SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
COPART, INC.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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<PAGE>
[LOGO]
COPART, INC.
October 31, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Copart, Inc. (the "Company") to be held on Tuesday, December 5,
2000 at 9:00 a.m., at the Company's corporate headquarters located at 5500 E.
Second Street, Benicia, California 94510 (see directions on Page 14 of proxy
statement). The formal Notice of Annual Meeting of Shareholders and Proxy
Statement accompanying this letter describes the business to be acted upon.
Please sign and return your Proxy now whether or not you plan to attend
the meeting. If you attend the meeting, you may still vote in person even if you
have previously returned a signed proxy.
Sincerely,
/s/ Willis J. Johnson
WILLIS J. JOHNSON
Chief Executive Officer
YOUR VOTE IS IMPORTANT
IN ORDER TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED AT THE ANNUAL MEETING IN
THE EVENT YOU ARE NOT PERSONALLY PRESENT, PLEASE DATE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. EXECUTION OF THE PROXY WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
<PAGE>
[LOGO]
COPART, INC.
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on December 5, 2000
--------------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Copart, Inc. (the "Company") will be held on Tuesday,
December 5, 2000 at 9:00 a.m., pacific standard time, at the Company's corporate
headquarters located at 5500 E. Second Street, Benicia, California 94510 for the
following purposes:
(1) To elect seven Directors of the Company for the ensuing year or
until their successors have been duly elected and qualified;
(2) To ratify the selection of KPMG LLP as independent auditors for the
Company for fiscal year 2001;
(3) To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on October 17,
2000, as the record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting. The stock transfer books will not be closed
between the record date and the date of the Annual Meeting.
Please read carefully the following Proxy Statement which describes the
matters to be voted upon at the Annual Meeting, and then complete, sign and
return your Proxy as promptly as possible. Should you receive more than one
Proxy because your shares are registered in different names and addresses, each
Proxy should be signed and returned to ensure that all your shares will be
voted. If you attend the Annual Meeting and vote by ballot, your Proxy will be
revoked automatically and only your vote at the Annual Meeting will be counted.
Sincerely,
/s/ Willis J. Johnson
WILLIS J. JOHNSON
Chief Executive Officer
Benicia, California
October 31, 2000
<PAGE>
COPART, INC.
5500 E. Second Street
Benicia, California 94510
PROXY STATEMENT
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on December 5, 2000
--------------------
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Copart, Inc., a California corporation (the "Company"), for use at the Annual
Meeting of Shareholders to be held on Tuesday, December 5, 2000 (the "Annual
Meeting"). The Annual Meeting will be held at 9:00 a.m., pacific standard time,
at the Company's corporate headquarters located at 5500 E. Second Street,
Benicia, California. Shareholders of record at the close of business on October
17, 2000 (the "Record Date") will be entitled to notice of and to vote at the
Annual Meeting. The Company's principal executive offices are located at 5500 E.
Second Street, Benicia, CA 94510. The Company's telephone number at that address
is (707) 748-5000.
The Proxy Statement and accompanying proxy (the "Proxy") and Notice of
Annual Meeting were mailed to shareholders on or about October 31, 2000. A copy
of the Company's Annual Report for the fiscal year ended July 31, 2000
accompanies this Proxy Statement.
Record Date, Voting and Share Ownership
On October 17, 2000, the record date (the "Record Date") for determination
of shareholders entitled to vote at the Annual Meeting, there were 54,555,094
shares of Common Stock outstanding held by approximately 556 shareholders of
record. No shares of the Company's Preferred Stock are outstanding. Every
shareholder voting in the election of directors may cumulate such shareholder's
votes and give one candidate a number of votes equal to the number of directors
to be elected (seven) multiplied by the number of shares held by such
shareholder as of the Record Date, or distribute such number of votes on the
same principle among as many candidates as the shareholder thinks fit, provided
that votes cannot be cast for more than the number of candidates to be elected.
However, no shareholder shall be entitled to cumulate votes for a candidate
unless such candidate's name has been placed in nomination prior to the voting
and the shareholder, or any other shareholder, has given notice at the meeting
prior to the voting of the intention to cumulate votes. On all other matters,
each share has one vote. Approval of the Board's decision to retain KPMG LLP as
independent auditors for fiscal year 2001 will be decided by the affirmative
vote of a majority of the shares present or represented and entitled to vote on
such matters. Abstentions with respect to any matter are treated as shares
present or represented at the Annual Meeting and entitled to vote on that matter
and thus have the same effect as negative votes. If shares are not voted by the
broker who is the record holder of the shares, or if shares are not voted in
other circumstances in which proxy authority is defective or has been withheld
with respect to any matter, these non-voted shares are not deemed to be present
or represented for purposes of determining whether shareholder approval of that
matter has been obtained, although they are deemed to be present for purposes of
establishing a quorum for the transaction of business.
Revocability of Proxies
If you are unable to attend the Annual Meeting, you may vote by Proxy. The
enclosed Proxy is solicited by the Company's Board of Directors and, when
returned properly completed, will be voted as you direct your Proxy.
1
<PAGE>
Unless otherwise instructed in the Proxy, the proxy holder will vote the Proxies
received by them FOR each of the two proposals described herein.
Any person giving a Proxy has the power to revoke it at any time before
its exercise. It may be revoked by filing with Paul A. Styer, Senior Vice
President, General Counsel and Secretary of the Company at the Company's
principal executive offices, Copart, Inc., 5500 E. Second Street, Benicia,
California 94510, a notice of revocation or another signed Proxy with a later
date. You may also revoke your Proxy by attending the Annual Meeting and voting
in person.
Solicitation
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional soliciting materials furnished to shareholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, facsimile or other means by Directors, officers, employees
or agents of the Company. No compensation will be paid to these individuals for
any such services. Except as described above, the Company does not presently
intend to solicit proxies other than by mail.
Deadline for Receipt of Shareholder Proposals for 2001 Meeting
Shareholders are entitled to present proposals for action at forthcoming
shareholder meetings of the Company if they comply with the requirements of the
appropriate proxy rules promulgated by the Securities and Exchange Commission
(the "SEC"). Proposals of shareholders of the Company that are intended to be
presented by such shareholders at the Company's 2001 Annual Meeting of
Shareholders must be received by the Company at its principal executive offices
no later than July 3, 2001, in order that they may be considered for inclusion
in the proxy statement and form of proxy relating to that meeting. Shareholders
interested in submitting such a proposal are advised to retain knowledgeable
legal counsel with regard to the detailed requirements of the applicable
securities laws. The timely submission of a shareholder proposal to the Company
does not guarantee that it will be included in the Company's applicable proxy
statement.
The Proxy card attached hereto and which is to be used in connection with
the Company's current 2000 Annual Meeting grants the proxy holders discretionary
authority to vote on any matter otherwise properly raised at such Annual
Meeting. The Company presently intends to use a similar form of proxy card for
its 2001 Annual Meeting of Shareholders. If the Company is not notified at its
principal executive offices of a shareholder proposal at least 45 days prior to
the one year anniversary of the mailing of this Proxy Statement, then the proxy
holders for the Company's 2001 Annual Meeting of Shareholders will have the
discretionary authority to vote against any such shareholder proposal if it is
properly raised at such annual meeting, even though such shareholder proposal is
not discussed in the Company's proxy statement related to that shareholder
meeting.
2
<PAGE>
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE -- ELECTION OF DIRECTORS
One of the purposes of the Annual Meeting is to elect directors to hold
office until the next annual meeting or until their respective successors are
elected and have been qualified. The number of authorized Directors is currently
seven. The Board of Directors has selected the seven nominees listed below for
election as Directors. Each person nominated for election has agreed to serve if
elected and Management has no reason to believe that any nominee will be
unavailable to serve. Unless otherwise instructed in the Proxy, the proxy
holders will vote the Proxies received by them FOR the nominees named below. The
seven candidates receiving the highest number of affirmative votes of the shares
entitled to vote at the Annual Meeting will be elected Directors of the Company.
The Board of Directors recommends that the shareholders vote FOR the
election of each of the following nominees to serve as Directors of the Company
for the ensuing year until the next Annual Meeting or until their successors are
elected and qualified.
Nominees
Set forth below is information regarding the nominees, all of whom are
currently directors of the Company, including information furnished by them as
to principal occupations, certain other directorships held by them, any
arrangements pursuant to which they were or are selected as Directors or
nominees and their ages as of the Record Date:
Name Age Principal Occupation
---- --- --------------------
Willis J. Johnson (1)(2) ..... 53 Chief Executive Officer of the Company
A. Jayson Adair .............. 31 President of the Company
Harold Blumenstein (3) ....... 61 General Partner, Paragon Properties
Company
James Grosfeld (1)(2)(3) ..... 63 Private Investor
James E. Meeks ............... 51 Executive Vice President and Chief
Operating Officer of the Company
Marvin L. Schmidt ............ 56 Retired Senior Vice President of
Corporate Development of the Company
Jonathan Vannini (1)(2)(3) ... 38 Private Investor
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(1) Member of the Compensation Committee.
(2) Member of the Stock Option Grant Committee.
(3) Member of the Audit Committee. All audit committee members are independent
nonexecutive directors who possess a basic understanding of finance and
accounting and are able to read and understand fundamental financial
statements.
WILLIS J. JOHNSON, co-founder of the Company, has served as Chief
Executive Officer of the Company since 1986, and has been a Board member since
1982. Mr. Johnson served as President of the Company from 1986 until May 1995.
Mr. Johnson was an officer and director of U-Pull-It, Inc. ("UPI"), a
self-service auto dismantler which he co-founded in 1982, from 1982 through
September 1994. Mr. Johnson sold his entire interest in UPI in September 1994.
Mr. Johnson has over 28 years of experience in owning and operating auto
dismantling companies.
A. JAYSON ADAIR has served as President of the Company since October 1996
and as a director since September 1992. From April 1995 until October 1996, Mr.
Adair served as Executive Vice President. From August 1990 until April 1995, Mr.
Adair served as Vice President of Sales and Operations and from June 1989 to
August 1990, Mr. Adair served as the Company's Manager of Operations. Mr. Adair
was elected as a director of Keystone Automotive Industries, Inc. in August
2000.
HAROLD BLUMENSTEIN has served as a director of the Company since March
1994. Mr. Blumenstein is a general partner of Paragon Properties Company, a real
estate development, investment and management company, where he has been
employed since January 1971. Mr. Blumenstein holds a B.A. in Economics and
Accounting from Wayne State University.
3
<PAGE>
JAMES GROSFELD has served as a director since November 1993. From November
1993 until November 1994, Mr. Grosfeld also served as Chairman of the Board of
the Company. Mr. Grosfeld is a director of Blackrock Inc., a public diversified
investment management company.
JAMES E. MEEKS has served as Vice President and Chief Operating Officer of
the Company since September 1992 when he joined the Company concurrent with the
Company's purchase of South Bay Salvage Pool (the "San Martin Operation"). Mr.
Meeks has served as Executive Vice President and Director since October 1996 and
as Senior Vice President since April 1995. From April 1986 to September 1992,
Mr. Meeks, together with his family, owned and operated the San Martin
Operation. Mr. Meeks is also an officer, director and part owner of Cas & Meeks,
Inc., a towing and subhauling service company, which he has operated since 1991.
Mr. Meeks has also been an officer and director of E & H Dismantlers, a
self-service auto dismantler, since 1967. Mr. Meeks has over 33 years of
experience in the vehicle dismantling business.
MARVIN L. SCHMIDT has served as a director since July 1993. Mr. Schmidt
retired as Senior Vice President of Corporate Development of the Company on
January 1, 1999. Mr. Schmidt served as Vice President of the Company's Western
Region from July 1993, when he joined the Company concurrent with the Company's
acquisition of County Salvage, Inc., until May 1995, when he became Senior Vice
President of Corporate Development. From January 1989 until July 1993, Mr.
Schmidt owned and operated County Salvage, Inc. in Los Angeles. Mr. Schmidt has
over 26 years of experience as an owner and operator of auto dismantling and
parts businesses.
JONATHAN VANNINI has served as a director of the Company since February
1993. Mr. Vannini was a general partner at HPB Associates, an investment
partnership, and was employed by HPB Associates from August 1987 until March
1996. Mr. Vannini was a private investor in Atlas Partners, L.P., an investment
partnership, from March 1996 until March 1998. Mr. Vannini is currently a
director of Coastcast Corporation. Mr. Vannini holds a B.A. in Economics from
the University of California, Los Angeles and an M.B.A. from Columbia
University.
There are no family relationships among any of the directors or executive
officers of the Company, except that A. Jayson Adair is the son-in-law of Willis
J. Johnson.
In 1990, the Commodity Futures Trading Commission ("CFTC") brought a civil
action against MultiVest Options, Inc. ("MOI") alleging various violations of
the Commodity Exchange Act ("CEA") and certain rules and regulations of the
CFTC. Mr. Grosfeld was the principal stockholder of the ultimate parent
corporation of MOI, but, according to Mr. Grosfeld, was never an officer or
director of MOI and did not participate in the day-to-day conduct of its
business. Without admitting or denying the allegations of the CFTC complaint,
MOI consented to the entry of a permanent injunction and appointment of a
receiver. MOI discontinued its business operations in 1990. Mr. Grosfeld was not
specifically named in the CFTC proceeding or in the injunction related thereto.
Subsequently, in 1990 certain individuals who had previously purchased and sold
commodity options through MOI brought a class action lawsuit against the parent
and affiliated companies of MOI and Mr. Grosfeld alleging that the defendants,
among other things, violated the antifraud provisions of the CEA and asserting
other federal and state law claims. Mr. Grosfeld denied the allegations
contained in the action and maintained that the litigation was without merit. On
March 31, 1997, the court approved a settlement of the action and the lawsuit
was dismissed.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than ten percent
of a registered class of the Company's equity securities to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and
greater-than-ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) reports they file.
Based solely upon a review of the copies of such reports furnished to the
Company and written representations from such officers, directors and greater
than ten percent shareholders that no other reports were required to be made,
the Company believes that there was full compliance for the fiscal year ended
July 31, 2000 with all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater-than-ten percent shareholders.
4
<PAGE>
Board Committees and Meetings
During the fiscal year ended July 31, 2000, the Board of Directors held
seven (7) meetings. As of July 31, 2000, the Company had three standing
Committees: an Audit Committee, Stock Option Grant Committee and a Compensation
Committee. The Company has no nominating committee or any committee performing
similar functions.
The Audit Committee is primarily responsible for approving the services
performed by the Company's independent auditors, reviewing financial statements
of the Company, and reviewing reports of the Company's accounting practices and
systems of internal accounting controls. The Audit Committee currently consists
of Directors Blumenstein, Vannini and Grosfeld. The Audit Committee held three
(3) meetings during the last fiscal year.
The Stock Option Grant Committee is responsible for the administration of
the Company's 1992 Stock Option Plan. The Compensation Committee is generally
responsible for, among other things, reviewing and approving the Company's
compensation policies and setting the compensation levels for those Company
executive officers and senior managers reporting directly to the Company's
President whose compensation is not otherwise established pursuant to employment
agreements reviewed or approved by the Board of Directors. The Compensation
Committee and Stock Option Grant Committee consist of Directors Johnson,
Grosfeld and Vannini. The Compensation Committee held two (2) meetings and the
Stock Option Grant Committee held one (1) meeting during the last fiscal year.
During the last fiscal year, no director attended fewer than 75% of the
aggregate number of meetings of the Board of Directors and meetings of
Committees of the Board on which he serves that were held during the period for
which he has been a member.
5
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information known to the Company
regarding the ownership of the Company's Common Stock as of the Record Date for
(i) each Director and nominee for director, (ii) all persons known by the
Company to be beneficial owners of five percent or more of the Company's Common
Stock, (iii) any other Named Officers (as said term is defined hereinafter in
"Executive Compensation - Summary of Cash and Certain Other Compensation") and
(iv) all executive officers and Directors of the Company as a group. Unless
otherwise indicated, each of the shareholders has sole voting and investment
power with respect to the shares beneficially owned, subject to community
property laws where applicable, except as otherwise indicated.
<TABLE>
<CAPTION>
Five Percent Shareholders, Number Percent of Total
Directors and Executive Officers (1) of Shares Shares Outstanding
------------------------------------ --------- ------------------
<S> <C> <C>
Blum Capital Partners, L.P. (2) ........................ 4,883,840 8.95%
909 Montgomery Street, Suite 400
San Francisco, CA 94133
Willis J. Johnson (3) .................................. 10,550,611 19.27%
James Grosfeld ......................................... 4,520,000 8.29%
A. Jayson Adair (4) .................................... 608,571 1.10%
James E. Meeks (5) ..................................... 287,153 *
Marvin L. Schmidt (6) .................................. 1,236,900 2.26%
Paul A. Styer (7) ...................................... 266,424 *
Harold Blumenstein (8) ................................. 586,134 1.07%
Jonathan Vannini (9) ................................... 16,334 *
Wayne R. Hilty (10) .................................... 47,561 *
All directors and executive officers as a group
(nine persons) (11) .................................. 18,119,778 32.40%
</TABLE>
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* Represents less than 1% of the outstanding Common Stock.
(1) Unless otherwise set forth, the mailing address for each of the persons
listed in this table is: c/o Copart, Inc., 5500 E. Second Street, Benicia,
CA 94510.
(2) Represents shares reported in a Schedule 13F filed by Blum Capital
Partners, L.P. with the SEC and reflects stock held as of June 30, 2000.
The Company has not attempted to verify independently any of the
information contained in the Schedule 13F.
(3) Includes 206,667 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(4) Includes 577,349 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(5) Includes 132,669 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(6) Includes 168,600 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(7) Includes 214,668 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(8) Includes 22,334 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(9) Includes 16,334 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(10) Includes 39,333 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
(11) Includes 1,377,954 shares of Common Stock subject to options exercisable
within 60 days of the Record Date.
6
<PAGE>
EXECUTIVE COMPENSATION
Directors' Compensation
Non-employee Directors are reimbursed for expenses incurred in attending
Board and Committee meetings. During fiscal year 2000, all non-employee
Directors received quarterly compensation of $5,000.
Each non-employee Director is also eligible to receive periodic option
grants for shares of the Company's Common Stock pursuant to the automatic option
grant program in effect under the Company's 1994 Director Stock Option Plan (the
"Director Plan"). Mr. Grosfeld has waived all rights to receive automatic option
grants under the Director Plan.
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning the
compensation earned for services rendered in all capacities to the Company and
its subsidiaries during each of the last three fiscal years, by the Company's
Chief Executive Officer and each of the Company's other four most highly
compensated executive officers. The individuals whose compensation is disclosed
in the following table are hereafter referred to as the "Named Officers".
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation Awards
Annual --------------------------
Compensation Securities
Name and ----------------------- Underlying All Other
Principal Fiscal Salary Bonus Options Compensation
Position Year ($) ($) (#) ($)
--------- ------ ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Willis J. Johnson ......................... 2000 350,000 150,000 -- 36,432 (1)
Chief Executive Officer ................... 1999 350,000 150,000 -- 26,576 (2)
........................................... 1998 311,538 150,000 400,000 21,220 (3)
A. Jayson Adair ........................... 2000 225,000 75,000 250,000 15,317 (4)
President ................................. 1999 225,000 75,000 400,000 15,317 (4)
........................................... 1998 192,115 95,000 200,000 13,333 (4)
James E. Meeks ............................ 2000 185,000 50,000 100,000 11,786 (4)
Executive Vice President .................. 1999 185,000 50,000 -- 11,786 (4)
Chief Operating Officer ................... 1998 171,346 60,000 120,000 38,644 (5)
Paul A. Styer ............................. 2000 170,000 30,000 20,000 6,000 (6)
Senior Vice President, General ............ 1999 170,000 30,000 -- 6,000 (6)
Counsel, Secretary ........................ 1998 171,346 20,000 80,000 6,000 (6)
Wayne R. Hilty ............................ 2000 164,616 30,000 20,000 3,600 (4)
Senior Vice President ..................... 1999 155,000 30,000 40,000 3,600 (4)
Chief Financial Officer ................... 1998 146,000 10,000 40,000 3,600 (6)
</TABLE>
----------
(1) Comprised of premiums on life insurance policies payable to beneficiaries
designated by Mr. Johnson in the amount of $21,132 and value to Mr.
Johnson of use of Company automobiles of $15,300.
(2) Comprised of premiums on life insurance policies payable to beneficiaries
designated by Mr. Johnson in the amount of $11,638 and value to Mr.
Johnson of use of Company automobiles of $14,938.
(3) Comprised of premiums on life insurance policies payable to beneficiaries
designated by Mr. Johnson in the amount of $10,539 and value to Mr.
Johnson of use of Company automobiles of $10,681.
(4) Comprised of value of use of Company automobile.
(5) Comprised of forgiveness of debt in the amount of $31,500 and value to Mr.
Meeks of use of Company automobiles of $7,144.
(6) Comprised of automobile expense allowance.
7
<PAGE>
Option Grants
The following table provides information with respect to the stock option
grants made during the 2000 fiscal year under the Company's 1992 Stock Option
Plan (the "Option Plan") to the Named Officers. No stock appreciation rights
were granted to any of the Named Officers during fiscal 2000.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------
% of Total Potential Realizable Value
Number of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise Over Option Term
Options in Fiscal Price Expiration ---------------------------
Name Granted (#)(1) Year (2) ($/Share)(3) Date 5%($)(4) 10%($)(4)
----- ------------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Willis J. Johnson ....... -- -- -- -- -- --
A. Jayson Adair ......... 250,000 42.37 16.67 3/15/10 2,620,604 6,641,125
James E. Meeks .......... 100,000 16.95 16.67 3/15/10 1,048,242 2,656,450
Paul A. Styer ........... 20,000 3.39 16.67 3/15/10 209,648 531,290
Wayne R. Hilty .......... 20,000 3.39 16.67 3/15/10 209,648 531,290
</TABLE>
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(1) Each option was granted under the Option Plan and will become exercisable
for the option shares in installments over the optionee's period of
service with the Company. Options vest over a five-year period at a rate
of 20% per year. Each option has a maximum term of ten years, subject to
earlier termination in the event of the optionee's cessation of employment
with the Company.
(2) Based upon options to purchase an aggregate of 590,000 shares granted by
the Company to employees and directors during fiscal 2000.
(3) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. The Company may also finance the option exercise by loaning the
optionee sufficient funds to pay the exercise price for the purchased
shares and the Federal and state income tax liability incurred by the
optionee in connection with such exercise. The exercise price of all
option grants was determined by the fair market value of the Company's
common stock as quoted on the Nasdaq National Market System on the date of
grant.
(4) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the rules of the Securities Exchange Commission and do not
represent the Company's estimate or projection of future Common Stock
prices. There is no assurance provided to any executive officer or any
other holder of the Company's Common Stock that the actual stock price
appreciation over the option term will be at the assumed 5% or 10% levels
or at any other specific level. Assuming the specified rates of annual
compounding, the total appreciation during the term of such options
results in an increase of 62.9% (at 5% per year) and 159.4% (at 10% per
year).
Option Exercise and Year-end Holdings
The following table sets forth information concerning exercises of options
during fiscal 2000 and the value of unexercised options held as of the end of
the 2000 fiscal year by the Named Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities Underlying In-The-Money
Shares Value Unexercised Options at Fiscal Year End Options At Fiscal Year-End(2)
Acquired On Realized -------------------------------------- -----------------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable ($) Unexercisable ($)
---- ------------ -------- ----------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Willis J. Johnson ......... -- -- 180,000 220,000 1,598,400 1,953,600
A. Jayson Adair ........... -- -- 532,000 648,000 4,788,721 2,913,559
James E. Meeks ............ 250,000 3,732,500 119,333 180,667 1,224,496 665,504
Paul A. Styer ............. -- -- 202,667 71,333 1,971,910 464,490
Wayne R. Hilty ............ -- -- 34,000 66,000 291,086 372,514
</TABLE>
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(1) Represents the fair market value of underlying securities on the date of
exercise, minus the exercise price.
(2) Represents the fair market value of underlying securities at fiscal year
end (for in-the-money options only) minus the exercise price. The closing
price for the Company's Common Stock at fiscal year end as quoted on the
Nasdaq National Market System was $13.25.
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Employment Benefits
Mr. Johnson is entitled to participate in the Company's benefit plans and
is entitled to four weeks paid vacation per year, use of Company automobiles,
and a $1 million life insurance policy with the beneficiary being designated by
Mr. Johnson.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has general
responsibility for establishing the compensation payable to the Company's
executive officers and other key executives. The Company's Stock Option Plan
Committee has the sole and exclusive authority to administer the Company's 1992
Stock Option Plan under which grants may be made to such individuals. While the
Compensation Committee has responsibility for establishing the level of
compensation payable to the Company's executive officers, the decisions reached
by the Committee with respect to the compensation paid to them for the 2000
fiscal year were to a substantial extent similar to the terms and requirements
of employment agreements that have since terminated.
This report is divided into two parts. Part One is a brief description of
the compensation arrangements in effect for the 2000 fiscal year for the
Executive Officers of the Company, including the Named Officers in the Summary
Compensation Table. Part Two is a discussion of the factors which governed the
compensation payable to the Chief Executive Officer for the 2000 fiscal year.
PART ONE -- EXISTING COMPENSATION ARRANGEMENTS
The compensation arrangements for fiscal 2000 with the Company's executive
officers were negotiated directly between the Company and such individuals. The
Compensation Committee believes that the salaries and benefits under the current
or former employment agreements with the Company's executive officers are
commensurate with the Company's financial performance to date. During fiscal
1998, the employment agreement between the Company and the Chief Executive
Officer expired and such person is now employed on an "at-will" basis. During
fiscal 2000, the base annual salaries of Willis J. Johnson, A. Jayson Adair,
James E. Meeks, Paul A. Styer, and Wayne R. Hilty were $350,000, $225,000,
$185,000, $170,000, and $165,000, respectively. The Compensation Committee
intends to review these salary levels on a regular basis and to make such
adjustments to them as it sees fit based on the performance of the Company and
the employee.
The Stock Option Committee awarded stock options to executive officers in
order to align the long-term interests of the executive officers with those of
the shareholders as specified in the Option Grant table. The Committee awarded
stock option grants to the Named Officers and other key management employees
based upon the improved financial performance of the Company.
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PART TWO -- CEO COMPENSATION
Willis J. Johnson, the co-founder of the Company, served as President and
Chief Executive Officer from 1986 until May 1995, and has served as CEO since
May 1995. Based upon the Company's performance during fiscal year 2000, the
Compensation Committee increased Mr. Johnson's base salary to $400,000 effective
August 18, 2000.
The Compensation Committee believes that the salary and benefits paid to
Mr. Johnson during fiscal 2000 are commensurate with the Company's financial
performance, based upon the growth of the Company's operating profit and net
income. Any bonus compensation recommended by the Compensation Committee to be
payable to Mr. Johnson in future years will be based upon Company growth and
financial performance, and subject to approval by the Board of Directors,
excluding Mr. Johnson.
Tax Limitation. As a result of federal tax legislation, a publicly-held
company such as the Company will not be allowed a federal income tax deduction
for compensation paid to certain executive officers, to the extent that
compensation exceeds $1 million per officer in any fiscal year. The Company
presently intends to structure its future compensation packages in a manner to
comply with the $1 million compensation cap.
Compensation Committee
Willis J. Johnson James Grosfeld Jonathan Vannini
Stock Option Committee
Willis J. Johnson James Grosfeld Jonathan Vannini
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Performance Graph
The following graph shows a comparison of the cumulative total shareholder
returns for the Company, the NASDAQ Stock Market - US Companies Index and
NASDAQ, American Stock Exchange, and New York Stock Exchange SIC Peer Group
5010-5019 Index (Motor Vehicle and Automotive Equipment) for the period of
August 1, 1995 through July 31, 2000.
Comparison of Cumulative Total Return(*)
Copart, Inc. (CPRT)
Among NASDAQ Stock Market - US Companies Index NASDAQ Stock Market and American
Stock Exchange and New York Stock Exchange SIC Peer Group 5010-1019 Index
[The following table was depicted as a line chart in the printed material.]
NASDAQ Stock
Copart, Inc. Peer Group Market (U.S.)
------------ ---------- -------------
7/1995 100 100 100
7/1996 78 109 111
7/1997 87 130 161
7/1998 104 140 189
7/1999 233 130 270
7/2000 258 89 385
* Assumes $100 invested on 8/1/95 in stock or index and including the
reinvestment of all dividends. Fiscal years ending July 31.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Exchange Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, which might incorporate future
filings made by the Company under those statues, the preceding Compensation
Committee Report on Executive Compensation and Performance Graph are not
incorporated by reference into any of those previous filings; nor is such report
or graph to be incorporated by reference into any future filings which the
Company may make under those statues.
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Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Willis J. Johnson, James
Grosfeld and Jonathan Vannini. Except for Willis J. Johnson, who serves as the
Company's Chief Executive Officer, none of these individuals was at any time
during the fiscal year ended July 31, 2000 or at any other time an officer or
employee of the Company.
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
CERTAIN TRANSACTIONS
The Company employs in various positions Bonnie Randall and Diane Yassa,
the sister of the Company's Chief Executive Officer and daughter of the
Company's Chief Operating Officer, respectively. In fiscal 2000, Mrs. Randall
and Mrs. Yassa received a total of $71,154 and $82,769 of cash compensation,
respectively. In addition, in fiscal 2000 Mrs. Yassa was granted options to
purchase 5,000 shares of the Company's Common Stock at an exercise price of
$16.68 per share. The Company believes that the terms of each such individual's
employment, including their cash compensation and option grants, are
commensurate with other employees in comparable positions. The exercise price of
the options granted was at the fair market value of the Company's Common Stock
on the date of grant.
James E. Meeks, an executive officer of the Company, owns an interest in
Cas & Meeks, Inc., a private towing service, which supplied approximately
$614,300 in transport services to the Company in fiscal 2000. The Company
believes that these services were provided on terms no less favorable to the
Company than could be obtained from unaffiliated third parties. On October 20,
1995, the Company loaned Mr. Meeks the sum of $95,000 bearing interest at 8% per
annum, payable in annual installments of $23,750, with the balance payable at
the end of four years. The loan was made to assist Mr. Meeks in re-locating his
personal residence closer to the Company's corporate headquarters. The October
20, 1996 payment of $31,500 (principal and accrued interest) was forgiven by the
Company and accounted for as additional compensation expense. The October 20,
1997 payment of $31,500 (principal and accrued interest) was forgiven by the
Company and accounted for as additional compensation expense.
Willis J. and Reba J. Johnson are the owners of the real property and
improvements of the Fresno, California facility and lease said premises to the
Company for current monthly lease payments of $11,897 under a lease dated August
1, 1992, which expires, with inclusion of all extension options, in July 2004,
and contains a provision whereby the Company has an option to purchase the real
property and improvements. Total payments under this lease aggregated $132,000
in fiscal 2000. The Company believes that the terms of this lease are no less
favorable to the Company than could be obtained from unaffiliated third parties.
Under the terms of a lease agreement effective July 1, 1993 between the
Schmidt Family Trust dated September 29, 1982 (the "Schmidt Trust") and the
Company, the Company leases property in the Los Angeles, California, area from
the Schmidt Trust (the "Los Angeles Lease"). The current term of the Los Angeles
Lease expires June 30, 2003, with an option to extend the lease for an
additional five-year term. Total payments under this lease aggregated $59,420 in
fiscal 2000. Marvin L. Schmidt, a Director, is a beneficiary of the Schmidt
Trust.
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PROPOSAL TWO -- RATIFICATION OF INDEPENDENT AUDITORS
The Company is asking the shareholders to ratify the selection of KPMG LLP
as the Company's independent auditors for the fiscal year ending July 31, 2001.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Approval of the appointment of KPMG LLP
requires the affirmative vote of a majority of the shares present at the Annual
Meeting in person or by proxy and entitled to vote as of the Record Date. Even
if the selection of independent auditors is ratified by the Company's
shareholders, the Board in its discretion may direct the appointment of a
different independent accounting firm at any time during the year if the Board
feels that such a change would be in the best interests of the Company and its
shareholders.
KPMG LLP have been the Company's independent auditors since their
appointment in July 31, 1994 and have been recommended to the shareholders for
ratification as auditors for the year ending July 31, 2001 by the Company's
Board of Directors. A representative of KPMG LLP is expected to be present at
the Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of KPMG LLP to serve as the Company's independent
auditors for the fiscal year ending July 31, 2001.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend. Discretionary authority with respect to
such other matters is granted by the execution of the enclosed Proxy.
FOR THE BOARD OF DIRECTORS
COPART, INC.
By: /s/ Paul A. Styer
--------------------------
Paul A. Styer, Secretary
Dated: October 31, 2000
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Site of the 2000 Annual Shareholder Meeting
Directions to: Copart Salvage Auto Auctions
5500 E. Second Street
Benicia, California 94510
From: San Francisco Airport
Exit the airport on Highway 101 Northbound toward San Francisco. As you
enter San Francisco follow the signs directing you towards the Bay Bridge. This
is Interstate 80 Eastbound. Follow Interstate 80 over the Bay Bridge and
continue Eastbound on Interstate 80. When you reach the other side of the Bay
Bridge stay in the left lanes. Follow Interstate 80 approximately 15 miles to
the Carquinez Bridge. After crossing the Carquinez Bridge, exit onto Interstate
780 towards Benicia. Follow 780 approximately 7 miles, get in the left lane and
make a left turn onto 680 Eastbound towards Sacramento. The second exit is Lake
Herman Rd. Turn left over freeway and make the first left turn onto East Second,
then go to the first building on the left at 5500 E. Second Street.
14
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PROXY
COPART, INC.
Proxy for 2000 Annual Meeting of Shareholders
December 5, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Copart, Inc. (the "Company") hereby revokes all
previous proxies and appoints Willis J. Johnson or Paul A. Styer or either of
them, with full power of substitution, as the proxy of the undersigned to vote
and otherwise represent all of the shares registered in the name of the
undersigned at the 2000 Annual Meeting of Shareholders of the Company to be held
on Tuesday, December 5, 2000, at 9:00 a.m., at the Company's corporate
headquarters located at 5500 E. Second Street, Second Floor, Benicia,
California, and any adjournment thereof, with the same effect as if the
undersigned were present and voting such shares on the following matters and in
the following manner set forth on the reverse side.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
<PAGE>
Please Mark
|X| votes as in
this example.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE IF NO SPECIFICATION IS MADE. THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR EACH OF THE PERSONS AND PROPOSALS BELOW, AND FOR SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AS THE PROXYHOLDERS
DEEM ADVISABLE.
1. Election of Directors
Nominees: (01) Willis J. Johnson, (02) A. Jayson Adair,
(03) James E. Meeks, (04) Marvin L. Schmidt,
(05) James Grosfeld, (06) Harold Blumenstein, (07) Jonathan Vannini
FOR WITHHELD
ALL FROM ALL
NOMINEES |_| |_| NOMINEES
|_| ______________________________________
For all nominees except as noted above
2. Ratification of KPMG LLP as independent FOR AGAINST ABSTAIN
auditors for the Company for the |_| |_| |_|
current fiscal year ending July 31, 2001
MARK HERE IF YOU PLAN TO ATTEND THE MEETING |_|
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE
THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
Sign exactly as your name(s) appears on your stock certificate. A corporation is
requested to sign its name by its President or other authorized officer, with
the office held designated. Executors, administrators, trustees, etc. are
requested to so indicate when signing. If stock is registered in two names, both
should sign.
Signature: _______________ Date: _______ Signature: _______________ Date: ______