal efforts, by telephone
or otherwise, to obtain Proxies. Such assistance may take the form of
personal, telephonic or written solicitation or any combination thereof. The
Company will also request persons, firms and corporations holding shares in
their names, or in the names of their nominees, which shares are beneficially
owned by others, to send this proxy material to and obtain Proxies from such
beneficial owners and will reimburse such holders for their reasonable
expenses in doing so.
By Order of the Board of Directors
Don R. Dailey
Secretary
May 26, 1999
14
<PAGE>
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1999
CAREY INTERNATIONAL, INC.
The undersigned, having received the Notice of Annual Meeting of
Stockholders and the Board of Directors' Proxy Statement (the "Proxy
Statement"), hereby appoint(s) Vincent A. Wolfington and Don A. Dailey,
and each of them, Proxies of the undersigned (with full power of
substitution) to attend the Annual Meeting of Stockholders of Carey
International, Inc. to be held June 25, 1999, and all adjournments
thereof (the "Meeting"), and there to vote all shares of Common Stock of
Carey International, Inc. that the undersigned would be entitled to
vote, if personally present, in regard to all matters that may come
before the meeting.
The undersigned hereby confer(s) upon the Proxies, and each of them,
discretionary authority (i) to consider and act upon such business,
matters or proposals other than the business set forth below as may
properly come before the Meeting for which Carey International, Inc. did
not receive proper notice in accordance with its By-laws, (ii) with
respect to the election of directors in the event that any of the
nominees is unable or unwilling with good cause to serve, and (iii) with
respect to such other matters upon which discretionary authority may be
conferred. The Proxy when properly executed will be voted in the manner
specified herein. If no specification is made, the Proxies intend to
vote FOR all nominees for director.
Please mark vote as in this example. [X]
For the election of all nominees listed below (except as otherwise
indicated).
[_] FOR all nominees [_] WITHHOLD from all nominees
Nominees: Robert W. Cox and Nicholas J. St. George
-------------------------------------------------------
FOR all nominees, except those listed on the line above
PROXY
PROXY
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Mark here for address change and note
below. [_]
------------------ ---------
Signature Date
------------------ ---------
Signature Date
In signing, please write name(s)
exactly as appearing in the
imprint on this card. For shares
held jointly, each joint owner
should sign. If signing as
executor, or in any other
representative capacity, or as an
officer of a corporation, please
indicate your full title as such.
