SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
Central Parking Corporation
--------------------------------------------------------------------------------
(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)(1) 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.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
[CENTRAL PARKING CORP LOGO]
2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE 37212
To Our Shareholders:
On behalf of the Board of Directors, it is our pleasure to invite you to
attend the Annual Meeting of Shareholders of Central Parking Corporation.
As shown in the formal notice enclosed, the meeting will be held on
Tuesday, February 19, 2002 at 10:00 a.m. (Central Standard Time) at our
corporate headquarters in Nashville, Tennessee. The purpose of this year's
meeting is to elect directors, approve an increase in the shares reserved for
issuance under the Company's 1995 Incentive and Nonqualified Stock Option Plan
for Key Personnel, and transact such other business as may properly come before
the meeting. The meeting will include a report on Central Parking Corporation's
activities for the fiscal year ended September 30, 2001, and there will be an
opportunity for comments and questions from shareholders.
Whether or not you plan to attend the meeting, it is important that you are
represented and that your shares are voted. Accordingly, after reviewing the
Proxy Statement, we ask you to complete, sign and date the proxy card and return
it as soon as possible in the postage-paid envelope provided. Early return of
your proxy will permit us to avoid the expense of soliciting the votes of
shareholders who are late sending in their proxy cards.
Sincerely,
/s/ MONROE J. CARELL, JR.
Monroe J. Carell, Jr.
Chairman of the Board
January 15, 2002
CENTRAL PARKING CORPORATION
2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE 37212
(615) 297-4255
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 19, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Central
Parking Corporation, a Tennessee corporation (the "Company"), will be held at
the Company's headquarters, 2401 21st Avenue South, Third Floor, Nashville,
Tennessee, on Tuesday, February 19, 2002, at 10:00 a.m. (Central Standard Time)
(the "Annual Meeting") for the following purposes:
1. To elect ten directors for the term ending at the Annual Meeting of
Shareholders to be held in 2003;
2. To approve an amendment to the Company's 1995 Incentive and Nonqualified
Stock Option Plan for Key Personnel to increase the number of shares
reserved for issuance under the plan by 3.5 million shares of common
stock; and
3. To transact such other business as may properly come before the meeting
and any continuations and adjournments thereof.
The Board of Directors has fixed the close of business on December 21, 2001
as the record date for determining the holders of the common stock of the
Company entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof.
The common stock of the Company should be represented as fully as possible
at the Annual Meeting. Therefore, please sign and return the enclosed proxy at
your earliest convenience. You may, of course, revoke your proxy at any time
before it is voted at the meeting. However, signing and returning the proxy will
assure your representation at the Annual Meeting if you do not attend.
By Order of the Board of Directors
/s/ HENRY J. ABBOTT
Henry J. Abbott
Secretary
Nashville, Tennessee
January 15, 2002
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN,
DATE AND RETURN YOUR PROXY.
CENTRAL PARKING CORPORATION
2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE 37212
(615) 297-4255
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 19, 2002
INTRODUCTION AND VOTING PROCEDURES
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Central Parking
Corporation, a Tennessee corporation ("Central Parking" or the "Company"), for
use at the Annual Meeting of Shareholders of the Company to be held at the
Company's headquarters, 2401 21st Avenue South, Third Floor, Nashville,
Tennessee, on Tuesday, February 19, 2002, at 10:00 a.m. (Central Standard Time)
and at any continuations and adjournments thereof (the "Annual Meeting"). This
Proxy Statement is first being mailed on or about January 15, 2002, to holders
of the common stock, par value $.01 per share, of the Company (the "Common
Stock") of record at the close of business on December 21, 2001. The cost of
this solicitation will be borne by the Company.
The shares of Common Stock held by each shareholder who signs and returns
the enclosed proxy will be counted for purposes of determining the presence of a
quorum at the meeting unless such proxy shall be timely revoked. If the enclosed
form of proxy is executed and returned, it may, nevertheless, be revoked at any
time before it is voted by delivery of a written revocation or a duly executed
proxy bearing a later date to the Secretary of the Company at its headquarters
or by the shareholder personally attending and voting his or her shares at the
meeting.
The Board has fixed the close of business on December 21, 2001, as the
record date for the meeting. Only shareholders of record at the close of
business on December 21, 2001, are entitled to notice of and to vote at the
Annual Meeting. At the close of business on such date, there were 35,758,091
shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
Each share of Common Stock entitles the holder thereof to one vote on each
matter to be considered at the meeting. A quorum (i.e., holders of record of a
majority of the shares of Common Stock outstanding and entitled to vote at the
meeting) is required for any vote taken at the meeting. Assuming a quorum is
present with respect to such matters, the affirmative vote of a plurality of the
shares of Common Stock cast is required for the election of directors and the
affirmative vote of the holders of a majority of the shares of Common Stock
present is required for the approval of the amendment to the Company's 1995
Incentive and Nonqualified Stock Option Plan for Key Personnel and any other
matter submitted to a vote of the shareholders at the meeting. Under Tennessee
law, abstentions and broker non-votes (i.e., shares held by brokers or nominees
as to which instructions have not been received from the beneficial owners or
persons entitled to vote and as to which the broker or nominee does not have
discretionary power to vote on a particular matter) are treated as present and
entitled to vote and therefore, will be counted in determining whether a quorum
is present. However, abstentions and broker non-votes will not be counted as
affirmative votes and on the approval of the amendment to the Company's 1995
Incentive and Nonqualified Stock Option Plan for Key Personnel and any other
matters which require a majority vote for approval, will have the effect of a
negative vote. They have no legal effect on the election of directors.
The Annual Report to Shareholders of the Company (the "Annual Report") for
the fiscal year ended September 30, 2001, is being mailed concurrently with this
Proxy Statement to all holders of Common Stock of record at the close of
business on December 21, 2001. In addition, the Company has provided (at Company
expense) brokers, dealers, banks, voting trustees and their nominees with
additional copies of the Proxy Statement and the Annual Report for distribution
to beneficial owners of the Company's Common Stock as of the record date.
ADDITIONAL COPIES OF THE ANNUAL REPORT AND THE ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 2001 (BUT WITHOUT EXHIBITS TO THE FORM 10-K)
MAY BE OBTAINED WITHOUT CHARGE UPON REQUEST TO RICHARD JONARDI, CORPORATE
COMMUNICATIONS DEPARTMENT, 2401 21ST AVENUE SOUTH, SUITE 200, NASHVILLE,
TENNESSEE 37212; (615) 297-4255; OR ON THE INTERNET AT RJONARDI@PARKING.COM.
3
EACH PROPERLY EXECUTED PROXY RECEIVED IN TIME FOR THE MEETING WILL BE VOTED
AS SPECIFIED THEREIN. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
THEREBY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED HEREIN WHO ARE
STANDING FOR ELECTION AS DIRECTORS AND FOR THE APPROVAL OF THE AMENDMENT TO THE
1995 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN FOR KEY PERSONNEL. Management
does not know of any other matters that will be presented for action at the
Annual Meeting of Shareholders. If any other matter does come before the Annual
Meeting of Shareholders, however, the persons appointed in the proxy will vote
in accordance with their best judgment on such matter.
4
PROPOSAL I.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND BUSINESS
NAME AND AGE SINCE EXPERIENCE FOR LAST FIVE YEARS
------------ -------- -----------------------------------------------------
Monroe J. Carell, Jr., 70............. 1979 Chairman of the Board of Directors of the Company for
more than 20 years. Mr. Carell also served as Chief
Executive Officer until April 2001. Mr. Carell has
served as a trustee of Vanderbilt University since
1991 and is a life member of the Urban Land
Institute.
William J. Vareschi, Jr., 59.......... 2001 Vice Chairman and Chief Executive Officer of the
Company since April 2001. Mr. Vareschi served as
President and Chief Executive Officer of GE Engine
Services, a division of General Electric Company,
from January 1996 until his retirement in July
2000. Prior to January 1996, Mr. Vareschi served in
a number of positions of increasing responsibility
with General Electric, including Chief Financial
Officer of GE's Aircraft Engine business.
James H. Bond, 59..................... 1990 President-International Operations since October
2001. Mr. Bond has been employed by the Company
since 1971 in a variety of positions and served as
President and Chief Operating Officer until October
2001. Mr. Bond is also a member of the Urban Land
Institute and serves on the Board of Trust for the
Tennessee Repertory Theater.
William S. Benjamin (1), 37........... 1999 Mr. Benjamin is a partner in Apollo Real Estate
Advisors, a real estate investment firm. He joined
Apollo in 1995. From 1986 to 1995, Mr. Benjamin was
with the Real Estate Finance Group of Bankers Trust
New York Corp. Mr. Benjamin serves as a director of
a number of privately held real estate firms in the
United States and the United Kingdom.
Cecil Conlee, 65...................... 1996 Mr. Conlee has served as Chairman and Chief Executive
Officer of CGR Advisors, which provides real estate
investment advice and portfolio management
services, since January 1990. Mr. Conlee serves on
the Board of Directors of Oxford Industries, Inc.
and Crow Holdings Industrial Trust. Mr. Conlee
serves as a trustee of Vanderbilt University. Mr.
Conlee is a past trustee of the Urban Land
Institute and The International Council of Shopping
Centers. He is a director of Central Atlanta
Progress and The Southern Center for International
Studies.
5
DIRECTOR POSITIONS WITH COMPANY, DIRECTORSHIPS AND BUSINESS
NAME AND AGE SINCE EXPERIENCE FOR LAST FIVE YEARS
------------ -------- -----------------------------------------------------
Lewis Katz (2), 60.................... 1998 Mr. Katz serves as Chairman of the New Jersey Nets, a
National Basketball Association franchise. He
served as the Chief Executive Officer of Kinney
System Holding Corp., a parking services company,
from November 1990 until the Company acquired
Kinney in February 1998.
Edward G. Nelson, 70.................. 1993 Mr. Nelson formed Nelson Capital Corp., a merchant
banking firm, in 1985, and has served as the
President and Chairman of the Board of such firm
since its organization. Mr. Nelson serves as a
director of Advocat Inc., a long-term care facility
owner and operator; and Berlitz International,
Inc., a language services company. Mr. Nelson also
serves as a trustee of Vanderbilt University.
William C. O'Neil, Jr., 67............ 1993 Mr. O'Neil served as Chairman of the Board,
President, and Chief Executive Officer of
ClinTrials Research Inc., a clinical research
organization, from October 1989 to January 1998.
Mr. O'Neil is currently a private investor. He is a
director of Advocat Inc., Sigma Aldrich Corporation
and American HealthWays, Inc.
Richard H. Sinkfield, 59.............. 2000 Mr. Sinkfield is a senior partner with the law firm
of Rogers & Hardin LLP in Atlanta, Georgia. Mr.
Sinkfield served as Executive Vice President and
Chief Administrative Officer of United Auto Group,
Inc., an automobile retailer, from July 1997 to
March 1999, and as a director from 1993 to 1999. He
has served as a director of the Weyerhaeuser
Company, a paper products company, since 1993. Mr.
Sinkfield currently is a director of the
Metropolitan Atlanta Community Foundation, Inc., a
member of the Executive Board of the Atlanta Area
Council of the Boy Scouts of America and a member
of the Board of Trust of Vanderbilt University. He
is a former chairman of the Board of Atlanta Urban
League, Inc.
Julia Carell Stadler, 42.............. 1999 Mrs. Stadler was employed in various capacities by
the Company from 1981 to 1986. Mrs. Stadler serves
on the Board of Directors of Vanderbilt Children's
Hospital and is a member of its Executive
Committee. She also serves on the Board of
Directors of Friends of Warner Parks and serves as
secretary of its Executive Committee. Mrs. Stadler
is the daughter of Monroe J. Carell, Jr., Chairman
of the Company.
---------------
(1) Mr. Benjamin was appointed to the Board of Directors pursuant to the terms
of the agreement and plan of merger (the "Merger Agreement") by and among
the Company, Central Merger Sub, Inc., Allright Holdings, Inc., Apollo Real
Estate Investment Fund II, L.P. ("Apollo") and AEW Partners, L.P.,
6
("AEW"), dated as of September 21, 1998, and amended as of January 5, 1999.
The Merger Agreement provides that Apollo and AEW are each entitled to
designate one individual to the Company's Board of Directors. The Merger
Agreement further provides that if at anytime Apollo or AEW, with their
respective affiliates, individually own less than $50,000,000 worth of the
Company's Common Stock, the Company shall, at the next election of the Board
of Directors, have the right to decrease the number of appointees to the
Board that may be made by the shareholder failing to meet such threshold
from one to none. Apollo designated Mr. Benjamin to serve as its nominee.
AEW's nominee, Marc Davidson, did not stand for re-election to the Board in
February 2001, and AEW did not designate another nominee. According to
Amendment No. 1 to Schedule 13D filed with the Securities and Exchange
Commission by AEW on August 1, 2001, AEW and related entities had divested
all shares of Central Parking common stock held by AEW and related entities
as of such date.
(2) Mr. Katz was appointed to the Board of Directors pursuant to the terms of an
agreement entered into in connection with the Company's acquisition of
Kinney System Holding Corp. in February 1998. Under this agreement, the
Company agreed to use its best efforts to cause the Board to recommend Mr.
Katz, or in the event of the disability or death of Mr. Katz, a designee,
for election to the Board, for a period of three years after the date of the
acquisition.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED
NOMINEES. THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST BY THE SHARES
ENTITLED TO VOTE ON EACH DIRECTOR IS NECESSARY FOR HIS OR HER ELECTION.
7
PROPOSAL II.
INCREASE IN SHARES RESERVED FOR ISSUANCE UNDER THE 1995 INCENTIVE
AND NONQUALIFIED STOCK OPTION PLAN FOR KEY PERSONNEL
Under the Company's 1995 Incentive and Nonqualified Stock Option Plan for
Key Personnel (the "Key Personnel Plan"), options to purchase shares of Common
Stock are available for grant (i) to directors, key employees (including
officers), consultants, and advisors of the Company and its subsidiaries as an
incentive to such personnel and (ii) as substitute stock options for outstanding
stock options granted by companies acquired by Central Parking. The Key
Personnel Plan became effective on the date of the Company's initial public
offering in 1995. All thirteen executive officers (three of whom are directors)
and approximately 333 key employees currently hold options granted under the Key
Personnel Plan. The Key Personnel Plan originally allowed for the issuance of
options to purchase up to 1,417,500 shares of Common Stock (adjusted for stock
splits), in the aggregate, when taken together with the shares available for
issuance under the Company's 1995 Restricted Stock Plan (the "Restricted Stock
Plan"). The Key Personnel Plan was amended in March 1998 to increase the number
of shares reserved for issuance under the plan to 2,317,500 and again in
February 2000 to increase the number of shares reserved for issuance to
3,817,500.
On December 11, 2001, the Company's Board of Directors approved an
amendment to the Key Personnel Plan to increase the number of shares of Common
Stock reserved for issuance under such plan by 3,500,000, so that the total
number of shares reserved for issuance under the Key Personnel Plan and the
Restricted Stock Plan would be 7,317,500. As of January 10, 2002, 4,941,881
options had been granted and were outstanding and 945,685 had been exercised
under the Key Personnel Plan. As of January 10, 2002, the per share market value
of the Common Stock underlying such outstanding options was $19.52 (closing sale
price as of such date). The exercise prices for outstanding options granted
under the plan range from $8.00 to $50.375 per share. This amendment has been
recommended by the Board of Directors for approval by the Company's
shareholders. The amendment will provide sufficient shares to cover exercises of
recent option grants (described below) and the flexibility to award additional
options in the future as an incentive in attracting and retaining key personnel.
As described more fully under the Compensation Committee's Report, the Company
modified its compensation policies in fiscal 2001 to correlate compensation more
closely with individual performance and to align senior executives' interests
more closely with the interests of the Company's shareholders. As a result,
senior executives received no increases in cash compensation for fiscal 2002,
but the Company increased the number of options awarded to senior executives as
part of its annual program and awarded a special grant of stock options to key
employees with accelerated vesting based on the achievement of price targets for
the Company's Common Stock, subject to shareholder approval of this amendment.
The following table reflects certain information with respect to options to
acquire Central Parking Common Stock granted under the Key Personnel Plan since
September 30, 2001:
8
OPTION GRANTS SINCE LAST FISCAL YEAR
NUMBER OF
SECURITIES UNDERLYING
OPTIONS/SARS
GRANTED
---------------------- EXERCISE GRANT EXPIRATION
NAME AND POSITION ANNUAL(1) SPECIAL(2) PRICE(3) DATE DATE
----------------- --------- ---------- -------- -------- ----------
Monroe J. Carell, Jr......................... 100,000 -- 13.99 10/1/01 10/1/11
Chairman
William J. Vareschi, Jr...................... 200,000 750,000 13.99 10/1/01 10/1/11
Vice Chairman and Chief Executive Officer
James H. Bond................................ 25,000 100,000 13.99 10/1/01 10/1/11
President -- International Operations
Emanuel J. Eads.............................. 25,000 100,000 13.99 10/1/01 10/1/11
President -- Business Development
Gregory A. Susick............................ 25,000 75,000 13.99 10/1/01 10/1/11
Senior Vice President
Jeff L. Wolfe................................ 15,000 50,000 13.99 10/1/01 10/1/11
Senior Vice President
Executive Officers as a group (13 persons)... 495,000 1,275,000 13.99 10/1/01 10/1/11
All employees (except executive officers) as
a group (267 persons)...................... 401,450 725,000 18.50 12/17/01 12/17/11
---------------
(1) Options in this column vest ratably over a four-year period from the date of
grant.
(2) Options in this column are subject to accelerated vesting based on the
achievement of price targets for the Company's Common Stock within specified
time frames.
(3) The exercise price is the closing sale price of the Company's Common Stock
on the trading day next preceding the date of grant.
The Key Personnel Plan is administered by the Board of Directors. Subject
to certain limitations, the Board of Directors has the authority to determine
the recipients of stock options and the terms of options granted under the plan.
In making such determinations, the Board of Directors may take into account the
nature of the services rendered or to be rendered by option recipients, and
their past, present or potential contributions to the Company. Options granted
under the Key Personnel Plan generally vest ratably over a three or four-year
period after the date of grant and expire on the tenth anniversary of the date
of grant. The vesting of certain options may be accelerated if the Company
achieves targeted earnings per share in a given year. In addition, options
granted under the special stock option program described above are subject to
accelerated vesting based on the achievement of price targets for the Company's
common stock within specified time frames. The maximum term of any option
granted pursuant to the Key Personnel Plan is ten years except that incentive
options granted to persons who beneficially own ten percent or more of the
Company's outstanding Common Stock will not have terms in excess of five years.
Shares subject to options granted under the Key Personnel Plan which expire,
terminate, or are cancelled without having been exercised in full become
available again for option grants.
The Key Personnel Plan provides that the exercise price of an option must
not be less than the fair market value of the Common Stock on the trading day
next preceding the date of grant. In the case of incentive options granted to
persons who beneficially own ten percent (10%) or more of the Company's
outstanding Common Stock, the exercise price must not be less than 110% of such
fair market value. The exercise price of substitute stock options will be
determined based on the exchange ratio of the underlying transaction. Options
are nontransferable, other than by will, the laws of descent and distribution or
pursuant to certain domestic relations orders. Payment for shares of Common
Stock to be issued upon exercise of an option may be made either in cash,
unrestricted shares of Common Stock or any combination thereof, at the
discretion of the holder. In the event an option holder is terminated as an
employee by reason of disability or death, the holder or his or her
representative may exercise the vested portion of the option for a period of 12
months following
9
such termination unless the Board of Directors elects, in it sole discretion, to
extend the exercise period. In the event the option holder is terminated as an
employee for any reason other than disability, death or "cause" (as defined in
the plan), the holder may exercise the vested portion of the option for a period
of three months following such termination unless the Board of Directors elects,
in its sole discretion, to extend the exercise period. If the employment of an
option holder is terminated for "cause", the unexercised options expire
immediately. In the case of a deceased employee, the incentive stock option may
be exercised by the deceased optionee's legal representative to the extent the
deceased optionee would have been entitled to do so at the time of death. The
Key Personnel Plan permits the legal representative of any deceased employee to
exercise an option for up to one year following the death of the optionee.
Neither the grant nor the exercise of an incentive stock option will result
in taxable income to the optionee. The tax treatment on the sale of Common Stock
acquired upon exercise of an incentive stock option will depend on whether the
holding period requirement is satisfied. The holding period is met if the
disposition by the optionee occurs (i) at least two years after the date the
option is granted or (ii) at least one year after the date the option is
exercised, whichever is later. If the holding period is satisfied, the excess of
the amount realized upon sale of the Common Stock over the price paid for these
shares will be treated as long-term capital gain. If the optionee disposes of
the Common Stock before the holding period is met (a "disqualifying
disposition"), the excess of the fair market value of the shares on the date of
exercise or, if less, the fair market value on the date of disposition, over the
exercise price will be taxable as ordinary income to the optionee at the time of
disposition, and the Company will be entitled to a corresponding deduction. The
balance of the gain, if any, will be a capital gain to the optionee. Any capital
gain realized by the optionee will be a long-term capital gain if the optionee's
holding period for the Common Stock at the time of disposition is more than one
year, otherwise it will be short-term. Although the exercise of an incentive
stock option will not result in taxable income to the optionee, the excess of
the fair market value of the shares on the date of exercise over the exercise
price will be included in the optionee's "alternative minimum taxable income"
under Section 56 of the Internal Revenue Code of 1986, as amended (the "Code").
This inclusion might subject the optionee to, or increase his liability for, the
alternative minimum tax under Section 55 of the Code.
No federal income tax consequences occur to either the Company or the
optionee upon the Company's grant or issuance of a nonqualified option under the
Key Personnel Plan so long as the option does not have a readily ascertainable
fair market value on the date of the grant. Generally, an option has to be
traded on an established market or have a value that can otherwise be determined
with reasonable accuracy to have a readily ascertainable fair market value. Upon
an optionee's exercise of a nonqualified option not taxed at grant, the optionee
will recognize ordinary income in an amount equal to the difference between the
fair market value of the stock purchased pursuant to the exercise of the option
and the exercise price of the option. However, if the stock purchased upon
exercise of the option is not transferable or is subject to a substantial risk
of forfeiture, then the optionee will not recognize income until the stock
becomes transferable or is no longer subject to such risk of forfeiture (unless
the optionee makes an election under Code Section 83(b) to recognize the income
in the year of exercise, which election must be made within 30 days of the
option exercise). The Company will be entitled to a deduction in an amount equal
to the ordinary income recognized by the optionee in the year in which such
income is recognized by the optionee. Upon a subsequent disposition of the
stock, the optionee will recognize capital gain to the extent the sales proceeds
exceed the optionee's cost of the stock plus the previously recognized ordinary
income.
A copy of the amendment to the Key Personnel Plan is attached hereto as
Exhibit A.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST ON THIS MATTER IS
REQUIRED TO APPROVE THE AMENDMENT OF THE KEY PERSONNEL PLAN. THE BOARD OF
DIRECTORS HAS APPROVED THE AMENDMENT AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE PROPOSED AMENDMENT.
10
EXECUTIVE OFFICERS
YEAR OF POSITIONS WITH THE COMPANY AND BUSINESS
NAME & AGE EMPLOYMENT EXPERIENCE FOR THE LAST FIVE YEARS
---------- ---------- -----------------------------------------------------
Monroe J. Carell, Jr., 70.......... 1967 Chairman of the Board since 1979. Mr. Carell also
served as Chief Executive Officer until April 2001.
William J. Vareschi, Jr., 59....... 2001 Vice Chairman and Chief Executive Officer of the
Company since April 2001. Mr. Vareschi served as
President and Chief Executive Officer of GE Engine
Services, a division of General Electric Company,
from January 1996 until his retirement in July
2000. Prior to January 1996, Mr. Vareschi served in
a number of positions of increasing responsibility
with General Electric, including Chief Financial
Officer of GE's Aircraft Engine business.
James H. Bond, 59.................. 1971 President - International Operations since October
2001. Mr. Bond has been employed by the Company
since 1971 in a variety of positions of increasing
responsibility and served as President and Chief
Operating Officer until October 2001.
Emanuel J. Eads, 49................ 1974 President - Business Development since October 2001.
Mr. Eads has responsibility for the Company's
privatization initiative, including "on-street"
parking, national parks and airports, brand
development, national accounts and new
technologies. Mr. Eads previously served the
Company in a variety of positions of increasing
responsibility including Executive Vice President
and Senior Vice President.
Hiram A. Cox, 45................... 2001 Senior Vice President and Chief Financial Officer
since June 2001. Mr. Cox served as Senior Vice
President and Controller of Northwest Airlines
Corporation from May 2000 to June 2001. From July
1998 to January 2000, Mr. Cox was Senior Vice
President and Chief Financial Officer of Yellow
Freight System, Inc., a transportation services
company, and from January 2001 to May 2001, Senior
Vice President and Chief Financial Officer of
Yellow Corporation (parent of Yellow Freight). From
1981 to 1998, Mr. Cox held positions of increasing
responsibility at Delta Airlines including Vice
President and Corporate Controller and Managing
Director - Delta Shuttle.
Daniel H. Baldwin, 51.............. 1999 Senior Vice President since March 1999. Mr. Baldwin
is responsible for the Company's operations in
portions of the Southeast, Ohio and Texas. He
served in various positions with Allright
Corporation prior to the merger of Central Parking
and Allright in March 1999, including Senior Vice
President, Director, and regional and general
manager. Mr. Baldwin joined Allright in 1972.
11
YEAR OF POSITIONS WITH THE COMPANY AND BUSINESS
NAME & AGE EMPLOYMENT EXPERIENCE FOR THE LAST FIVE YEARS
---------- ---------- -----------------------------------------------------
Robert Cizek, 37................... 1990 Senior Vice President since May 2000. Mr. Cizek is
responsible for leading the global marketing
activities for the Company's airport and "on-
street" segments. He served as a regional manager
for the Company from March 1995 until his
appointment as Senior Vice President. Prior to
March 1995, Mr. Cizek served as a general manager
and operations manager for the Company.
Bijan Eghtedari, 41................ 1988 Senior Vice President since October 2001. Mr.
Eghtedari is responsible for the Company's
operations in Washington, D.C., Virginia, Maryland,
Georgia, South Carolina and North Carolina. Mr.
Eghtedari rejoined the Company in January 2001.
From 1988 to May 2000, he served in a variety of
positions with the Company, including Senior Vice
President.
Alan J. Kahn, 41................... 1982 Senior Vice President since April 1996. Mr. Kahn is
responsible for the Company's operations in the
Midwest, Upstate New York, and Canada (except
British Columbia). He previously served in various
other positions with the Company, including general
and regional manager.
Benjamin F. Parrish, Jr., 45....... 1998 Senior Vice President and General Counsel since
August 1998. From 1993 to 1998, Mr. Parrish served
as Senior Vice President and General Counsel of
Smith & Nephew, Inc., a medical products company.
William R. Porter, 47.............. 1996 Senior Vice President - Acquisitions since November
1996. From 1991 to 1996. Mr. Porter served as
Executive Vice President - Marketing, Ace Parking,
a parking management company.
Gregory A. Susick, 42.............. 1989 Senior Vice President since 1996. Mr. Susick has
responsibility for the Company's operations in the
Northeast, including New York, Boston and
Philadelphia. He previously served in various
positions with the Company, including general and
regional manager.
Jeff L. Wolfe, 42.................. 1987 Senior Vice President since May 1994. Mr. Wolfe is
responsible for the Company's operations in the
Western portion of the United States and British
Columbia. He previously served in various positions
with the Company, including general and regional
manager.
12
OWNERSHIP BY MANAGEMENT AND CERTAIN SHAREHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of the Common Stock as of December 21, 2001, of (i) each person known
to the Company to beneficially own 5% or more of the Common Stock, (ii) each
director, nominee and Named Executive Officer, and (iii) all directors, nominees
and executive officers of the Company as a group. On that date, 35,758,091
shares were outstanding. Unless otherwise indicated, the persons listed below
have sole voting and investment power over the shares of the Common Stock
indicated.
AMOUNT AND
NATURE OF
BENEFICIAL
BENEFICIAL OWNERSHIP(1) PERCENT(1)
---------- ------------ ----------
Monroe J. Carell, Jr........................................ 8,047,150(2) 22.48%
2401 21st Avenue South, Suite 200, Nashville, Tennessee
37212
The Carell Children's Trust (3)............................. 7,099,517 19.85%
800 Nashville City Center, 511 Union, Nashville, Tennessee
37219
Apollo Real Estate Investment Fund II, L.P.................. 3,346,627 9.36%
c/o Apollo Real Estate Advisors II, L.P.
Two Manhattanville Road, Purchase New York 10577
James H. Bond............................................... 360,027(4) *
William S. Benjamin......................................... 16,346(5) *
Cecil Conlee................................................ 42,285(6) *
Edward G. Nelson............................................ 45,020(7) *
William C. O'Neil, Jr....................................... 46,088(8) *
Emanuel J. Eads............................................. 57,977(9) *
Gregory A. Susick........................................... 47,049(10) *
Lewis Katz.................................................. 688,720(11) 1.92%
Richard H. Sinkfield........................................ 12,168(12) *
Julia Carell Stadler........................................ 1,995,623(13) 5.58%
William J. Vareschi, Jr..................................... --(14) *
Jeff L. Wolfe............................................... 43,747(15) *
Directors and executive officers as a group (20 persons).... 11,579,898(16) 31.65%
---------------
* Indicates less than 1%.
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares that such person or group has the
right to acquire within 60 days after the date set forth above, or with
respect to which such person otherwise has or shares voting or investment
power. For purposes of computing beneficial ownership and the percentages
of outstanding shares held by each person or group of persons on a given
date, shares which such person or group has the right to acquire within 60
days after such date are shares for which such person has beneficial
ownership and are deemed to be outstanding for purposes of computing the
percentage for such person, but are not deemed to be outstanding for the
purpose of computing the percentage of any other person.
(2) Includes options to purchase 43,443 shares of Common Stock granted pursuant
to the Key Personnel Plan, 137,799 shares held by the Monroe Carell, Jr.
Foundation and 775,607 shares held by the Monroe Carell, Jr. 2000 Grantor
Retained Annuity Trust. Excludes 7,094,517 shares held by The Carell
Children's Trust. See footnote 3.
(3) The Carell Children's Trust is a trust created by Mr. Carell in 1987 for
the benefit of his children. The trustee is Equitable Trust Company.
(4) Includes 267,750 shares of restricted stock granted under the Company's
1995 Restricted Stock Plan in connection with Mr. Bond's Performance
Agreement, 2,250 shares held by his spouse, 2,275 shares held by the Emily
Bond Trust of which Mrs. Bond is trustee, 333 shares held by his daughter
and options to purchase 62,667 shares of Common Stock granted pursuant to
the Company's Key Personnel Plan. This
13
amount excludes 700 shares held by the Andrew Bond Trust with respect to
which Mr. Bond disclaims beneficial ownership.
(5) Includes 160 shares of restricted stock and options to purchase 15,750
shares of Common Stock. The amount indicated excludes shares held by Apollo
Real Estate Investment Fund II, L.P. ("Apollo"). Mr. Benjamin is a limited
partner in Apollo with an ownership interest of approximately 1.1%. In
addition, Mr. Benjamin is a partner in Apollo Real Estate Advisors II,
L.P., which is a general partner of Apollo. Mr. Benjamin disclaims
beneficial ownership of shares of Common Stock held by Apollo or its
affiliates.
(6) Includes 2,055 shares of restricted stock and options to purchase 33,750
shares of Common Stock.
(7) Includes 4,500 shares held by Mr. Nelson's spouse, of which Mr. Nelson
disclaims beneficial ownership, 269 shares of restricted stock and options
to purchase 33,750 shares of Common Stock.
(8) Includes 287 shares of restricted stock and options to purchase 33,750
shares of Common Stock.
(9) Includes options to purchase 49,084 shares of Common Stock.
(10) Includes options to purchase 44,584 shares of Common Stock.
(11) Includes 668,292 shares of Common Stock owned by a partnership of which Mr.
Katz is a general partner, options to purchase 20,250 shares of the
Company's Common Stock and 178 shares of restricted stock.
(12) Includes options to purchase 11,250 shares of Common Stock and 287 shares
of Restricted Stock.
(13) Includes options to purchase 20,250 shares of Common Stock, 287 shares of
Restricted Stock, 81,630 shares held by the 1996 Carell Grandchildren's
Trusts with respect to which Mrs. Stadler is a co-trustee, 20,000 shares
held by the Julia Carell Stadler Foundation with respect to which Mrs.
Stadler serves on the Board of Trustees and 1,873,448 shares held by
various trusts of which Mrs. Stadler serves on the committee which has
investment power with respect to Central Parking Common Stock held by such
trusts. This amount excludes 7,094,517 shares held by The Carell Children's
Trust with respect to which Mrs. Stadler is a beneficiary. See footnote 3.
This amount also excludes 6,964 shares held by her spouse and trusts for
the benefit of Mrs. Stadler's children of which Mrs. Stadler disclaims
beneficial ownership.
(14) Excludes 1,350,000 unvested options to purchase Central Parking Common
Stock. Also excludes deferred stock units held by Mr. Vareschi in the
Company's Deferred Stock Unit Plan under which Mr. Vareschi is investing
50% of his cash compensation in deferred stock units.
(15) Includes options to purchase 35,584 shares of the Company's Common Stock.
(16) Includes options to purchase 559,316 shares of the Company's Common Stock
and 271,273 shares of Restricted Stock.
14
EXECUTIVE COMPENSATION
The following table summarizes information concerning cash and non-cash
compensation paid to or accrued for the benefit of the persons who served as
Central Parking's Chief Executive Officer and the persons who were the four
other most highly compensated executive officers of Central Parking during
fiscal 2001 (the "Named Executive Officers") for all services rendered in all
capacities to Central Parking for the fiscal years indicated.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION} --------------------------
------------------------------------------- SECURITIES
OTHER RESTRICTED UNDERLYING ALL OTHER
NAME AND ANNUAL COMPEN- STOCK OPTIONS/ COMPEN-
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(1) SATION($)(2) AWARDS(S)($) SARS(#)(3) SATION($)(4)
------------------ ---- ------------ ----------- -------------- ------------ ----------- ------------
Monroe J. Carell, Jr. ... 2001 525,000 163,562 -- -- 49,147 13,982(6)
Chairman(5) 2000 500,000 204,714 -- -- 8,000 5,591(7)
1999 500,000 170,006 -- -- 10,000 6,138(8)
William J. Vareschi,
Jr..................... 2001 294,575 199,452 -- -- 400,000 41,086(10)
Vice Chairman and
Chief Executive
Officer(9)
James H. Bond............ 2001 450,000 140,967 -- -- 50,000 8,742
President - International 2000 425,000 290,624 -- -- 8,000 7,725
Operations 1999 425,000 240,850 -- -- 8,000 8,342
Emanuel J. Eads.......... 2001 350,000 105,843 -- -- 43,750 8,741
President - Business 2000 325,000 218,702 -- -- 6,000 7,723
Development 1999 325,000 181,311 -- -- 6,000 8,342
Gregory A. Susick........ 2001 455,000 352,879 -- -- 43,750 7,999
Senior Vice President 2000 429,300 518,559 11,848 -- 6,000 45,786(11)
1999 215,000 113,373 -- 6,000 77,110(12)
Jeff L. Wolfe............ 2001 375,000 73,091 -- -- 43,750 8,894
Senior Vice President 2000 328,426 245,084 -- -- 6,000 7,716
1999 215,000 103,513 -- -- 6,000 120,336(13)
---------------
(1) Includes amounts deferred under the Company's Profit Sharing and 401(k)
Savings Plan and the Deferred Stock Unit Plan.
(2) These amounts represent the dollar value of premium shares awarded under
the Company's Deferred Stock Unit Plan.
(3) These amounts represent the number of shares subject to options granted
under the Company's 1995 Incentive and Nonqualified Stock Option Plan for
Key Personnel as of September 30, 2001. No stock appreciation rights were
granted under this plan.
(4) These amounts represent contributions by the Company to the Company's
Profit Sharing and 401(k) Savings Plan, except as otherwise noted.
(5) Mr. Carell also served as Chief Executive Officer until April 2001.
(6) Includes $4,552 in insurance premiums.
(7) Includes $4,664 in insurance premiums.
(8) Includes $4,187 in insurance premiums.
(9) Mr. Vareschi was named Vice Chairman and Chief Executive Officer in April
2001. Mr. Vareschi's employment agreement provides for an annual base
salary of $600,000 and an annual performance-based bonus with a target
amount equal to 100% of his base salary; provided that for fiscal years
2001 and 2002, the bonus shall not be less than $400,000 per year
(pro-rated for fiscal 2001).
(10) This amount represents reimbursement for relocation costs.
(11) Includes $38,070 in relocation costs.
(12) Includes $68,786 in relocation costs.
(13) Includes $112,009 in relocation costs.
15
OPTION GRANTS
The following table reflects certain information with respect to options to
acquire shares of Central Parking's Common Stock granted under Central Parking's
Key Personnel Plan to the Named Executive Officers during the fiscal year ended
September 30, 2001. No stock appreciation rights were granted.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO BASE OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- -------------- ------------ -------- ---------- --------- ----------
Monroe J. Carell,
Jr.................. 49,147 3.86 19.81 10/01/10 612,370 1,551,867
William J. Vareschi,
Jr.................. 400,000 31.41 20.00 03/01/11 5,031,157 12,749,940
James H. Bond......... 50,000 3.93 19.81 10/01/10 622,999 1,578,801
Emanuel J. Eads....... 43,750 3.44 19.81 10/01/10 545,124 1,381,451
Gregory A. Susick..... 43,750 2.44 19.81 10/01/10 545,124 1,381,451
Jeff L. Wolfe......... 43,750 3.44 19.81 10/01/10 545,124 1,381,451
---------------
(1) The dollar amounts under these columns result from calculations assuming 5%
and 10% growth rates as set by the Securities and Exchange Commission and
are not intended to forecast future appreciation of Central Parking Common
Stock.
OPTION EXERCISES AND VALUES
The table below provides information with respect to exercises of options
by the Named Executive Officers during the fiscal year ended September 30, 2001
under Central Parking's Key Personnel Plan and the year-end value of unexercised
options. Central Parking has granted no stock appreciation rights.
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
AND PERIOD-END OPTION/SAR VALUES
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL YEAR-
SHARES FISCAL YEAR-END(#) END($)(1)
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- -------------- ----------- ---------------------- --------------------
Monroe J. Carell, Jr.......... -- -- 22,560/60,147 0/0
William J. Vareschi, Jr....... -- -- 0/400,000 0/0
James H. Bond................. -- -- 39,750/62,250 107,820/0
Emanuel J. Eads............... -- -- 29,812/52,938 80,865/0
Gregory A. Susick............. -- -- 25,312/52,938 53,910/0
Jeff L. Wolfe................. -- -- 16,312/52,938 0/0
---------------
(1) This amount represents the aggregate number of options multiplied by the
difference between $13.99, the fair market value of Central Parking Common
Stock at September 30, 2001 and the exercise price for each option.
EMPLOYMENT AGREEMENTS
Central Parking has entered into employment agreements with Messrs. Carell,
Vareschi, Bond, Eads, Susick and Wolfe. These employment agreements provide for
base salary and annual performance-based bonus payments (see Summary
Compensation Table for base salaries and amounts of bonus payments). Each
employee can draw up to fifty percent (50%) of his budgeted bonus during the
fiscal year subject to repayment
16
if the amount drawn exceeds the actual bonus payout. The employment agreements
generally are for a term of one year and may be terminated by either party upon
30 days' written notice except that termination for "Cause" shall be effective
immediately. The agreements automatically renew for additional one-year periods
unless notice is provided at least thirty days prior to year-end. Except as
otherwise noted below, executive officers are entitled to severance payments
equal to 125% of base salary in the event such officers are terminated by the
Company without "Cause" or in the event the executive resigns for "Good Reason."
"Cause" is defined as (i) the commission by the executive of an act involving
theft, embezzlement, fraud or intentional mishandling of Company funds; (ii)
conviction of a criminal offense which adversely affects the executive's
job-related responsibilities; (iii) a violation by the executive of the
non-competition and non-solicitation covenants in the agreement; or (iv) the
executive's deliberate and intentional continuing refusal to substantially
perform his duties and obligations, which continues beyond ten days after a
written demand for substantial performance. "Good Reason" is defined as a
reduction by the Company in excess of 15% of the executive's base salary or
bonus potential unless the reduction in the amount of bonus potential is part of
a program in which the bonus potential of at least 90% of the Company's senior
executives is reduced. Except as otherwise noted below, executives are subject
to a non-competition covenant for 12 months following termination of employment
and non-solicitation covenants for 24 months following termination.
Mr. Vareschi's employment agreement provides for a grant of 400,000
non-qualified options at an exercise price of $20 per share, which vest ratably
over a four-year period. The agreement also provides for the grant of 200,000
deferred stock units ("DSU's") on the second anniversary of his commencement
date. The DSU's vest five years following the date of grant provided, however,
that the DSU's are subject to performance-accelerated vesting as follows: (i)
10% of the DSU's vest the first time the market value of the Company's Common
Stock increases by at least 20% over $20 per share; (ii) an additional 40% vests
the first time the market value of the Company's Common Stock increases by at
least 40% over $20 per share; and (iii) an additional 50% of the DSU's vest the
first time the market value of the Company's Common Stock increases by at least
70% over $20 per share. Mr. Vareschi's employment agreement provides for
severance payments equal to two years of base salary in the event Mr. Vareschi's
employment is terminated by the Company without "Cause" or by Mr. Vareschi for
"Good Reason." In the event Mr. Vareschi's employment is terminated within two
years of a change in control by the Company without "Cause" or by Mr. Vareschi
for "Good Reason," Mr. Vareschi is entitled to receive two years of base salary
and two years of health and welfare benefits. With regards to DSU's and stock
options, any DSU's or stock options not assumed or substituted by the surviving
corporation in a transaction resulting in a change in control, shall become
immediately vested and, in the case of DSU's, shall be paid out immediately in
stock, and in the case of options, shall be immediately exercisable. Upon
termination of employment, Mr. Vareschi is prohibited from competing with
Central Parking for a period of two years. In addition, for a two-year period
following termination of employment, he is prohibited from entering into any
leases, management agreements or similar agreements relating to any of the
parking facilities managed or operated by the Company on the date of his
termination.
Mr. Carell and Central Parking are parties to a deferred compensation
agreement that entitles Mr. Carell to annual payments of $500,000 for a period
of ten years following his termination, for any reason other than death, in
exchange for a covenant not to compete. Thereafter, Mr. Carell is entitled to
annual payments of $300,000 until his death and, in the event his wife survives
him, she is entitled to annual payments of $300,000 until her death.
Mr. Bond's employment agreement provides that in the event Mr. Bond's
employment terminates due to either a "Without Cause Termination" or a
"Constructive Discharge" (as such terms are defined in the agreement), Mr. Bond
is entitled to receive severance payments equal to two years of base salary and
bonus. "Termination for Cause" is defined as (i) executive's willful dishonesty,
fraud or misconduct with respect to the business or affairs of the Company which
is directly harmful to the Company; (ii) executive's conviction of a felony or
other crime involving moral turpitude; or (iii) a violation by executive of the
non-competition and non-solicitation covenants in the agreement. "Constructive
Discharge" is defined as termination of executive's employment due to a failing
of the Company to fulfill its obligations under the agreement in any respect,
including (i) any reduction in executive's base salary other than reductions not
to exceed 15%
17
applicable to all executive officers of the Company or (ii) reduction in the
title and/or duties of the executive. Mr. Bond is subject to non-competition and
non-solicitation covenants ranging from 24 to 36 months, depending on the reason
his employment is terminated. In the event there is a change in control and
within the eighteen-month period following the change in control, Mr. Bond's
employment is terminated for any reason, Mr. Bond is entitled to receive a lump
sum payment equal to two times his base salary plus two times the bonus received
in the immediately preceding fiscal year. Mr. Bond and Central Parking also are
parties to a Performance Unit Agreement pursuant to which Mr. Bond was issued
267,750 shares of Common Stock under Central Parking's 1995 Restricted Stock
Plan, together with the right to receive until his normal retirement or, if
earlier, the date of termination of his employment, additional shares of
restricted Common Stock in an amount determined by a formula based upon Central
Parking's performance over such period. The shares were granted in lieu of the
Company's obligations to Mr. Bond under a previous agreement. The value of the
restricted shares was $3,745,823 on September 30, 2001.
DIRECTOR COMPENSATION
Non-employee directors of Central Parking receive a fee of $6,000 and
$1,000 worth of restricted stock for each regular board meeting attended and a
fee of $1,000 for all other special meetings attended. Under the 1995
Nonqualified Stock Option Plan for Directors, an option to acquire 11,250 shares
is granted to each director upon his initial election to the Board and an option
to purchase 5,000 shares of Common Stock is awarded to each director serving on
the Board on the last day of Central Parking's fiscal year who has served in
such capacity for at least six months during the fiscal year. Directors who are
employees of Central Parking or its affiliates do not receive additional
compensation for services as a director of Central Parking. All directors are
reimbursed for actual expenses incurred in connection with attending meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
During Central Parking's fiscal year ended September 30, 2001 ("fiscal
2001"), the Board held four meetings. The Board has the following committees:
Audit, Compensation, Nominating and Disinterested Shareholders. During fiscal
2001, the Audit Committee held five meetings and the Compensation Committee held
one meeting. The Nominating Committee and the Disinterested Shareholders
Committee did not meet. During fiscal 2001, all of the current directors of
Central Parking attended at least 75% of the aggregate number of meetings of the
Board and the respective committees of the Board on which they served, except
Mr. Katz.
The Compensation Committee, which is comprised of Messrs. Benjamin, Conlee
and Katz and Mrs. Stadler, is responsible for reviewing and recommending the
appropriate compensation and benefits of officers of Central Parking,
considering and making grants and awards under and administering Central
Parking's 1995 Incentive and Nonqualified Stock Option Plan for Key Personnel
and overseeing Central Parking's various other compensation and benefit plans.
The Audit Committee, which is comprised of Messrs. Nelson, O'Neil and
Sinkfield, is responsible for overseeing the auditing procedures and financial
reporting of Central Parking, reviewing the general scope of Central Parking's
annual audit and the fees charged by Central Parking's independent certified
public accountants, receiving, reviewing and accepting the reports of Central
Parking's independent certified public accountants, and overseeing Central
Parking's systems of internal accounting and management controls.
The Nominating Committee, which is responsible for identifying and
recommending to the Board nominees for director, is comprised of Messrs. Carell,
Conlee and Benjamin. The Nominating Committee will consider nominations made by
shareholders if they are submitted in writing to the Corporate Secretary and are
in accordance with the Company's nominating procedures.
18
The Disinterested Stockholders Committee, which is responsible for
reviewing related party transactions, is comprised of Messrs. O'Neil and
Sinkfield.
COMPENSATION PURSUANT TO PLANS
1995 Incentive and Nonqualified Stock Option Plan for Key Personnel
The Company's 1995 Incentive and Nonqualified Stock Option Plan for Key
Personnel is described under Proposal II.
1995 Restricted Stock Plan
In August 1995, Central Parking's Board of Directors and shareholders
adopted the Restricted Stock Plan under which restricted shares of Common Stock
are available for grant to directors, officers and other key employees and
consultants of Central Parking and its subsidiaries. The plan is administered by
the Board of Directors or a committee designated by the Board, which has the
authority to select participants, make stock awards, determine the size and
terms of stock awards (subject to the terms of the plan) and to make other
determinations with respect to the plan. A participant vests in shares awarded
under the plan in accordance with the vesting schedule determined by the Board
(or the committee designated by the Board to administer the plan), except that a
participant vests fully in any shares awarded under the plan in the event of a
change of control, as defined in the plan. As of September 30, 2001, one
executive officer (who is also a board member), seven non-employee directors and
three key employees held a total of 284,590 shares under the Restricted Stock
Plan. The Restricted Stock Plan allows for the issuance of up to 3,817,500
shares of Common Stock, in the aggregate, when taken together with shares
available for grant under the Key Personnel Plan. Each non-employee director
receives a restricted stock award of $1,000 worth of restricted stock for
attendance at each Board Meeting.
1995 Nonqualified Stock Option Plan for Directors
In August 1995, Central Parking's Board of Directors and shareholders
adopted the 1995 Nonqualified Stock Option Plan for Directors under which
nonqualified options to purchase an aggregate of 475,000 shares of Common Stock
are authorized for grant to non-employee directors of Central Parking. Under the
plan, options to acquire 11,250 shares of Common Stock are granted to each
non-employee director upon the date of his or her initial election to the Board
of Directors. Additionally, each non-employee director serving on the Board on
the last day of Central Parking's fiscal year who has served in such capacity
for at least six months during the fiscal year automatically receives options to
acquire 5,000 shares of Common Stock. Vested options generally are exercisable
for a period of three months after a holder ceases to serve as a director of the
Company. In the event of a merger or consolidation in which the Company is not
the surviving corporation and the options are not assumed or substituted by the
surviving corporation, all options will become exercisable immediately prior to
such merger or consolidation. As of September 30, 2001, directors held options
to purchase an aggregate of 182,000 shares of Common Stock.
1996 Employee Stock Purchase Plan
The Company maintains an employee stock purchase plan that qualifies under
Section 423 of the Internal Revenue Code and permits substantially all of
Central Parking's domestic employees (including executive officers) to purchase
shares of the Company's Common Stock. The plan authorizes the issuance of up to
450,000 shares of Common Stock. As of September 30, 2001, 319,766 shares had
been issued under this plan. Participating employees may purchase Common Stock
at a purchase price equal to 85% of the lower of the fair market value of the
Common Stock at the beginning or the end of the participation period.
Participation periods are annual and begin on April 1 of each year. Employees
may designate up to 10% of their annual salary (up to a maximum of $25,000) for
the purchase of Common Stock under the plan. A total of 71,227 shares were
issued at a purchase price of $15.47 per share to 1,154 employees in the most
recent plan year, which ended on March 31, 2001.
19
Profit Sharing and 401(k) Savings Plan
Under the Central Parking System Profit Sharing and 401(k) Savings Plan,
the Company matches 100% of each participant's pre-tax contributions up to 3% of
compensation and matches 50% of the next 2% of compensation. All matching
contributions are 100% vested when made. Substantially all of Central Parking's
full-time domestic employees (including all executive officers) are eligible to
participate in the plan. The plan also allows profit sharing contributions to be
made by the Company. The Company determines the amount of profit sharing
contributions, if any, it will contribute to the plan each year. Profit sharing
contributions are allocated among participants based on years of service and
total compensation (up to $170,000). Profit sharing contributions generally vest
after five-years of service. Company contributions to the plan totaled $2.2
million for fiscal 2001, comprised entirely of company matching contributions.
No profit sharing contributions were made for fiscal 2001.
Deferred Stock Unit Plan
The Deferred Stock Unit Plan provides for the issuance of up to 375,000
shares of Common Stock. Under the plan, key employees designated to participate
in the plan can defer from 5% to 50% of total cash compensation. Amounts
deferred under the plan are converted into stock units. The Company matches
participant's deferrals as follows: the first 20% of total compensation deferred
is matched at a rate of 25% and deferrals in excess of 20% of total compensation
are matched at a rate of 50%. Company matches are in the form of additional
stock units, which vest on a pro rata basis over a four-year period. For
deferrals during the fiscal year, stock units are credited monthly based on the
closing price of the Company's common stock on the last trading day in the
month. For deferrals from the annual bonus paid following the end of the fiscal
year, stock units are credited based on the average of the twelve monthly
closing prices used to credit stock units during the fiscal year. A
participant's stock unit account is paid to the participant or his designee upon
the participant's retirement, death, termination of employment, commencement
date selected by the participant at the time the participant elects to make the
deferral, or a change in control (as defined in the plan) of the Company.
Thirteen executive officers are participants in the plan.
20
COMPENSATION COMMITTEE REPORT
The following Compensation Committee Report is not deemed to be part of a
document filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and is not to be deemed
incorporated by reference in any documents filed under the Securities Act or
Exchange Act, without the express consent of the persons named below.
The Compensation Committee (the "Committee") of the Board reviews and
approves compensation levels for the Company's management personnel, including
the Named Executive Officers. The Committee, which was established in August
1995, held one meeting during the fiscal year ended September 30, 2001.
COMPENSATION PHILOSOPHY AND POLICIES FOR EXECUTIVE OFFICERS
The Company modified its compensation policies in fiscal 2001 to correlate
compensation more closely with individual performance and to align senior
executives' interests more closely with the interests of its shareholders. The
Company's compensation program for senior executives consists of base salary, a
performance-based bonus and stock options.
The Company's compensation philosophy is to differentiate the compensation
awarded to its executives and other employees by rewarding superior performance.
As a result, salary adjustments, bonuses and stock options are now more directly
linked to individual performance. In addition, the Company seeks to align senior
executives' interests more closely with the interests of its shareholders by
increasing the equity component of its compensation program. The equity
component consists primarily of stock options granted under the 1995 Incentive
and Nonqualified Stock Option Plan for Key Personnel.
The Company seeks to compensate its executives at or above industry levels,
in order to recruit and retain the best available executives. The Company has
determined that the cash compensation of its senior executives is competitive.
As a result, no increases in cash compensation are planned for fiscal 2002. The
Company has, however, increased the number of options awarded to senior
executives to move towards a more balanced reward system. The additional options
awarded include a special grant of options with accelerated vesting based on the
achievement of price targets for the Company's common stock within specified
time frames.
The Company introduced a new bonus program in fiscal 2001. The purpose of
the new program is to introduce more diversity into the program and to reward
successful delivery of results in each key business driver area. Each
participant is assigned a target bonus based upon responsibility level. For the
Company's executives with direct responsibility for operations, the bonus is
based on the achievement of specified targets in the following areas: revenue,
operating margin improvement, general and administrative expense management,
new/lost revenue ratio, new/lost management fee ratio and operating income. For
the Company's senior staff executives, the bonus is based on the achievement of
specified objectives within their areas of responsibility and targeted earnings
for the Company. For each measurement area, a range of results has been
established which create a possible bonus ranging from a low of zero to a high
of double the target bonus (from zero to 200% of target).
COMPENSATION OF CHIEF EXECUTIVE OFFICER
William J. Vareschi, the Company's Vice Chairman and Chief Executive
Officer, has an employment agreement with the Company that provides for a base
salary of $600,000, and a target bonus of $600,000; provided that for fiscal
years 2001 and 2002, the bonus shall be not less than $400,000 (pro-rated for
fiscal 2001).
THIS REPORT IS SUBMITTED BY WILLIAM S. BENJAMIN, CECIL CONLEE, LEWIS KATZ,
AND JULIA C. STADLER, BEING ALL OF THE MEMBERS OF THE COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD DURING THE 2001 FISCAL YEAR.
21
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Benjamin, Conlee, Katz, O'Neil, and Mrs. Stadler served as members
of the Compensation Committee of the Company's Board of Directors during fiscal
2001. Mr. Katz has certain business relationships with the Company. See "Certain
Transactions". No interlocking relationship exists between the members of the
Company's Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company.
AUDIT COMMITTEE REPORT
The primary purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities relating to the quality
and integrity of the Company's financial reports and financial reporting
processes and systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee (1) reviewed and discussed the audited
financial statements for the fiscal year ended September 30, 2001, with
management and KPMG LLP, the Company's independent auditors (2) discussed with
the auditors the matters required to be disclosed by Statement on Auditing
Standards No. 61; and (3) received and discussed with the auditors the written
disclosures and the letter from the auditors required by Independence Standards
Board Statement No. 1. Based on the foregoing reviews and meetings, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
September 30, 2001, for filing with the Securities and Exchange Commission. The
Audit Committee also recommended the appointment of KPMG as the Company's
independent auditors for fiscal 2002.
The members of the Audit Committee are independent as defined in Sections
303.01(B)(2)(a) and (3) of the New York Stock Exchange's listing standards.
AUDIT COMMITTEE:
Ed Nelson, Chairman
William O'Neil
Richard Sinkfield
CERTAIN TRANSACTIONS
The Company leases two properties from an entity 50% owned by Monroe
Carell, Jr., the Company's Chairman and Chief Executive Officer, and 50% owned
by Mr. Carell's three daughters, including Julia Carell Stadler, a director. The
leases, which were entered into in 1995, are for a term of ten years and provide
for base rent of $290,000 plus percentage rent. Total rent expense for fiscal
2001, including percentage rent, was $355,000. In addition, the Company will
receive 25% of the gain in the event of a sale of these properties during the
term of the leases. Management believes such transactions have been on terms no
less favorable to the Company than those that could have been obtained from
unaffiliated persons.
The Company purchased, in 1992, the contract rights to manage 103 parking
facilities owned, leased or managed by an unrelated parking company, for $8
million. In connection with this transaction, Mr. Carell made certain
representations and personally guaranteed certain obligations of the
Company. In 1995, the Company indemnified Mr. Carell against costs related to
his guarantee of these obligations. In May 2000, the Company entered into an
agreement under which it may acquire additional contract rights from the
unrelated parking company. The potential purchase of these rights is supported
by a letter of credit in the amount of $15 million in favor of the seller or its
assignee. This letter of credit has been provided by Mr. Carell. The Company's
indemnity obligations to Mr. Carell in connection with this transaction have
been expanded to include costs related to the letter of credit. The Company also
has agreed to replace this letter of credit under certain circumstances.
In connection with the Company's acquisition of Kinney System Holding Corp.
("Kinney") in February 1998, the Company entered into a consulting agreement
with Lewis Katz, one of the principal shareholders of Kinney and a director of
the Company since May 1998. Under this agreement, Mr. Katz is
22
entitled to receive a base consulting fee of $200,000 a year beginning in
February 1999 and continuing for a period of four years. The agreement also
provides certain incentives to Mr. Katz to seek new business opportunities for
the Company. In this regard, Mr. Katz is entitled to receive a "participating
consulting fee" equal to 10% of "adjusted operating income," as defined in the
agreement, from the operation of any new leased or managed parking facilities
that Mr. Katz secures for the Company. This participating consulting fee, which
is to be paid for a period of five years from the commencement date of the
parking facility, is to be paid only to the extent adjusted operating income
from these new locations exceeds $200,000. In fiscal 2001, Mr. Katz received
$200,000 under the consulting agreement.
A subsidiary of the Company entered into a limited partnership agreement
with Arizin Ventures, L.L.C. ("Arizin"), a company owned by Lewis Katz, in the
fiscal year ended September 30, 1999. The Company serves as the general partner
of the partnership and Arizin serves as the limited partner. Under the
partnership agreement, Mr. Katz has agreed to seek new business opportunities in
the form of leases and management contracts to operate parking facilities as
well as renewals of existing leases and contracts as requested by the Company.
The Company operates all of the partnership's parking facilities. The Company
owns 70% of the partnership and Arizin owns 30%. The partnership agreement
provides that the net profit or loss of the partnership equals the combined lot
level profit of each of the parking facilities operated by the partnership. Katz
receives an administrative fee of $50,000 per quarter as long as he remains
active in seeking new contracts or renewals for the partnership. Cash flow,
after expenses, is distributed to the partners semi-annually. Mr. Katz is not
entitled to receive the "participating consulting fee" under his consulting
agreement (described above) for any opportunities presented to the partnership.
The partnership agreement provides that the Company has the right to purchase
Katz' interest in the partnership at fair market value in certain circumstances,
including Katz' death or incapacity. Fair market value will be determined by
independent appraisal. Arizin received $391,000 from the partnership in fiscal
2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Such executive officers, directors and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. The SEC requires public companies to disclose in
their proxy statements whether persons required to make such filings missed or
made late filings. During fiscal 2001, all such filings and disclosure
requirements were met within the time allowed for all persons subject to Section
16(a).
PROPOSALS OF STOCKHOLDERS FOR 2003 ANNUAL MEETING
Shareholders intending to submit proposals for presentation at the 2003
Annual Meeting of Shareholders of the Company and inclusion in the Proxy
Statement and form of proxy for such meeting must submit the proposal to the
Company no later than September 17, 2002. Shareholders who intend to present a
proposal at the 2003 Annual Meeting of Shareholders without inclusion of such
proposal in the Company's proxy materials are required to provide notice of such
proposal to the Company no later than December 18, 2002. Shareholders should
forward such proposals to Henry J. Abbott, Secretary, Central Parking
Corporation, 2401 21st Avenue South, Suite 200, Nashville, Tennessee 37212.
Proposals must be in writing. Proposals should be sent to the Company by
certified mail, return receipt requested. The Company reserves the right to
reject, rule out of order, or take other appropriate action with respect to any
proposal that does not comply with these and other applicable requirements.
23
AUDITORS
The firm of KPMG LLP has served as the Company's independent public
accountants since September 30, 1991, and has been selected to serve in such
capacity for the fiscal year ended September 30, 2002. A representative of KPMG
LLP will attend the Annual Meeting to respond to questions from shareholders and
to make a statement if such representative so desires.
AUDITOR'S FEES
Audit Fees. The aggregate fees billed for professional services rendered by
KPMG LLP for the audit of the Company's consolidated annual financial statements
for the year ended September 30, 2001 and the limited reviews of the condensed
financial statements included in the Company's Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission during fiscal 2001 were
$485,000.
Financial Information Systems Design and Implementation Fees. KPMG LLP
performed no services and therefore billed no fees relating to operating or
supervising the operation of the Company's information systems or local area
network or for designing or implementing the Company's financial information
management systems during fiscal 2001.
All Other Fees. The aggregate fees billed for all other services rendered
to the Company by KPMG LLP in fiscal 2001, including tax related services, total
$189,550.
The audit committee of the board of directors has considered whether the
provision of non-audit services by KPMG LLP is compatible with maintaining the
auditors's independence.
24
STOCK PERFORMANCE GRAPH
The stock price performance graph depicted below is not deemed to be part
of a document filed with the SEC pursuant to the Securities Act or the Exchange
Act and is not to be deemed incorporated by reference in any documents filed
under the Securities Act or the Exchange Act without the express consent of the
Company.
The graph below compares the total cumulative return of the Company's
Common Stock with the securities of entities comprising the S&P 500 Index and
S&P Specialized Services Index. Cumulative return assumes $100 invested in the
Company or the respective index on October 10, 1995, with no dividend
reinvestment. Since there is no industry Peer Group, the Company utilized the
S&P Specialized Services Index. The graph presents information since the
Company's initial public offering date, October 10, 1995, to September 30, 2001.
S&P
CENTRAL PARKING COMMERCIAL/CONSUMER
CORPORATION S&P 500 SERVICES
--------------- ------- -------------------
9/30/96 100 100 100
9/30/97 145 140 116
9/30/98 233 153 81
9/30/99 136 196 83
9/30/00 92 222 58
9/30/01 65 163 71
25
EXHIBIT A
AMENDMENT TO THE CENTRAL PARKING CORPORATION 1995 INCENTIVE AND
NONQUALIFIED STOCK OPTION PLAN FOR KEY PERSONNEL
The Central Parking Corporation 1995 Incentive and Nonqualified Stock
Option Plan (the "Plan") is hereby amended by deleting Section 3 of the plan in
its entirety and replacing such section with the following:
3. STOCK SUBJECT TO THE PLAN. There will be reserved for issuance under
the Plan and under the Corporation's 1995 Restricted Stock Plan an aggregate of
7,317,500 shares of Common Stock, which will be authorized and unissued Common
Stock. If an Option expires or terminates for any reason without being exercised
in full, the shares subject thereto which have not been purchased will again be
available for purposes of the Plan. The number of shares as to which Options may
be granted under the Plan will be proportionately adjusted, to the nearest whole
share, in the event of any stock dividend, stock split, reorganization, merger,
consolidation, share combination or similar recapitalization involving the
Common Stock or any spin-off, spin-out or other significant distribution of
assets of stockholders for which the Corporation receives no consideration. In
the event that there is an insufficient number of authorized shares of Common
Stock available to allow exercise of the Options on the date of any grant
hereunder, such Options will not be exercisable until there are sufficient
shares of Common Stock authorized for issuance.
26
PROXY CENTRAL PARKING CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 19, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Monroe J. Carell, Jr. and William J.
Vareschi, Jr., or either of them, as proxies, with power of substitution, to
vote all shares of the undersigned at the Annual Meeting of Shareholders of
Central Parking Corporation, to be held on Tuesday, February 19, 2002, at 10:00
a.m. Central Standard Time, at the Company's headquarters located at 2401 21st
Avenue South, Third Floor, Nashville, Tennessee, and at any adjournments or
postponements thereof, in accordance with the following instructions:
(1) ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as marked to the contrary below) listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE CHECK
THE BOX TO VOTE "FOR" ALL NOMINEES AND STRIKE A LINE THROUGH
THE NOMINEE'S NAME IN THE LIST BELOW.)
Monroe J. Carell, Jr., William J. Vareschi, Jr., James H. Bond, William S.
Benjamin, Cecil Conlee, Lewis Katz, Edward G. Nelson,
William C. O'Neil, Jr., Richard H. Sinkfield and Julia Carell Stadler.
(2) TO APPROVE AN AMENDMENT TO THE COMPANY'S 1995 INCENTIVE AND NON-QUALIFIED
STOCK OPTION PLAN FOR KEY PERSONNEL TO INCREASE THE NUMBER OF SHARES
RESERVED FOR ISSUANCE UNDER THE PLAN BY 3.5 MILLION SHARES OF COMMON STOCK:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING:
[ ] FOR DISCRETION [ ] AGAINST DISCRETION [ ] ABSTAIN
(Continued on reverse side)
(Continued from other side)
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE NOMINEES IN THE ELECTION
OF DIRECTORS, FOR APPROVAL OF THE AMENDMENT TO THE 1995 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN FOR KEY PERSONNEL AND IN THE DISCRETION OF THE
PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY.
Dated: , 2002
-------------------------
--------------------------------
Dated: , 2002
-------------------------
--------------------------------
Signatures of shareholder(s)
should correspond exactly with
the names printed hereon. Joint
owners should each sign
personally. Executors,
administrators, trustees, etc.,
should give full title and
authority.