PROXY STATEMENT PURSUANT TO
SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
COMMODORE HOLDINGS LIMITED
---------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
-------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
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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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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[COMMODORE LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 11, 1998
Notice is hereby given that the Annual Meeting of Stockholders of
Commodore Holdings Limited (the "Company") will be held on Wednesday, February
11, 1998, at 9:30 a.m., Eastern Standard Time, at the offices of Broad and
Cassel, Miami Center, 201 South Biscayne Boulevard, Suite 3000, Miami, Florida
33131, for the following purposes, as described in the attached proxy statement:
A. To elect two directors to serve on the Company's Board of
Directors until the annual meeting of stockholders to be held
in 2001, and until their successors are elected and qualified;
B. To appoint Grant Thornton LLP, as the Company's independent
auditors for the Company's 1998 fiscal year and to authorize
the directors to approve their fee; and
C. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 17,
1997, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and at any adjournment thereof.
Accordingly, only stockholders of record at the close of business on that date
will be entitled to vote at the meeting.
Under applicable Bermuda law and the Company's Bye-Laws, if a quorum is
present, the favorable vote of a simple majority of the votes cast by holders of
the Company's common stock, voting together as a single class in person or by
proxy at the Annual Meeting of Stockholders, will be required in order to
approve the matters referred to in the proposals above.
The independent auditors' report and financial statements for the
Company's 1997 fiscal year will also be presented at the Annual Meeting of
Stockholders.
By order of the Board of Directors.
BLANCA SANTOS
January 13, 1998 Secretary
YOU ARE URGED TO COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN
THE ACCOMPANYING POSTAGE-FREE ENVELOPE.
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<PAGE>
COMMODORE HOLDINGS LIMITED
4000 Hollywood Boulevard
Suite 385, South Tower
Hollywood, Florida 33021
(954) 967-2100
-------------------
PROXY STATEMENT
-------------------
ANNUAL MEETING OF STOCKHOLDERS
February 11, 1998
This Proxy Statement has been prepared and is furnished by the Board of
Directors of Commodore Holdings Limited (the "Company") in connection with the
solicitation of proxies for the Annual Meeting of Stockholders of the Company to
be held on February 11, 1998, and at any adjournment thereof, for the purposes
set forth in the accompanying notice of meeting (the "Annual Meeting").
It is anticipated that this Proxy Statement and the accompanying form
of proxy will be mailed to stockholders on or about January 16, 1998. The
Company's Annual Report, including audited financial statements for the fiscal
year ended September 30, 1997, is being mailed or delivered concurrently with
this Proxy Statement. The Annual Report is not to be regarded as proxy
soliciting material.
Only holders of record of the Company's common stock, $.01 par value
(the "Common Stock"), on the books of the Company at the close of business on
December 17, 1997 are entitled to vote at the meeting. On that date, there were
5,581,933 issued and outstanding shares of Common Stock. The holder of each
share of Common Stock is entitled to one vote on each matter to be presented at
the meeting.
Shares represented by a properly executed proxy received in time to
permit its use at the meeting or any adjournment thereof will be voted in
accordance with the instructions indicated therein. If no instructions are
indicated, the shares represented by the proxy will be voted for the election of
all nominees for director, for the appointment of Grant Thornton LLP as the
Company's independent auditors and the authorization of the directors to approve
their fee and, in the discretion of the proxy holders, as to any other matter
which may properly come before the meeting. A stockholder who has given a proxy
may revoke it at any time before it is voted at the meeting by giving written
notice of revocation to the Secretary, by submitting a proxy bearing a later
date, or by attending the meeting and voting in person.
<PAGE>
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but directors, officers and regular
employees of the Company may solicit proxies personally, by telephone or by
facsimile transmissions. The Company will reimburse custodians, nominees or
other persons for their out-of-pocket expenses in sending proxy material to
beneficial owners.
In determining the presence of a quorum at the Annual Meeting,
abstentions are counted and broker non-votes are not. The Company's Bye-Laws
provide that the affirmative vote of a majority of the shares cast shall be the
act of the stockholders, except as otherwise provided, among other things, by
the Bermuda Companies Act 1981, as amended (the "Act"). The Act, together with
the Company's Bye-Laws, provide that directors are elected by a majority of the
votes cast. Under the Act, abstentions do not count as votes cast. Therefore,
under the Act and the Company's Bye-Laws, as to all matters to be voted on by
stockholders at the Annual Meeting, abstentions and broker non-votes will have
no legal effect on whether a matter is approved.
In order to assure that your interests will be represented, you are
requested, regardless of the number of shares you hold, to sign the proxy and
return it promptly in the enclosed envelope.
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<PAGE>
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock, as of January 1, 1998, by
each person known by the Company to be the beneficial owner of more than 5% of
the Company's outstanding Common Stock, by each director, by each named
executive officer, and by all directors and officers of the Company as a group.
Except as indicated below, (i) the address for each 5% stockholder is c/o
Commodore Holdings Limited, 4000 Hollywood Boulevard, Suite 385, South Tower,
Hollywood, Florida 33021; and (ii) all shares are owned directly with sole
voting and dispositive power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ -------------------- --------
<S> <C> <C> <C>
a) Directors and Officers
Jeffrey I. Binder, Rosalie Binder, and
JeMJ Financial Services, Inc.(1)(2)
9350 South Dixie Highway, Suite 1220
Miami, FL 33156............................................. 956,667 17.1%
Ralph V. De Martino(2)...................................... 20,000 *
Arnold Adolphus Francis, Q.C.(3)............................ 0 0%
Gordon Leonard Hill(4)...................................... 0 0%
Mark J. Maged(2)............................................ 20,000 *
Frederick A. Mayer(2)....................................... 525,000 9.0%
Alan Pritzker(2)............................................ 35,417 *
James R. Sullivan(2)........................................ 41,667 *
All directors and officers as a group(5)
(8 persons including those named above).................. 1,598,751 26.9%
b) Other Beneficial Owner
Eff-Shipping, Ltd.(6)
c/o EffJohn North America
Suite 108, The Atrium Center
1515 N. Federal Highway
Boca Raton, Florida 33432................................... 1,027,230 15.5%
</TABLE>
- --------------------
* Represents beneficial ownership of less than 1%.
-3-
<PAGE>
(1) Mr. Binder owns 500,000 shares of Common Stock together with his wife, as
tenants-by- the-entireties. JeMJ Financial Services, Inc., a company
controlled by Mr. Binder, owns 440,000 shares of Common Stock. This
amount excludes 500,000 shares of Common Stock which Mr. Binder, his wife
and JeMJ have a right to purchase pursuant to warrants, which warrants
are presently exercisable.
(2) This amount includes shares of Common Stock which may be purchased
pursuant to stock options and/or warrants held by such person which are
either presently exercisable or become exercisable within 60 days after
January 1, 1998 as follows: Jeffrey I. Binder, 16,667; Ralph V.
DeMartino, 20,000; Mark J. Maged, 20,000; Frederick A. Mayer, 225,000;
Alan Pritzker, 35,417; and James R. Sullivan, 41,667.
(3) The Honorable Wayne L. Furbert, C.P.A., J.P., M.P., serves as Alternate
Director for Mr. Francis. Mr. Furbert does not beneficially own any
shares of Common Stock.
(4) Helen Patricia Forrest serves as an Alternate Director for Mr. Hill. Ms.
Forrest does not beneficially own any shares of Common Stock.
(5) Excludes 500,000 shares of Common Stock, which such persons may acquire
pursuant to warrants which are presently exercisable. Includes warrants
and options to purchase 358,751 shares of Common Stock, which warrants
and options are presently exercisable.
(6) Represents series A preference shares (the "Series A Preference Shares"),
which Eff- Shipping, Ltd. may presently convert into 1,027,230 shares of
Common Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on a review of the copies of
the reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended September 30, 1997, the
Company's directors and executive officers complied with all applicable filing
requirements of Section 16(a) of the Securities Exchange Act of 1934 except that
Mr. Hill failed to file one report on a timely basis, which report stated his
appointment as a director of the Company.
-4-
<PAGE>
ELECTION OF DIRECTORS
The persons named in the accompanying form of proxy intend to vote all
valid proxies received in favor of the election of each of the persons named
below as nominees for director unless authority is withheld. Directors elected
at the meeting will serve until the Annual Meeting of Stockholders to be held in
the year 2001, and until their successors are elected and qualified. In the
event that any nominee is unable or unwilling to serve, discretionary authority
is reserved to the persons named in the accompanying form of proxy to vote for
substitute nominees. Management does not anticipate that such an event will
occur. Each director shall be elected by a majority of the votes cast.
The Board of Directors is divided into three classes. There are two
directors in each class, and each class is elected every third year. Directors
who are voted into a class during the term of the class may serve less than a
three-year term. Each Director will hold office for the term to which he is
elected and until his successor is duly elected and qualified. Mr. Jeffrey I.
Binder and Mr. Frederick A. Mayer have terms expiring at this Annual Meeting and
are nominees for re-election. The Board of Directors elects officers annually
and such officers serve at the discretion of the Board of Directors.
(A) NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
AGE AS OF BUSINESS EXPERIENCE CURRENT
NOVEMBER 1, DURING PAST FIVE YEARS DIRECTOR TERM
NAME 1997 AND DIRECTORSHIPS SINCE EXPIRES
- ---- ---- ------------------- ------- -------
<S> <C> <C> <C> <C>
Jeffrey I. Binder (1)............. 51 Chairman of the Board since 1995; 1995 1998
Chairman of the Board and a
director of Tel-Med, Inc., a
publicly traded company which
develops medical products and
provides medical related services,
since 1991; Chairman of the Board
and a director of H.P. America,
Inc., a private holding company
which owns health maintenance
organizations and medical practices
companies, since 1995; Chairman of
the Board and a director of JeMJ
Financial Services, Inc., a private
holding company since 1989;
President and a director of Sector
Associates, Ltd., a public company
engaged in the furniture retail
business, from 1989 until 1993.
Frederick A. Mayer................ 63 Vice Chairman of the Board and 1995 1998
Chief Executive Officer since 1995;
Co-founder and Vice Chairman of
Regency Cruises Inc. ("Regency")
between 1984 and April 1995;
President of Exprinter
International USA, a travel
organization, between 1969 and
1995; President of Marmara Marine,
Inc. which owns the S/S United
States, since 1992. In November
1995 Regency filed for Chapter 11
bankruptcy protection.
-5-
<PAGE>
(B) CONTINUING DIRECTORS
AGE AS OF BUSINESS EXPERIENCE CURRENT
NOVEMBER 1, DURING PAST FIVE YEARS DIRECTOR TERM
NAME 1997 AND DIRECTORSHIPS SINCE EXPIRES
- ---- ---- ------------------- ------- -------
<S> <C> <C> <C> <C>
Arnold Adolphus 75 Director of the Company since 1995; 1995 1999
Francis, CBE, Q.C., partner in Richards, Francis &
J.P............................. Francis, a law firm based in
Bermuda, since 1980. Richards,
Francis & Francis acts as Bermuda
counsel to the Company.
Gordon Leonard Hill............... 53 Director of the Company since 1997; 1997 1999
associate in Richards, Francis &
Francis since 1996; attorney in
Appleby, Spurling & Kempe, a law
firm, between 1994 and 1996;
attorney in Woolley, Dale & Dingwell,
a law firm, between 1982 and 1994.
Helen Patricia Forrest............ 39 Alternate Director for Mr. Hill and 1995 1999
his predecessor, Mr. Miller, since
June 1996; associate in Richards,
Francis & Francis since 1991.
Honorable Wayne L. 41 Alternate Director for Mr. Francis 1995 1999
Furbert, C.P.A., J.P., since 1995; financial controller of
M.P............................. Richards, Francis & Francis since
1983; Chairman of the Finance
Committee of the Bermuda Hospitals
Board since 1982; Minister of
Transportation in Bermuda.
Ralph V. De Martino(1)(2)......... 43 Principal of De Martino Finkelstein 1996 2000
Rosen & Virga since 1983 and
managing partner since 1987; member
of the Committee on Corporate,
Banking and Business Law of the Bar
Association of the District of
Columbia and the American Bar
Association.
Mark Maged(1)(2).................. 66 Chairman of MJM Associates, LLC 1996 2000
since 1995; Chairman of Internet
Tradeline Inc. since 1995;
international investment and finan-
cial advisor to a number of private
and public institutions and
corporations since 1984; Presi-
dent and Chief Executive Officer of
Schroders, Inc. and Chairman and
Chief Exec- utive Officer of its
subsidiary, J. Henry Schroder Bank
and Trust, the U.S. arm of the
British merchant bank, Schroders
PLC, between 1974 and 1984.
</TABLE>
- ------------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
-6-
<PAGE>
BOARD OF DIRECTORS
GENERAL
The Board of Directors of the Company held three meetings during fiscal
1997 and acted by unanimous written consent five times. The Board has a
Compensation Committee and an Audit Committee. The Compensation Committee and
the Audit Committee each met one time during fiscal 1997. The Board does not
have a Nominating Committee. During fiscal 1997, each director participated in
or attended at least 75% of the meetings and actions by the Board and any
committee on which such director served, except that Mr. Francis participated in
63% of the meetings and actions of the Board of Directors.
The Compensation Committee reviews and sets the level for executive
compensation for the ensuing year; reviews and recommends the terms of the
employment agreements for the Company's executives; sets bonuses for the
Company's executives; and determines the number of stock options and the terms
of such options to be awarded to the Company's executives and eligible
employees. The Audit Committee performs the following principal functions:
recommends to the Board of Directors the engagement of independent auditors for
the ensuing year; reviews the scope of the annual audit; reviews with auditors
the results of the audit engagement, including review of the financial
statements and the management letter; and, reviews the scope of and compliance
with the Company's internal controls.
COMPENSATION
Each independent director (a director who is not an officer or employee
of the Company or appointed to satisfy Bermuda law) receives $10,000 per year,
paid quarterly, for service on the Company's Board of Directors and the
committees thereof. Directors who are officers or employees of the Company, or
appointed to satisfy Bermuda law, receive no additional compensation for
attendance at Board or committee meetings.
During fiscal 1997, the Company also awarded each independent director
a ten-year option to purchase 30,000 shares of Common Stock under the Company's
1995 Stock Plan (the "1995 Stock Plan"). The options become exercisable in
annual increments of 10,000, beginning on the date of grant. The exercise price
of the options exceeded the fair market value of the Company's Common Stock on
the date of grant.
-7-
<PAGE>
COMPENSATION OF OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to total
compensation earned or paid by the Company to the Chief Executive Officer of the
Company during the fiscal years ended September 30, 1995, 1996 and 1997, and
each of the Company's four other most highly compensated executive officers or
significant employees whose total annual salary and bonus exceeded $100,000
during such fiscal year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
LONG TERM
COMPENSATION
AWARDS
------
OTHER SECURITIES ALL
NAME & PRINCIPAL FISCAL SALARY BONUS ANNUAL UNDERLYING OTHER
POSITION YEAR ($) ($) COMPENSATION(1) OPTIONS/WARRANTS COMPENSATION(1)
-------------------- ------ --------- --------- --------------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
FREDERICK A. MAYER, 1997 $175,000 $12,250 * 75,000(3) $53
VICE-CHAIRMAN OF THE 1996 175,000 0 * 0 67
BOARD AND CHIEF EXECU- 1995(2) 37,019 0 * 200,000 12
TIVE OFFICER
JEFFREY I. BINDER, 1997 150,000 10,500 * 50,000(3) 53
CHAIRMAN OF THE BOARD 1996 150,000 0 * 0 67
1995(2) 31,250 0 * 500,000(4) 12
JAMES A. SULLIVAN, 1997 150,000 10,500 * 50,000(3) 53
PRESIDENT 1996 150,000 0 * 0 67
1995(2) 31,250 0 * 100,000 12
ALAN PRITZKER, 1997 119,192 7,851 * 50,000(3) 53
VICE PRESIDENT, FINANCE 1996 112,154 0 * 0 67
AND CHIEF FINANCIAL 1995(2) 20,625 0 * 25,000 12
OFFICER
</TABLE>
- --------------------
* Aggregate amount of Other Annual Compensation for each other person is
less than the lesser of $50,000 or 10% of such person's annual salary and
bonus.
(1) All Other Compensation represents premiums paid for life insurance for
the named executive officers.
(2) Fiscal 1995 compensation reflects amounts earned by the named executive
officers during the portion of the fiscal year beginning in May 1995,
when they began their employment with the Company.
(3) This number represents options granted to the named executive officer
under the 1995 Stock Plan, which are exercisable in annual one-third
increments, beginning on October 1, 1997.
(4) On July 14, 1995, in connection with the Company's acquisition of
Commodore Cruise Line, the Company issued warrants to purchase Common
Stock to Mr. Binder and his wife, Rosalie Binder, as well as to JeMJ
Financial Services, Inc., a company controlled by Mr. Binder, which
warrants are presently exercisable.
-8-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information regarding the grant of stock
options to the named executive officers in fiscal year 1997. In addition,
hypothetical gains of 5% and 10% are shown for these stock options. These
hypothetical gains are based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the stock options were granted (when
the market price was $2.50 per share) over the full option term. No stock
appreciation rights were granted during the 1997 fiscal year.
<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
OPTIONS ASSUMED ANNUAL RATES OF
GRANTED TO STOCK PRICE APPRECIATION FOR
EMPLOYEES IN EXERCISE OPTION TERM(1)
NUMBER OF FISCAL YEAR PRICE EXPIRATION -------------
NAME OPTIONS GRANTED(2) 1997 PER SHARE DATE 5% 10%
---- ------------------ ------ --------- ----------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Frederick A. Mayer 75,000 23.0% $2.75 9/30/06 $99,186 $280,076
Jeffrey I. Binder 50,000 15.3% $2.75 9/30/06 66,124 186,718
James A. Sullivan 50,000 15.3% $2.75 9/30/06 66,124 186,718
Alan Pritzker 50,000 15.3% $2.75 9/30/06 66,124 186,718
</TABLE>
- --------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term, which is
assumed to be 10 years for this purpose. These gains are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually from
the date that the respective options were granted through their assumed
expiration date. Actual gains, if any, on stock option exercises will
depend on the future performance of the Common Stock.
(2) The options, which were granted under the Company's 1995 Stock Plan, are
exercisable in annual increments of one-third, beginning on October 1,
1997.
-9-
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Set forth below is certain information pertaining to stock options and
warrants held by the named executive officers as of September 30, 1997. None of
the named executive officers exercised any stock options or warrants in the
fiscal year ended September 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS/ IN-THE-MONEY OPTIONS/WARRANTS
WARRANTS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
---------------------------- -----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Frederick A. Mayer 200,000 75,000 $268,000 $ (2)
Jeffrey I. Binder 500,000(3) 50,000 (2) (2)
James A. Sullivan 0 150,000 0 134,000(4)
Alan Pritzker 12,500 62,500 16,750 16,750(5)
</TABLE>
- --------------------
(1) Based on a fair market value of $2.34 per share for the Common Stock, as
determined by using the closing bid quotation on the Nasdaq National Market
on September 30, 1997.
(2) Options were not in-the-money on September 30, 1997.
(3) Of these warrants, 250,000 are held by JeMJ Financial Services, Inc., a
company controlled by Mr. Binder.
(4) This number represents the value of warrants to purchase 100,000 shares of
Common Stock, which warrants were in-the-money on September 30, 1997.
Options to purchase 50,000 shares of Common Stock were not in-the-money on
September 30, 1997.
(5) This number represents the value of warrants to purchase 12,500 shares of
Common Stock, which warrants were in-the-money on September 30, 1997.
Options to purchase 50,000 shares of Common Stock were not in-the-money on
September 30, 1997.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Company's management compensation philosophy is to attract and
retain quality executives through a combination of competitive base salaries and
performance-based bonuses. The Company also believes that its officers and key
employees should have an equity interest in the Company, either through direct
stock ownership or through ownership of stock options. As a result, the Company
grants stock options to its officers and key employees.
BASE SALARY. The Company's approach to base compensation is to offer
competitive salaries in comparison to market standards. In 1995, the Company
conducted a survey of the salaries of officers of publicly held companies in the
Company's industry and established officer salaries pursuant to employment
contracts at levels somewhat lower than these companies, to reflect the
-10-
<PAGE>
Company's smaller size and short operating history. The employment contracts
generally contained annual increases of four percent to gradually increase each
executive's salary to market level as the Company grew and prospered. In each of
May 1996 and 1997, the Company's executives entitled to such increases waived
them to enhance shareholder value, and the first such increase was implemented
in October 1997. Increases in base compensation for executives without long-term
contracts are based on the performance of the executive, the performance of the
Company and salaries paid to officers of similar companies. Mr. Mayer has a
five-year employment contract with the Company. His salary was established based
on the criteria described above.
BONUS COMPENSATION. The Company rewards its executive officers with annual
bonuses based on the performance of the Company and each executive. Bonuses are
generally paid if the Company surpasses a certain financial target for annual
net income. Both the performance standards for executives and the financial
target for the Company are generally established each year by the Compensation
Committee. For fiscal 1997, the Company paid each executive officer a bonus
equal to 7% of each executive officer's fiscal 1996 salary.
STOCK OPTIONS. Stock options are currently the Company's principal vehicle
for payment of long-term incentive compensation. Stock options generally are
granted at 10% over the prevailing market price on the date of grant and will
have value only if the Company's stock price increases. Options granted under
the Company's 1995 Stock Plan generally vest in annual increments over 3 or 4
years beginning one year after the date of the grant. Grants of stock options
generally are based upon the performance of the Company, the level of the
executive's position within the Company and an evaluation of the executive's
past and expected future performance. The Company grants stock options
periodically, but not necessarily on an annual basis. During fiscal 1997, the
Company granted stock options to all of the named executive officers, including
Mr. Mayer, who received options to purchase 75,000 shares of Common Stock.
Jeffrey I. Binder
Ralph V. DeMartino
Mark Maged
EMPLOYMENT AGREEMENTS
As of May 3, 1995, the Company entered into a five-year agreement with its
Chairman of the Board, Mr. Jeffrey I. Binder. Pursuant to such employment
agreement, Mr. Binder receives an annual salary of $150,000, to be increased 4%
annually, and certain perquisites. On July 15, 1997, the Company amended Mr.
Binder's employment agreement to extend the term of Mr. Binder's employment
until May 3, 2002. Upon termination of Mr. Binder's employment, he has agreed
not to compete with the Company for one year under certain circumstances
described therein. In the event a change of control of the Board of Directors of
the Company occurs, he shall receive compensation for the greater of one year or
the remainder of his employment term.
As of May 3, 1995, the Company entered into a two-year employment agreement
with Mr. Frederick A. Mayer, its Vice-Chairman of the Board of Directors, and
Chief Executive Officer. Pursuant to the employment agreement, Mr. Mayer
receives an annual salary of $175,000, to be increased 4% annually, and certain
perquisites. Mr. Mayer also received a seven-year warrant
-11-
<PAGE>
to purchase 200,000 shares of Common Stock at an exercise price of $1.00 per
share. Mr. Mayer has certain rights to demand registration of the shares of
Common Stock underlying his warrant; however, the sale of such shares is subject
to a 12-month lock-up period. On May 3, 1997, the Company amended Mr. Mayer's
employment agreement to extend the term of Mr. Mayer's employment until May 3,
2002. Upon termination of Mr. Mayer's employment, he has agreed not to compete
with the Company for one year under certain circumstances described therein. In
the event a change of control of the Board of Directors of the Company occurs,
he shall receive compensation for the greater of one year or the remainder of
his employment term.
As of May 3, 1995, the Company entered into a two-year employment agreement
with Mr. James A. Sullivan, its President. Pursuant to the employment agreement,
Mr.Sullivan receives an annual salary of $150,000 and certain perquisites. Mr.
Sullivan also received a seven-year warrant to purchase 100,000 shares of Common
Stock at an exercise price of $1.00 per share. On February 5, 1997, the Company
decided to defer the renewal of Mr. Sullivan's employment agreement until the
Company's Compensation Committee's next meeting. In the interim, the Company
caused its wholly-owned subsidiary, New Commodore Cruise Line Limited, to employ
Mr. Sullivan on a month-to-month basis and provide him with three months notice
in the event the Company decided to terminate his employment.
As of May 3, 1995, the Company entered into a two-year employment agreement
with Mr. Alan Pritzker, its Vice President, Finance and Chief Financial Officer.
Pursuant to the employment agreement, Mr. Pritzker receives an annual salary of
$99,000, which was increased to $117,000 during fiscal 1996. Mr. Pritzker also
received a seven-year warrant to purchase 25,000 shares of Common Stock at an
exercise price of $1.00 per share. On February 5, 1997, the Company decided to
defer the renewal of Mr. Pritzker's employment agreement until the Company's
Compensation Committee's next meeting. In the interim, the Company caused its
wholly-owned subsidiary, New Commodore Cruise Line Limited, to employ Mr.
Pritzker on a month-to-month basis and provide him with three months notice in
the event the Company decided to terminate his employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has a Compensation Committee which sets the compensation levels
for the Company's executive officers. One executive officer of the Company, Mr.
Binder, is a member of the Company's Compensation Committee. Mr. Binder abstains
from voting on issues concerning his own proposed compensation.
STOCK PERFORMANCE GRAPH
In accordance with Securities and Exchange Commission regulations, the
following graph compares the cumulative total stockholder return to the
Company's stockholders during the fourteen month period ended September 30, 1997
to the Nasdaq Stock Market (U.S.) and the Nasdaq Non-Financial Index.
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<PAGE>
COMPARISON OF THE FOURTEEN MONTH CUMULATIVE TOTAL RETURN (1)
AMONG COMMODORE HOLDINGS LIMITED, NASDAQ (U.S.) STOCK MARKET AND NASDAQ NON-
FINANCIAL INDEX FOR THE FOURTEEN MONTHS ENDED SEPTEMBER 30, 1997
[Insert Graph]
-----------------------------------------------
Month and Year July 16, 1996 Sept. 1996 Sept. 1997
-----------------------------------------------
Nasdaq US 100 117 160
-----------------------------------------------
Nasdaq Non-Financial 100 107 143
-----------------------------------------------
Commodore Holdings 100 54 51
-----------------------------------------------
- --------------------
(1) Assumes that the value of the investment in the Company and each index was
$100 on July 16, 1996, (the date the Company's Common Stock was first
publicly traded), and that all dividends are reinvested.
-13-
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
As part of the purchase price for the Company's assets, the Company paid
$5,000,000 to EffJohn International B.V. ("EffJohn") and issued it 1,000,000
Series A Preference Shares with an agreed value of $4.00 per share. EffJohn
receives cash and stock dividends annually on the Series A Preference Shares.
During fiscal 1997, EffJohn received a cash dividend of $200,949 and a stock
dividend of 20,251 Series A Preference Shares. In addition, EffJohn
International Cruise Holdings, Inc., an affiliate of EffJohn, loaned the Company
$24,500,000 (the "Loan"). The Loan is secured by substantially all of the assets
of the Company, including first preferred ship's mortgages on the M/V Enchanted
Isle and the M/V Universe Explorer.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the firm of Grant Thornton LLP,
Certified Public Accountants, 200 East Broward Boulevard, Suite 2000, Fort
Lauderdale, Florida 33301-1915, be appointed to serve as independent auditors of
the Company for the ensuing fiscal year. In addition, the Board of Directors
recommends that the stockholders authorize the Board of Directors to approve the
auditors' fee. Grant Thornton LLP was the independent public auditor of the
Company for the fiscal year ended September 30, 1997. A representative of Grant
Thornton is expected to be present at the Annual Meeting, will have an
opportunity to make a statement if such representative desires to do so, and is
expected to be available to respond to appropriate questions. The affirmative
vote of a majority of the votes cast is necessary for the appointment of Grant
Thornton LLP, and the authorization of the Board of Directors to approve the
auditors' fee.
STOCKHOLDER PROPOSALS
Stockholder proposals which are to be considered for inclusion in the
proxy materials of the Company for its 1999 Annual Meeting of Stockholders must
be received by the Company by September 16, 1998. Such proposals must comply
with requirements as to the form and substance established by applicable law and
regulations in order to be included in the proxy statement.
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<PAGE>
ADDITIONAL INFORMATION
The Board of Directors is not aware of any matters to be presented at
the meeting other than the matters described herein and does not intend to bring
any other matters before the meeting. However, if any other matters should come
before the meeting, or any adjournment thereof, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of Directors
BLANCA SANTOS
Secretary
January 13, 1998
Hollywood, Florida
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<PAGE>
COMMODORE HOLDINGS LIMITED
4000 HOLLYWOOD BOULEVARD
SUITE 385, SOUTH TOWER
HOLLYWOOD, FLORIDA 33021
PROXY
The undersigned hereby appoints Jeffrey I. Binder and Frederick A. Mayer,
and each of them with the power to appoint his substitute, as proxies, and
hereby authorizes either of them to represent and to vote all shares of common
stock of the Company held of record by the undersigned on December 17, 1997, at
the Annual Meeting of Stockholders to be held on February 11, 1998, or any
adjournment thereof, upon the matters referred to below, and, in their
discretion, upon any other business that may come before the meeting.
1. Election of Directors
<TABLE>
<S> <C>
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the contrary) [ ] for all such nominees listed below [ ]
</TABLE>
Jeffrey I. Binder Frederick A. Mayer
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PLEASE
DRAW A LINE THROUGH THAT NOMINEE'S NAME)
2. To appoint Grant Thornton LLP as auditors of the Company's financial
statements for the fiscal year ending September 30, 1998 and to authorize
the directors to approve their fee.
[ ] For [ ] Against [ ] Abstain
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMMODORE
HOLDINGS LIMITED. This Proxy when executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR the nominees listed in Proposal 1 and FOR Proposal 2.
The undersigned stockholder hereby acknowledges receipt of the Notice of
Annual Meeting and Proxy Statement dated January 13, 1998 and hereby revokes
any proxy or proxies heretofore given. This proxy may be revoked at any time
prior to the Annual Meeting. If you received more than one proxy card, please
date, sign and return all cards in the accompanying envelope.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in the corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED: _____________________________, 1998
__________________________________________
__________________________________________
Signature(s)
PLEASE MARK BOXES IN BLUE OR BLACK INK
PLEASE SIGN, DATE AND MAIL, IN THE ENVELOPE
PROVIDED
