UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 240.14a-11(c) or 240.14a-12
CONSOLIDATED DELIVERY & LOGISTICS, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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|_| 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:
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(4) Date Filed:
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[GRAPHIC OMITTED}
Dear Stockholder:
On behalf of the Board of Directors, you are cordially invited to
attend the Annual Meeting of Stockholders of Consolidated Delivery & Logistics,
Inc. (the "Company") to be held at the Marlboro Inn, 334 Grove Street,
Montclair, New Jersey 07042 on Wednesday, June 16, 1999 at 10:00 a.m.
The enclosed Notice of Meeting and the accompanying Proxy Statement
describe the business to be conducted at the Meeting. Enclosed is a copy of the
Company's 1998 Annual Report and the Company's Annual Report on Form 10-K, which
contains certain information regarding the Company and its 1998 results.
It is important that your shares of Common Stock be represented and
voted at the Meeting. Accordingly, regardless of whether you plan to attend in
person, please complete, date, sign and return the enclosed proxy card in the
envelope provided, which requires no postage if mailed in the United States.
Even if you return a signed proxy card, you may still attend the Meeting and
vote your shares in person. Every stockholder's vote is important, whether you
own a few shares or many.
I look forward to seeing you at the Annual Meeting.
Sincerely,
/S/ Albert W. Van Ness, Jr.
Albert W. Van Ness, Jr.
Chairman of the Board
and Chief Executive Officer
April 30, 1999
Clifton, New Jersey
[GRAPHIC OMITTED]
CONSOLIDATED DELIVERY & LOGISTICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 16, 1999
The Annual Meeting of Stockholders (the "Meeting") of Consolidated
Delivery & Logistics, Inc. (the "Company") will be held at the Marlboro Inn, 334
Grove Street, Montclair, New Jersey 07042 on Wednesday, June 16, 1999 at 10:00
a.m., to consider and act upon the following:
1. The election of directors.
2. Ratification of amendment to the 1995 Stock Option Plan for
Independent Directors.
3. Ratification of the appointment of Arthur Andersen LLP as
the Company's independent public accountants for 1999.
4. The transaction of such other business as may properly come
before the Meeting or any adjournments or postponements thereof.
Only holders of record of the Company's Common Stock, par value $.001
per share, at the close of business on April 20, 1999 will be entitled to vote
at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark Carlesimo
Mark Carlesimo
Secretary
April 30, 1999
Clifton, New Jersey
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, MANAGEMENT URGES YOU TO
DATE, SIGN AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE THE PROXY AT ANY TIME PRIOR TO ITS EXERCISE.
GRAPHIC OMITTTED
CONSOLIDATED DELIVERY & LOGISTICS, INC.
380 Allwood Road
Clifton, New Jersey 07012
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ANNUAL MEETING OF STOCKHOLDERS
JUNE 16, 1999
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PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Consolidated Delivery & Logistics, Inc. (the "Company") for use at the Annual
Meeting of Stockholders to be held at the Marlboro Inn, 334 Grove Street,
Montclair, New Jersey 07042 on Wednesday, June 16, 1999 at 10:00 a.m., and at
any adjournments or postponements thereof (the "Meeting"). A stockholder who has
voted by proxy has the right to revoke it by giving written notice of such
revocation to the Secretary of the Company at any time before it is voted, by
submitting to the Company a duly-executed, later-dated proxy or by voting the
shares subject to such proxy by written ballot at the Meeting. The presence at
the Meeting of a stockholder who has given a proxy does not revoke such proxy
unless such stockholder files the aforementioned notice of revocation or votes
by written ballot.
The proxy statement and the enclosed form of proxy are first being
mailed to stockholders on or about April 30, 1999. All shares represented by
valid proxies pursuant to this solicitation (and not revoked before they are
exercised) will be voted as specified in the proxy. If a proxy is signed but no
specification is given, the shares will be voted "FOR" Proposals 1, 2, and 3
[(1) to elect the Board's nominees to the Board of Directors, (2) to ratify the
amendment of the 1995 Stock Option Plan for Independent Directors and, (3) to
ratify the appointment of Arthur Andersen LLP as the Company's independent
public accountants for 1999].
The entire cost of soliciting these proxies will be borne by the
Company. The solicitation of proxies may be made by directors, officers and
regular employees of the Company or any of its subsidiaries by mail, telephone,
facsimile or telegraph or in person without additional compensation payable with
respect thereto. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to forward proxy soliciting material to the
beneficial owners of stock held of record by such persons, and the Company will
reimburse them for reasonable out-of-pocket expenses incurred by them in so
doing.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At April 20, 1999 (the "Record Date"), the Company had outstanding
7,121,493 shares of common stock, par value $.001 per share ("Common Stock").
Each holder of Common Stock will have the right to one vote for each share
standing in such holder's name on the books of the Company as of the close of
business on the Record Date with respect to each of the matters considered at
the Meeting. There is no right to cumulate votes in the election of directors.
Holders of the Common Stock will not have any dissenters' rights of appraisal in
connection with any of the matters to be voted on at the Meeting.
The presence in person or by proxy of the holders of shares entitled to
cast a majority of the votes of all shares entitled to vote will constitute a
quorum for purposes of conducting business at the Meeting. Assuming that a
quorum is present, directors will be elected by a plurality vote and the
ratification of all other proposals will require the affirmative vote of a
majority of the shares present and entitled to vote with respect to such
proposal. Pursuant to Delaware corporate law, abstentions and broker non-votes
will be counted for the purpose of determining whether a quorum is present and
do not have an effect on the election of directors. On all other matters,
abstentions, but not broker non-votes, are treated as shares present and
entitled to vote, and will be counted as a "no" vote. Broker non-votes are
treated as not entitled to vote, and so reduce the absolute number, but not the
percentage of votes needed for approval of a matter.
Based upon information available to the Company, the following
stockholders beneficially owned more than 5% of the Common Stock as of April 20,
1999.
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
Thomas LoPresti 656,191(1) 9.2%
24-30 Skillman Avenue
Long Island City, New York 11101
William T. Beaury 638,708(1) 9.0%
24-30 Skillman Avenue
Long Island City, New York 11101
Albert W. Van Ness, Jr. 683,955(3) 8.9%
380 Allwood Road
Clifton, New Jersey 07012
Vincent Brana 365,955(2) 5.1%
80 Wesley Street
South Hackensack, New Jersey 07606
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(1) Includes (i) 638,708 shares of Common Stock held by a company which is
jointly owned by Mr. Beaury and Mr. LoPresti, each of whom may be deemed to
be the beneficial owner of all of such shares, (ii) for Mr. LoPresti 12,938
shares of Common Stock issuable upon the exercise of options pursuant to
the Employee Stock Compensation Program (the "Employee Stock Compensation
Program") which are exercisable within 60 days of April 20, 1999 and (iii)
for Mr. LoPresti - 4,545 shares of Common Stock issuable upon the
conversion of $25,000 in principal amount of the Company's 10% Subordinated
Convertible Debentures due August 2000 (the "Debentures").
(2) Includes 8,654 shares of Common Stock issuable upon the exercise of options
pursuant to the Employee Stock Compensation Program which are exercisable
within 60 days of April 20, 1999.
(3) Includes 597,814 shares of Common Stock issuable upon the exercise of
options pursuant to the Employee Stock Compensation Program which are
exercisable within 60 days of April 20, 1999 and 9,090 shares of Common
Stock issuable upon the conversion of $50,000 in principal amount of the
Company's Debentures.
PROPOSAL ONE
ELECTION OF DIRECTORS
In accordance with the Company's Second Restated Certificate of
Incorporation and By-laws, the number of directors of the Company has been set
at nine. At a Board of Directors meeting held on November 6, 1997 the Board of
Directors agreed to amend the By-Laws of the Company, dividing the Board into
three classes and creating staggered three year terms for the members of each
class to serve. Commencing June 1998, the first class of directors was elected
to hold office for a one-year term, the second class of directors was elected to
hold office for a two-year term and the third class of directors was elected to
held office for a three year term. At each annual meeting thereafter directors
shall be elected to fill the directorship of the class of directors whose terms
have expired. Those directors shall hold office until the third successive
annual meeting after their election and until their successors have been elected
and qualified so that the term of office of one class of directors shall expire
at each annual meeting.
William T. Beaury resigned from the Board of Directors in February 1999
and was replaced by unanimous approval of the Board with Mr. Randall Catlin, to
fill the vacancy in Class II directors until this Meeting. The current members
of the Board of Directors of the Company are as follows:
Class I (Term to expire in 1999) - Albert W. Van Ness, Jr.,
Labe Leibowitz, and Kenneth W. Tunnell.
Class II (Term to expire in 2000) - Jon F. Hanson, Randall Catlin
and Michael Brooks.
Class III (Term to expire in 2001) - Marilu Marshall,
William T. Brannan and John S. Wehrle.
Messrs. Leibowitz and Tunnell are not standing for reelection at the Meeting.
All persons named herein as nominees for director have consented to
serve, and it is not contemplated that any nominee will be unable to serve as a
director. However, if a nominee is unable to serve as a director, a substitute
will be selected by the Board of Directors and all proxies eligible to be voted
for the Board's nominees will be voted for such other person. Further, under an
agreement with the former shareholders of SureWay Air Traffic Corporation
("Sureway"), the Company has agreed to nominate one designee of the former
shareholders of SureWay for election as a director of the Company until November
27, 2000. Mr. Catlin is a former shareholder of Sureway.
The following individuals are nominated at this Annual Meeting of
Shareholders to serve as Class I directors with a term to expire in 2002:
Albert W. Van Ness, Jr., Thomas E. Durkin III, and John A. Simourian.
In addition, Mr. Catlin is nominated at this Annual Meeting of
Shareholders to serve as a Class II director with a term to expire in 2000.
Set forth below for each nominee and for each director whose term
continues beyond this Meeting, is his name, age, the year in which he became a
director of the Company, his principal occupations during the last five years
and any additional directorships in publicly-held companies. The information is
as of February 1, 1999.
Nominees
Class I
Albert W. Van Ness, Jr., 56, Director since 1995. Since February 1997
Mr. Van Ness has served as Chairman of the Board and Chief Executive Officer of
the Company and since May 1998 he has served as acting Chief Financial Officer.
Mr. Van Ness remains a Managing Partner of Club Quarters, LLC, a hotel
development and management company, a position he has held since October 1992.
From June 1990 until October 1992, Mr. Van Ness served as Director of Managing
People Productivity, a consulting firm. Prior thereto, from 1982 until June
1990, Mr. Van Ness held various executive offices with Cunard Line Limited, a
passenger ship and luxury hotel company, including Executive Vice President and
Chief Operating Officer of the Cunard Leisure Division and Managing Director and
President of the Hotels and Resorts Division. Prior thereto, Mr. Van Ness served
as the President of Seatrain Intermodal Services, Inc., a cargo shipping
company. Mr. Van Ness holds a Ph.D. in economics from Syracuse University.
Thomas E. Durkin III, 45, Nominated Director. Mr. Durkin has served
since October 1997 as area Vice President of Business Development of Waste
Management Inc., a multibillion dollar publicly held international solid waste
management company. From September 1978 until September 1997 Mr. Durkin was a
partner at the New Jersey based law firm of Durkin & Durkin, a general corporate
and litigation firm representing numerous clients in the greater New York
metropolitan area. In addition Mr. Durkin has served as a partner of two
privately held real estate brokerage companies. Mr. Durkin graduated from
Fordham University in 1975 and graduated Cum Laude from Seton Hall University
School of Law in 1978.
John A. Simourian, 63, Nominated Director. Mr. Simourian has served
as Chairman of the Board and Chief Executive Officer of Lily Transportation
Corp. ("Lily"), a privately held truck leasing and dedicated logistics company,
since 1958 when Mr. Simourian founded Lily. Lily currently employs approximately
750 employees and leases and or operates 4,000 vehicles out of 27 locations from
New England to North Carolina. Mr. Simourian attended Harvard University where
he received his undergraduate degree in 1957 and his graduate degree from the
Harvard Business School in 1961. In 1982 Mr. Simourian was elected to the
Harvard University Hall of Fame. Mr. Simourian also served in the United States
Navy from 1957 to 1959.
Class II
Randall Catlin, 51, Director since 1999. Mr. Catlin has served as
Air Division Manager of the Company and as Chief Executive Officer of SureWay
Worldwide, a subsidiary of the Company, since March 1997. From 1984 until 1997,
Mr. Catlin was Vice-Chairman of Sureway Worldwide, formerly known as Sureway Air
Traffic Corporation. Mr. Catlin has thirty-one years of experience in the air
courier industry. In addition, Mr. Catlin is currently Chairman of the annual
conference of the Air Courier Conference of America, and has served previously
as President and Director of the organization.
Continuing Directors
William T. Brannan, 50, Director since 1994. President and Chief
Operating Officer of the Company since November 1994. From January 1991 until
October 1994, Mr. Brannan served as President, Americas Region - US Operations,
for TNT Express Worldwide, a major European-based overnight express delivery
company. Mr. Brannan has 24 years of experience in the transportation and
logistics industry.
Michael Brooks, 44, Director since 1995. Southeast Region Manager
of the Company since August 1996 and President of Silver Star Express, Inc.
("Silver Star"), a subsidiary of the Company, since 1995. Prior to the merger of
Silver Star Express, Inc. into the Company, Mr. Brooks was President of Silver
Star Express, Inc. since 1988. Mr. Brooks has 24 years of experience in the
same-day ground and distribution industries. In addition, Mr. Brooks is
currently a Director of the Express Carriers Association, an associate member of
the National Small Shipment Traffic Conference and an affiliate of the American
Transportation Association.
Jon F. Hanson, 62, Director since 1997. Mr. Hanson has served as the
President and Chairman of Hampshire Management Company, a real estate investment
firm since December 1976. From April 1991 to the present, Mr. Hanson has served
as a director to the Prudential Insurance Company of America. In addition, Mr.
Hanson currently serves as a director with the United Water Resources and the
Orange and Rockland Utilities from April 1985 and September 1995, respectively.
Marilu Marshall, 53, Director since 1997. Vice President Human
Resources - North America for Estee Lauder Co. Inc. since October 1998. From
November 1987 until September 1998, Ms. Marshall served as Senior Vice-President
and General Counsel for Cunard Line Limited. Prior thereto, from July 1984 to
September 1987 Ms. Marshall served as the Vice-President and General Counsel of
GNOC, Corp., t/a Golden Nugget Hotel & Casino.
John S. Wehrle, 46, Director since 1997. Managing Director of
Gryphon Holdings, L.P. since January 1999. From August 1997 to December 1998,
Mr. Wehrle served as President and CEO of Heartland Capital Partners,L.P. Prior
thereto, Mr. Wehrle served as Vice President and Head of Mergers & Acquisitions
for A.G. Edwards & Sons, Inc. from July 1994 to July 1997. From 1989 to 1994 Mr.
Wehrle served as Vice President-Financial Planning for The Dyson-Kissner-Moran
Corporation where he was a key participant in acquisitions and corporate
development. He also served as Managing Director of Chase Manhattan Bank, N.A.
for three years from August 1986 to October 1989 where he was engaged in the
execution of Leveraged Acquisitions. From 1976 to 1986 Mr. Wehrle held various
positions with both Price Waterhouse and Touche Ross & Co. in both New York and
London.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR
DESCRIBED ABOVE.
PROPOSAL TWO
AMENDMENT TO 1995 STOCK OPTION PLAN FOR INDEPENDENT DIRECTORS
The Board of Directors amended the Company's 1995 Stock Option Plan for
Independent Directors (the "Director Plan"), subject to shareholder approval at
the annual meeting. The Director Plan was amended to extend the period during
which an option would be exercisable for directors who serve for at least three
years. Prior to the amendment, the Director Plan provided that options would
expire three months after termination of service as a director terminated (or
two years if termination was due to death or one year if due to disability or
immediately if for cause). The amendments provide that if a director has served
as a director for at least three years, all options held by him shall remain
exercisable (to the extent exercisable at the date of termination of service)
for the full ten year term of the option notwithstanding that he ceases to be a
director, whether by reason of death, disability, removal with or without cause
or otherwise. The following is a summary of certain terms of the Director Plan,
the full text of which is set forth in Exhibit A annexed to this Proxy
Statement.
Purpose
The purpose of the Director Plan is to help the Company attract and
retain the most qualified available individuals to serve as independent
directors of the Company and to encourage the highest level of participation by
those persons in the Company's achievement of its strategic goals. The Director
Plan is intended to further these objectives by providing long-term incentives
and rewards to non-employee directors and by associating more closely the
interests of such directors with those of the Company's shareholders.
Options
Under the Director Plan, as amended, an Independent Director (as
defined below) is granted an option (an "Option") to purchase 1,250 shares of
Common Stock on each Quarter Date, meaning the first day on which the Common
Stock is traded on the American Stock Exchange (or the Company's principal
securities exchange or over-the-counter if the Common Stock is no longer traded
on the American Stock Exchange) in January, April, July and October of each
year.
Option Price
The purchase price per share of Common Stock covered by each Option is
the Fair Market Value (as defined in the Director Plan) of a share of Common
Stock on the date the Option is granted.
Exercise of Options; Term
An Option granted to an Independent Director under the Director Plan
becomes fully exercisable as to 100% of the shares of Common Stock covered
thereby one year after the date of grant, and may be exercised as to any or all
full shares of Common Stock as to which such Option is then exercisable. The
purchase price of shares of Common Stock as to which an Option is exercised is
payable in full at the time of exercise in cash or in securities of the Company
having a Fair Market Value on the date of exercise equal to the portion of the
purchase price being paid. In addition, the Independent Director exercising the
option is required to pay promptly any amount necessary to satisfy applicable
Federal, state or local tax and/or withholding requirements.
The term of each Option is ten years from the date of grant, subject in
certain circumstances to early termination or acceleration.
Shares Covered by the Director Plan
An aggregate of 100,000 shares of Common Stock may be granted under the
Director Plan. Such shares of Common Stock may be authorized but unissued shares
or shares which have been reacquired by the Company.
Eligibility
In order to be eligible to participate in the plan on any Quarter Date,
a director must not be an employee of the Company as of such Quarter Date. A
non-employee director of the Company is referred to herein as an "Independent
Director".
At April 20, 1999 outside directors eligible for grants are: Jon F.
Hanson, Marilu Marshall, Labe Leibowitz, Kenneth W. Tunnell and John S. Wehrle.
Thomas E. Durkin III and John A. Simourian will each receive quarterly options
of 1,250 shares at fair market value on July 1, 1999 if elected as directors at
the Meeting, as will the continuing independent directors. Options outstanding
under the Plan in favor of these individuals as of April 20, 1999 are as
follows:
Number of Options Granted Weighted Average
Name (through April 20, 1999) Exercise Price
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Jon F. Hanson 8,750 $3.47
Marilu Marshall 8,750 $3.47
Labe Leibowitz 8,750 $3.47
Kenneth W. Tunnell 11,250 $4.86
John S. Wehrle 7,500 $3.58
The fair market value of the Company's common stock was $3.00 per share
at April 20, 1999.
Transfer; Death or Disability of Holder; Termination of Service on the Board
Options granted under the Director Plan are nontransferable, except by
will or by the laws of descent and distribution. In the event that a
participating director's relationship with the Company terminates as a result of
death, the participating director's estate will have the right to exercise
vested options for a period ending on the earlier of the expiration dates of
such options or two years from the date of death. If the participating
director's relationship with the Company terminates as a result of retirement or
disability, the participating director will have the right to exercise vested
options for a period ending on the earlier of the expiration dates of such
options or one year from the date of termination. If the participating
director's relationship with the Company terminates for cause, all options will
automatically expire upon termination. If the participating director's
relationship with the Company terminates other than as a result of death,
disability, or removal for cause, the participating director will have the right
to exercise vested options for a period ending on the earlier of the expiration
dates of such options or awards or three months from the date of termination. If
the amendment proposed in this proxy statement is adopted, a director who has
served as a director for at least three years will retain his options for the
full ten year term, notwithstanding termination of service as a director. Upon
the occurrence of a "Change in Control Event" (as defined in the Plan), the Plan
Committee may, in its sole discretion, accelerate the exercisability of all
outstanding options or cancel such options in exchange of a cash payment equal
to the difference between the fair market value of the shares of Common Stock on
the date of the Change in Control Event and the exercise price of the related
options.
Administration
The Director Plan is administered by a committee appointed by the Board
of Directors (the "Plan Committee"); no Independent Director (as defined above)
may be a member of the Plan Committee. The Plan Committee is authorized to
interpret the Director Plan, to prescribe, amend and rescind rules and
regulations relating to the Director Plan and to make all other determinations
it may deem necessary or advisable for the administration of the Director Plan.
Termination, Amendment and Modification
The Board of Directors of the Company may, at any time prior to the
termination of the Director Plan, suspend, terminate, modify or amend the
Director Plan; provided that any increase in the aggregate number of shares of
Common Stock reserved for issue upon the exercise of Options, any increase in
the maximum number of shares of Common Stock for which Options may be granted to
any director, any reduction in the purchase price of Common Stock covered by any
Option, any extension of the period during which Options may be granted or
exercised, or any material modification in the requirements as to eligibility
for participation in the Director Plan, shall be subject to the approval of
stockholders, except that any such increase, reduction or change that may result
from anti-dilution adjustments shall not require such approval. Notwithstanding
the foregoing, the Director Plan may not be amended more than once every six
months, other than to comport with changes in the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act of 1974, as amended, or
the rules promulgated thereunder. No suspension, termination, modification or
amendment the Director Plan may, without the express written consent of the
director to whom an Option shall theretofore have been granted, adversely affect
the rights of such director under such Option.
Federal Income Tax Consequences
Treatment of Options
Options granted under the Director Plan will be treated as
Non-Qualified Stock Options under the Code. No income will be recognized to the
optionee at the time of the grant of the Options under the Director Plan, nor
will the Company be entitled to a tax deduction at that time.
Generally, upon exercise of a Non-Qualified Stock Option, an optionee
will be subject to ordinary income tax on the excess of the fair market value of
the stock on the exercise date over the option price. The Company will be
entitled to a tax deduction in an amount equal to the ordinary income recognized
by the optionee in the fiscal year which includes the end of the optionee's
taxable year. The Company will be required to satisfy applicable withholding
requirements in order to be entitled to a tax deduction. In general, if an
optionee, in exercising a Non-Qualified Stock Option, tenders shares of Common
Stock in partial or full payment of the Option price, no gain or loss will be
recognized on the tender.
Persons Subject to Liability Under Section 16(b) of the Exchange Act
Special rules apply under the Code which may delay the timing and alter
the amount of income recognized with respect to awards granted to persons
subject to liability under Section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Such persons include directors, "officers" for
purposes of Section 16 of the Exchange Act and holders of more than 10% of the
outstanding Common Stock.
Tax Withholding
The Company, as and when appropriate, shall have the right to require
each optionee purchasing shares of Common Stock to pay any federal, state or
local taxes required by law to be withheld.
Other
The Director Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and is not
qualified under Section 401 of the Code.
The affirmative vote of a majority of the votes cast at the meeting by
the shareholders entitled to vote thereat is required to adopt this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE 1995 STOCK OPTION PLAN FOR INDEPENDENT DIRECTORS.
BOARD ORGANIZATION AND MEETINGS
During the year ended December 31, 1998, the Board of Directors held
six meetings. During 1998, each member of the Board of Directors attended at
least 75% of all meetings of the Board of Directors and committees of the Board
of Directors of which such director was a member. During 1998, there were five
standing committees of the Board of Directors. Each of the Committees is
described below.
Audit Committee. During 1998, the Audit Committee met three times.
The Audit Committee is comprised of Mr. Tunnell, Chairman, Ms. Marshall, Mr.
Hanson and Mr. Wehrle. The Audit Committee makes recommendations to the Board of
Directors with respect to the selection of the independent auditors of the
Company's financial statements, reviews the scope of the annual audit and meets
periodically with the Company's independent auditors to review their findings
and recommendations, reviews quarterly financial information and earnings
releases prior to public dissemination, and periodically reviews the Company's
adequacy of internal accounting controls.
Compensation Committee. During 1998, the Compensation Committee
met five times. The Compensation Committee is comprised of Ms. Marshall,
Chairperson, Mr. Tunnell, Mr. Leibowitz and Mr. Hanson. The Compensation
Committee periodically reviews and determines the amount and form of
compensation and benefits payable to the Company's principal executive officers
and certain other management personnel. The Compensation Committee also
administers the Company's stock option plans and certain of the Company's other
employee benefit plans.
Executive Committee. During 1998 the Executive Committee did not
meet. The Executive Committee is comprised of Messrs. Van Ness, Chairman as of
April 1996, and Brannan. Mr. Beaury resigned from the Executive Committee in
February 1999. The Executive Committee exercises such authority as is delegated
to it from time to time by the full Board of Directors.
Nominating Committee. The Nominating Committee was formed in February
1997 and is comprised of Messrs. Van Ness, Chairman, Brannan and Tunnell. Mr.
Beaury resigned from the Nominating Committee in February 1999. The Nominating
Committee recommends nominations for outside directors, considers candidates for
director vacancies and other such management matters presented to it by the
Board of Directors. The Nominating Committee will consider appropriate persons
recommended by stockholders for election to the Board of Directors. Stockholders
wishing to submit such recommendations may do so by sending a written notice to
the Secretary of the Company together with supporting information a reasonable
period of time prior to the mailing of the Company's Proxy Statement for the
related Annual Meeting.
Strategic Planning Committee. During 1998 the Strategic Planning
Committee, a committee of officers and directors, met three times. The Strategic
Planning Committee is comprised of Messrs. Van Ness, Chairman, Brannan, Catlin,
Brooks, Andrew B. Kronick, Vice-President - Sales and Marketing, Leibowitz and
Robert Wyatt, Northeast Region Manager. The Strategic Planning Committee reviews
the Company's strategic planning process and periodically updates the strategic
plan.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive additional
compensation for serving as directors. Effective in 1997, each director who is
not an employee of the Company received an annual retainer of $16,000 ($18,000
for any committee chairperson). The total directors fees paid to non-employee
directors in 1998 was $84,000. On September 1, 1997 Mr. Labe Leibowitz's
employment with a subsidiary of the Company was terminated and at that time the
Company entered into a three year Consulting Agreement with Mr. Leibowitz
pursuant to which Mr. Leibowitz is paid fixed fees of $4,166.66 per month.
Directors of the Company are reimbursed for out-of-pocket expenses incurred in
their capacity as directors of the Company. Non-employee directors also receive
stock options under the Company's 1995 Stock Option Plan for Independent
Directors described above.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of April 20, 1999 with
respect to beneficial ownership of the Common Stock by (i) each director, (ii)
each executive named in the Summary Compensation Table (the "Named Executives")
and (iii) all executive officers and directors as a group. Unless otherwise
indicated, the address of each such person is c/o Consolidated Delivery &
Logistics, Inc., 380 Allwood Road, Clifton, New Jersey 07012. All persons listed
have sole voting and investment power with respect to their shares unless
otherwise indicated.
Amount of Beneficial Ownership (1)
Shares Issuable
Shares Issuable Upon Exercise
Upon Conversion of Stock Total
Name Shares of Debentures Options(1) Shares Percentage Owned
Albert W. Van Ness, Jr. 77,051 9,090 597,814 683,955 8.9%
William T. Brannan 75,024 9,090 49,875 133,989 1.9
Michael Brooks 240,537(2) 9,090 14,596 264,223 3.7
Jon F. Hanson 10,000(3) 18,181 3,750 31,931 *
Labe Leibowitz 141,628 7,272 3,750 152,650 2.1
Marilu Marshall - - 3,750 3,750 *
Kenneth W. Tunnell 7,500 4,545 6,250 18,295 *
John S. Wehrle - - 2,500 2,500 *
Randall Catlin 110,899 9,090 18,488 138,477 1.9
Robert Wyatt 50,000(4) 3,030 8,942 61,972 *
All executive officers
and directors as a
group (15
persons) 752,442 73,933 729,903 1,556,278 19.6%
- ---------
* Less than 1%
(1) Includes options granted pursuant to the Employee Stock Compensation
Program and the Director Plan, which are exercisable within 60 days of
April 20, 1999.
(2) Includes 3,500 shares held by Mr. Brooks' wife.
(3) Represents 10,000 shares held by Ledgewood Employees Retirement Plan of
which Mr. Hanson is a beneficiary.
(4) Includes 1,000 shares held by Mr. Wyatt's wife.
EXECUTIVE COMPENSATION
The following table summarizes certain information relating to the
compensation paid or accrued by the Company for services rendered during the
years ended December 31, 1996, 1997 and 1998 to each person serving as the Chief
Executive Officer of the Company and each of the Company's four other most
highly paid executive officers whose compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards (1)
----------------------------------------------------------- -----------------
Other Securities
Annual Underlying All Other
Name and Salary Bonus Compensation Options/SARs Compensation
Principal Position Year ($) ($) ($)(4) ($)(2) ($)
- ---------------------------- -------- -------------- -------- ----------------- ----------------- ---------------
Albert W. Van Ness, Jr. 1998 125,000 - - 220,000(6) -
Chairman and Chief 1997 - - - 308,085 2,500(5)
Executive Officer (3) 1996 - - - 1,000 16,400(5)
William T. Brannan 1998 215,000 96,750 - - -
President and Chief 1997 200,000 15,005 - 22,000 -
Operating Officer 1996 200,000 - - 33,782 -
Michael Brooks 1998 166,333 12,540 - 2,000 -
Southeast Region 1997 174,200 39,480 - 10,000 -
Manager 1996 175,000 - - - -
Randall Catlin 1998 185,546 - - - -
Air Division Manager 1997 188,455 - - 10,700 -
1996 200,020 - - - -
Robert Wyatt 1998 155,833 62,334 - - -
Northeast Region 1997 137,611 55,900 - 5,000 -
Manager 1996 133,333 - - - -
- -------------------
(1) The Company did not grant any stock appreciation rights, restricted stock
awards or make any long-term incentive plan payout during the years ended
December 31, 1996, 1997 and 1998.
(2) Comprised solely of incentive or non-qualified stock options. See
"Stock Option Plans - Employee Stock Compensation Program."
(3) Commencing February 1997 Mr. Van Ness served as Chairman of the Board and
Chief Executive Officer.
(4) Excludes certain personal benefits, the total value of which was less than
the lesser of either $50,000 or 10% of the total annual salary and bonus
for each of the executives.
(5) Represents amounts paid to Mr. Van Ness as Director's fees by the Company.
(6) In addition, Mr. Van Ness was granted 67,229 options on January 4, 1999.
Employment Agreements; Covenants-Not-To-Compete
At the time of his appointment as Chairman of the Board and Chief
Executive Officer, Mr. Van Ness entered into a one-year employment agreement
with the Company effective February 5, 1997. In lieu of a salary, Mr. Van Ness
was given two stock option grants to purchase an aggregate of 100,000 shares of
Common Stock of the Company. Options to purchase 50,000 shares were granted at
$4.875 per share and options to purchase another 50,000 shares were granted at
$7.875 per share. All options vested immediately. At the recommendation of the
Compensation Committee of the Board of Directors, Mr. Van Ness' 1997 employment
agreement was amended later in 1997 granting Mr. Van Ness immediately vested
options to purchase 208,085 additional shares of Common Stock. The Committee
approved options to purchase 50,000 shares at $3.50, 50,000 shares at $6 and
108,085 shares at $2.313. All of Mr. Van Ness' options terminate in the year
2007. Mr. Van Ness' agreement is subject to certain non-competition,
non-solicitation and anti-raiding provisions.
Effective January 5, 1998, Mr. Van Ness entered into an additional
one-year employment agreement with the Company. Pursuant to this agreement, Mr.
Van Ness' base annual salary was determined to be $125,000 and he received a
stock option grant to purchase 100,000 shares of the Company's Common stock at
$2.625 per share. In addition, the Company agreed to pay Mr. Van Ness incentive
compensation comprised of a stock option grant of up to 120,000 shares of the
Company's Common stock based on the achievement of certain corporate goals. The
Compensation Committee determined that these corporate goals were achieved and
Mr. Van Ness was granted 120,000 options at $2.625 per share. The options
granted to Mr. Van Ness in 1998 vested immediately and expire ten years after
the date of grant.
In connection with the Company's initial public offering and
simultaneous acquisition of 11 separate businesses (the "Combination") in
November of 1995, Messrs. Brannan, Brooks, Catlin and Wyatt each entered into an
employment agreement with the Company which commenced on November 27, 1995 for a
term of five years. Pursuant to such agreement as amended to date, Mr. Brannan
receives an annual base salary of $215,000 for the term of the employment
agreement, subject to periodic increases at the discretion of the Board of
Directors. Messrs. Brooks, Catlin and Wyatt receive an annual base salary of
$173,000, $195,000 and $165,000 respectively, subject to periodic increases at
the discretion of the Board of Directors. Mr. Brannan also received in 1996
options to purchase 33,782 shares at an exercise price of $4 7/8 per share which
vest over the term of his contract. Each of the executives will be entitled to
participate in all compensation and employee benefit plans, including such
bonuses as may be authorized by the Board of Directors from time to time.
Each of the employment agreements with Messrs. Brannan, Brooks, Catlin
and Wyatt provides that, in the event of a termination of employment by the
Company without cause, or a termination of employment by the employee as a
result of a constructive discharge, such employee will be entitled to receive
from the Company a lump-sum payment equal to the employee's then-current base
salary for the lesser of (i) the remaining term of the agreement or (ii) three
years (subject to certain limitations). In the event of a change in control of
the Company, if the employee has not received sufficient prior notice that such
employee's employment will be continued following the change in control, such
change in control will be deemed to be a termination without cause with the
effects specified above. In the event of any change in control, the employee may
also elect to treat the change in control as a termination without cause by
giving appropriate notice to the Company. Each employment agreement also
contains certain non-competition covenants which will continue for a period of
two years following termination of employment. In addition, each employment
agreement contains certain anti-solicitation and anti-raiding provisions.
However, in the event of a termination without cause as described above, such
covenants and provisions will not be applicable.
STOCK OPTION PLANS
Employee Stock Compensation Program
In September 1995, the Board of Directors adopted, and the stockholders
of the Company approved, the Employee Stock Compensation Program in order to
attract and retain qualified directors, officers and employees of the Company,
to facilitate performance-based compensation for key employees and to provide
incentives for the participants in the Employee Stock Compensation Program to
enhance the value of the Common Stock. The Employee Stock Compensation Program
is administered by the Compensation Committee and authorizes the granting of
incentive stock options, non-qualified supplementary options, stock appreciation
rights, performance shares and stock bonus awards to key employees of the
Company (approximately 150 in total) including those employees serving as
officers or directors of the Company. The Company has reserved 1,900,000 shares
of Common Stock for issuance in connection with the Employee Stock Compensation
Program. Options granted under the Employee Stock Compensation Program have an
exercise price equal to the fair market value of the underlying Common Stock at
the date of grant and vest over a four-year period unless otherwise agreed by
the Compensation Committee of the Board of Directors at the time of grant.
The following table summarizes certain information relating to the
grant of stock options to purchase Common Stock to each of the executives named
in the Summary Compensation Table above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
Individual Grants
---------------------------------------------------------------------------------
Percent of
Number of Total Grant
Securities Options /SARs Date
Underlying Granted to Exercise or Present
Options/SARs Employees in Base Price Expiration Value
Name Granted (#) (3) Fiscal Year (3) ($/sh) Date $(4)
------------------- ------------------- ----------------- ------------- ------------------ --------------
Albert W. Van January 5,
Ness, Jr. 220,000 (2) 79% 2.63 2008 $441,122
February 2,
Michael Brooks 2,000 (2) 1% 3.00 2008 $4,583
- ------------------------
(1) The Company did not grant any stock appreciation rights in 1998.
(2) Options vest upon date of grant.
(3) Options covering a total of 277,203 shares of Common Stock were granted
under the Employee Stock Compensation Program in 1998. In addition, options
covering 272,229 shares of Common Stock were granted on January 4, 1999,
with 67,229 options granted to Mr. Van Ness and 205,000 options granted to
other officers and key employees of the Company.
(4) The present value of the options granted was determined using the
Black-Scholes pricing model and based on the following assumptions: the
risk free interest was 5.1%, the expected term of the option was 5 years,
the volatility factor was 57% and the dividend yield was 0.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1)
Number of Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End ($)(3)
Acquired Value ----------------------- -----------------------
On Exercise Realized Exercisable/ Exercisable/
Name (#) (2) ($) (2) Unexercisable Unexercisable
- -------------------------- ---------------- ---------------- ----------------------- -----------------------
Albert W. Van Ness, Jr. - - 530,585 / - $207,936 / -
William T. Brannan - - 49,875 / 21,291 $8,459 / $7,587
Michael Brooks - - 14,596 / 10,865 $2,420 / $6,323
Randall Catlin - - 18,488 / 7,596 $1,054 / $3,161
Robert Wyatt - - 8,942 / 6,314 $1,054 / $3,161
- -------------------------
(1) No stock appreciation rights have been granted by the Company.
(2) No options were exercised in 1998.
(3) As of December 31, 1998, the fair market value of a share of Common Stock
(presumed to equal the closing sale price as reported on the Nasdaq
National Market) was $3.156.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
certain officers and persons holding more than 10% of a registered class of the
Company's equity securities to file with the Securities and Exchange Commission
and to provide the Company with initial reports of ownership, reports of changes
in ownership and annual reports of ownership of Common Stock and other equity
securities of the Company. Based solely upon a review of such reports furnished
to the Company by its directors and executive officers, the Company believes
that all such Section 16(a) reporting requirements were timely fulfilled during
1998, except for a late Form 4 filing for Michael Brooks as a result of the
purchase of the Company's common stock. The deficiency has been corrected.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Overview
The Company did not conduct any operations prior to November 1995 when
it acquired 11 companies (the "Subsidiaries") in the same-day and air delivery
and logistics services business (the "Combination"). As part of the Combination,
the Company entered into employment agreements with certain senior officers of
the Subsidiaries. In addition, the Company had previously entered into an
employment agreement with William T. Brannan prior to the Combination. The
employment agreement with Mr. Brannan was the product of arms-length negotiation
between Mr. Brannan and a committee of senior officers of the Subsidiaries. For
a description of the employment agreement, see "Executive Compensation -
Employment Agreements; Covenants Not-to-Compete."
Accordingly, when the Compensation Committee was formed upon the
consummation of the Company's initial public offering in November 1995, all
executive officers were subject to long-term (generally five year) employment
agreements which fixed the salaries and benefits (including stock options) to be
initially granted.
During 1996, the Compensation Committee met several times to consider
the existing compensation structure and to review the compensation of the
Company's senior executives and to consider the possibility of instituting
additional programs to alter the compensation packages for all executives so
that they are appropriate to motivate and retain talented executives and to
recognize superior performance. In 1997 the Compensation Committee met seven
times to review certain compensation and stock options recommendations made by
senior management for various management individuals in the Company. To this end
the Compensation Committee approved the amendment of Mr. Van Ness' employment
agreement and, in addition, approved the issuance of certain bonuses and
incentive stock options to key management employees as well as new management
hires. The Compensation Committee also approved the establishment of an Employee
Stock Purchase Plan to be made available to all employees during the 1998 fiscal
year. In 1998 the Compensation Committee met five times and approved the
amendment of Mr. Van Ness' employment agreement, reviewed the attainment of Mr.
Van Ness's goals as related to the Company's strategic plan and to his
contingent compensation, approved modifications to the 1995 Stock Option Plan
for Independent Directors, approved new employee stock options grants and
reviewed and approved the waivers of termination rights for specific stock
option grants.
Base Salary
Base salaries for the five highest paid executive officers of the
Company for 1998 ranged from $165,000 to $215,000. The general range of annual
salaries for senior officers is from $110,000 to $215,000. Prior to the
Combination, the directors of the Company attempted to standardize terms of
employment for the executive officers of the Subsidiaries to facilitate the
Combination among the officers yet provide appropriate variations in base salary
based on the size of the companies acquired.
During 1997 many senior executives employed by the Company's
subsidiaries agreed to waive rights under their Employment Agreements and accept
reduced base salaries so that base pay more closely reflected each individual's
role in the Company.
Pursuant to the contract he signed prior to the Offering, Mr. Brannan
was to receive an increase in compensation from $200,000 to $250,000 as of
November 1996. However, having considered, among other things, the
recommendation of the consultant retained by the Compensation Committee, it was
determined that it would be preferable for Mr. Brannan to have incentive stock
options in lieu of additional cash compensation.
Annual Incentive Plan
The incentive plan is designed to provide current compensation to selected key
employees who contribute in a substantial degree to the success of the Company.
Pursuant to the plan, Executives selected by the Compensation Committee (with
the advice of the Chief Executive Officer) are entitled to cash bonuses in the
event that the Company achieves certain performance targets based upon sales
volume, levels of responsibility and goals. Cash bonuses under the plan totaling
approximately $800,000 were earned in 1998.
Long-Term Incentive Plan
A shareholder approved long-term incentive plan consisting of the grant
of stock options to key employees under the Company's 1995 Employee Stock
Compensation Program (the "Program") is designed to focus executive efforts on
the long-term goals of the Company and to maximize total returns to
stockholders. Stock options align the interest of employees and stockholders by
providing value to the executive through stock price appreciation only.
During 1998, the Company granted a total of 277,203 stock options to
key employees under the Program. The stock options granted during 1998 were
granted at fair market value as of the date of grants, which varied from $2.63
per share to $5.00 per share.
It is anticipated that future stock option awards will be made
periodically at the discretion of the Committee (with the advice of the Chief
Executive Officer). Stock option grant sizes will be evaluated by regularly
assessing competitive market practices and the overall performance of the
Company.
1998 Chief Executive Officer Pay
On February 5, 1997 Mr. Albert W. Van Ness, Jr. assumed the
responsibilities of Chief Executive Officer of the Company pursuant to a one
year employment agreement. The Compensation Committee amended the terms of the
employment agreement in December 1997, January 1998 and January 1999. Pursuant
to the terms of the employment agreement, as amended in January 1998, Mr. Van
Ness' employment agreement was renewed for an additional one year term with a
base salary of $125,000 for 1998. He was also granted stock options covering
220,000 shares with an exercise price of $2.625, which vested in full in 1998.
Pursuant to the terms of the employment agreement, as amended in January 1999,
Mr. Van Ness and the Compensation Committee have agreed to extend Mr. Van Ness'
Employment Agreement through December 31, 1999. The terms of the employment
agreement for 1999 include an annual base salary of $150,000, a stock bonus with
a fair market value of $150,000, immediately vested stock option grants of
67,229 shares with an exercise price of $3.188 per share and contingent
compensation of $150,000. All stock options granted to Mr. Van Ness in 1997 and
1998 are exercisable for a period of ten years from the date of grant.
This report shall not be deemed incorporated by reference by any
general statement incorporating this Proxy Statement by reference to any filing
under the Securities Act of 1933, as amended, or under the Securities Exchange
Act of 1934, as amended, and shall not be deemed filed under either of such acts
except to the extent that the Company specifically incorporates this information
by reference.
This report is furnished by the Compensation Committee of the Board of
Directors.
Marilu Marshall, Chair
Jon F. Hanson Labe Leibowitz Kenneth W. Tunnell
PERFORMANCE GRAPH
The following chart compares the cumulative total shareholder return on
the Company's Common Stock to the cumulative total return of the Standard &
Poor's 500 Stock Index and the Standard & Poor's Transportation Index for the
portion of 1995 that the Company's Common Stock was registered pursuant to
Section 12 of the Exchange Act, assuming the investment of $100 on November 20,
1995 and the reinvestment of all dividends since that date to December 31, 1998.
[GRAPHIC OMITTED]
The performance of the Company's Common Stock reflected above is not
necessarily indicative of the future performance of the Common Stock. The total
return on investment (change in the year-end stock price plus reinvested
dividends) for the period shown for the Company, the S&P 500 Index and the S&P
Transportation Index is based on the stock price or composite index at November
20, 1995.
The performance chart which appears above shall not be deemed to be
incorporated by reference by any general statement incorporating this Proxy
Statement by reference into any filing under the Securities Act of 1933, as
amended, or under the Exchange Act, and shall not be deemed filed under either
of such Acts except to the extent that the Company specifically incorporates
this information by reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is comprised currently of Ms.
Marilu Marshall, Chair, Mr. Jon F. Hanson and Mr. Kenneth W. Tunnell. None of
the Committee's members have been an officer or employee of the Company. At
present, no executive officer of the Company and no member of its Compensation
Committee is a director or compensation committee member of any other business
entity which has an executive officer that sits on the Company's Board of
Directors or Compensation Committee.
CERTAIN TRANSACTIONS
Real Estate Transactions
Mr. Brooks and members of his immediate family own various real estate
partnerships which lease properties to Silver Star, a Subsidiary of the Company
for use as terminals in Miami, Florida, Atlanta and Valdosta, Georgia and
Dayton, Ohio. In 1998, Silver Star paid approximately $117,000 in rent for these
properties. As of January 1, 1999, the Company is obligated to pay rentals of
approximately $122,000 for these properties, which the Company believes to be
the fair market rental value of the properties.
Other Transactions
Mr. Labe Leibowitz has an interest in Lee B. Leasing, a limited
partnership which purchases automobiles and equipment and leases them to
National, a Subsidiary of the Company. In 1998 National agreed to lease vehicles
and other equipment from Lee B. Leasing, which, in the aggregate, totaled
approximately $35,000 in annual lease payments. The Company believes these lease
payments to be no less favorable to the Company than could be obtained from
unaffiliated third parties.
Company Policy
In the future, transactions with officers, directors and affiliates of
the Company are anticipated to be minimal and will be approved by a majority of
the Board of Directors, including a majority of the disinterested members of the
Board of Directors, and will be made on terms no less favorable to the Company
than could be obtained from unaffiliated third parties.
PROPOSAL THREE
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as the
Company's independent public accountants for the year ending December 31, 1999.
Arthur Andersen LLP has served as the Company's independent public accountants
since its formation in 1995. Although the appointment of independent public
accountants is not required to be approved by the stockholders, the Board of
Directors believes stockholders should participate in the selection of the
Company's independent public accountants. Accordingly, the stockholders will be
asked at the Meeting to ratify the Board's appointment of Arthur Andersen LLP as
the Company's independent public accountants for the year ending December 31,
1999.
Representatives of Arthur Andersen LLP will be present at the Meeting.
They will have an opportunity to make a statement if they so desire and will be
available to respond to appropriate questions of the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL THREE DESCRIBED ABOVE.
STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the 2000
Annual Meeting of Stockholders must be received by the Company at the address
specified below no later than the close of business on December 31, 1999 to be
considered for inclusion in the Proxy Statement for the 2000 Annual Meeting and
by March 16, 2000 in order for the proposal to be considered timely for
consideration at next year's Annual Meeting (but not included in the Proxy
Statement for such meeting). Any proposal should be addressed to Mark Carlesimo,
Secretary, Consolidated Delivery & Logistics, Inc., 380 Allwood Road, Clifton,
New Jersey 07012 and should be sent by certified mail, return receipt requested.
OTHER MATTERS
The Board of Directors does not know of any matters, other than those
referred to in the accompanying Notice for the Meeting, to be presented at the
meeting for action by the stockholders. However, if any other matters are
properly brought before the meeting or any adjournments thereof, it is intended
that votes will be cast with respect to such matters, pursuant to the proxies,
in accordance with the best judgment of the person acting under the proxies.
By Order of the Board of Directors
/s/ Mark Carlesimo
Mark Carlesimo
Secretary
April 30, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31,
1998, INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL
NOR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
EXHIBIT A
CONSOLIDATED DELIVERY & LOGISTICS, INC.
1995 STOCK OPTION PLAN
FOR INDEPENDENT DIRECTORS
(as amended and restated through March 31, 1999)
(new material is indicated by an underline)
1. Purpose of the 1995 Stock Option Plan for Independent Directors.
Consolidated Delivery & Logistics, Inc. (the "Company")
desires to attract and retain the most qualified available individuals to serve
as independent directors of the Company and to encourage the highest level of
participation by those persons in the Company's achievement of its strategic
goals. The 1995 Stock Option Plan for Independent Directors (the "Director
Plan") is intended to contribute significantly to the attainment of these
objectives, by (i) providing long-term incentives and rewards to all
non-employee directors of the Company, (ii) assisting the Company in attracting
and retaining independent directors with experience and ability and (iii)
associating more closely the interests of such directors with those of the
Company's stockholders.
Transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Securities
Exchange Act of 1934 (the "1934 Act"). To the extent any provision of the
Director Plan or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.
2. Definitions.
As used herein, the following definitions shall apply.
(a) "Anniversary Date" shall mean, for each Independent
Director, the date on which such Independent Director is first elected to serve
on the Board and each annual anniversary of such date on which such person
continues to serve on the Board as an Independent Director.
(b) "Board" shall mean the Board of Directors of the Company.
(c) A "Change in Control Event" shall be deemed to have
occurred if:
(i) Any person, firm or corporation acquires
directly or indirectly the Beneficial Ownership (as defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition, the acquirer has Beneficial
Ownership of voting securities representing 50% or more of the total voting
power of all the then-outstanding voting securities of the Company;
(ii) the individuals (A) who, as of the date
of closing of the Combination described in the Company's original registration
statement constitute the Board (the "Original Directors") or (B) who thereafter
are elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least 2/3 of the Original Directors then
still in office (such Directors being called "Additional Original Directors") or
(C) who are elected to the Board and whose election or nomination for election
to the Board was approved by a vote of at least 2/3 of the Original Directors
and Additional Original Directors then still in office, cease for any reason to
constitute a majority of the members of the Board;
(iii) The stockholders of the Company shall
approve a merger, consolidation, recapitalization or reorganization of the
Company or consummation of any such transaction if stockholder approval is not
sought or obtained, other than any such transaction which would result in at
least 75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each such
continuing holder relative to such other continuing holders being not altered
substantially in the transaction; or
(iv) The stockholders of the Company shall
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or a substantial portion of the
Company's assets (i.e. 50% or more in value of the total assets of the Company).
(d) "Code" shall mean the Internal Revenue code of 1986,
as amended.
(e) "Committee" shall mean the stock option committee
appointed by the Board in accordance with paragraph 4(a) of the Director Plan.
(f) "Common Stock" shall mean the common stock, par value
$.001 per share, of the Company.
(g) "Employee" shall mean any person employed on a full-time
basis by the Company or any present or future Subsidiary of the Company.
(h) "Fair Market Value" of a share of Common Stock shall be
determined as set forth in Section 7(b) of the Director Plan.
(i) "Independent Director" shall mean any member of the Board,
who, on any Quarter Date, is not an Employee.
(j) "Option" shall mean the right, granted pursuant to Section
6 of the Director Plan, to purchase one or more shares of Common Stock.
(k) "Optionee" shall mean any person who receives an Option
under the Director Plan.
(l) "Quarter Date" shall mean the first day on which the
Common Stock is traded on the American Stock Exchange (or the Company's
principal securities exchange or over-the-counter if the Common Stock is no
longer traded on the American Stock Exchange) in January, April, July and
October of each year.
(m) "Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" as defined in Subsections 424(f) and
(g) of the Code.
3. Scope and Duration of the Director Plan.
Under the Director Plan Options to purchase Common Stock of
the Company shall be granted. An aggregate of 100,000 shares of Common Stock may
be granted under the Director Plan. Upon exercise of Options granted under the
Director Plan, Optionees may receive authorized but unissued shares of Common
Stock or shares of Common Stock which shall have been or which may be reacquired
by the Company, as the Board of Directors of the Company shall from time to time
determine. Such aggregate numbers shall be subject to adjustment as provided in
Paragraph 13. If an Option shall expire or terminate for any reason without
having been exercised in full, the shares of Common Stock represented by the
portion thereof not so exercised or surrendered shall (unless the Director Plan
shall have been terminated) become available for other options under the
Director Plan. No Option shall be granted under the Director Plan more than ten
years after the adoption of the Director Plan by the Board. The grant of an
Option is sometimes referred to as an Award thereof.
4. Administration of the Director Plan.
The Board shall appoint a committee of the Board (the
"Committee") to administer the Director Plan. The Committee shall consist of not
less than three Directors, one of whom shall be appointed Chairperson, and none
of whom shall be Independent Directors.
The Committee shall have authority in its discretion, subject
to and not inconsistent with the express provisions of the Director Plan, to
interpret the Director Plan; to prescribe, amend and rescind rules and
regulations relating to the Director Plan, including, without limitation, such
rules and regulations as it shall deem advisable so that transactions involving
Options qualify, to the maximum extent possible, for exemptions under such rules
and regulations as the Securities and Exchange Commission may promulgate from
time to time exempting transactions from Section 16(b) of the Securities
Exchange Act of 1934, as amended; and to make all other determinations it may
deem necessary or advisable for the administration of the Director Plan. No
member of the Committee shall be liable for any action or determination taken or
made in good faith with respect to the Director Plan or any Option granted under
it.
5. Eligibility.
(a) The only persons eligible to receive Options under the
Plan shall be persons who, on a Quarter Date, constitute Independent Directors.
(b) No member of the Committee shall be eligible to receive
Options under the Plan while serving on the Committee.
6. Automatic Grant.
The Company shall grant to each Independent Director an Option
to purchase 1,250 shares of Common Stock (subject to adjustment pursuant to
Section 13 hereof) on each Quarter Date.
7. Option Price.
(a) The purchase price per share of the Common Stock covered
by each Option shall be the Fair Market Value of a share of the Common Stock on
the date the Option is granted.
(b) If, at the time an Option is granted, the Common Stock is
publicly traded, such fair market value shall be the closing price (or the mean
of the closing or last bid and asked prices) of a share of Common Stock on such
date as reported in the Wall Street Journal (or a publication or qualifying
service deemed equivalent to the Wall Street Journal for such purpose by the
Committee) for the over-the-counter market or for any national securities
exchange or other securities market which at the time is included in the stock
price quotations of such publication. In the event that the Committee shall
determine such stock price quotation is not representative of fair market value
by reason of the lack of a significant number of recent transactions or
otherwise, the Committee may determine fair market value in such a manner as it
shall deem appropriate under the circumstances. If, at the time an Option is
granted, the Common Stock is not publicly traded, the Committee shall make a
good faith attempt to determine such fair market value, which determination
shall be final and binding for all purposes hereunder.
8. Term of Options.
Subject to earlier termination as provided in Paragraphs 11
and 12 and subject to acceleration as provided in Paragraph 13, the term of each
Option shall be ten years from the date of grant.
9. Exercise of Options.
(a) An Option granted to an Independent Director under the
Director Plan shall become fully exercisable as to 100% of the shares of Common
Stock covered thereby one year after the date of grant.
(b) An Option may be exercised as to any or all full
shares of Common Stock as to which the option is then exercisable.
(c) The purchase price of the shares of Common Stock as to
which an Option is exercised shall be paid in full in cash at the time of
exercise, provided that the purchase price may be paid, in whole or in part, by
surrender or delivery to the Company of securities of the Company having a Fair
Market Value on the date of the exercise equal to the portion of the purchase
price being so paid. In addition, the holder shall, upon notification of the
amount due and prior to or concurrently with delivery to the holder of a
certificate representing such shares of Common Stock, pay promptly any amount
necessary to satisfy applicable Federal, state or local tax and/or withholding
requirements.
(d) Except as provided in Paragraphs 11 and 12, no
Option may be exercised unless the holder thereof is then a director of the
Company.
(e) The Option holder shall have the rights of a stockholder
with respect to shares of Common Stock covered by an Option only upon becoming
the holder of record of such shares of Common Stock.
10. Nontransferability of Options.
No Options granted under the Director Plan shall be
transferable other than by will or by the laws of descent and distribution.
Options may be exercised, during the lifetime of the holder, only by the holder.
11. Termination of Relationship to the Company.
(a) In the event that any holder who has served as a director
for less than three consecutive years shall cease to be a director, except as
set forth in Paragraph 12 or upon removal for cause, such Option (subject to the
provisions of the Director Plan) may be exercised (to the extent that the holder
was entitled to exercise at the termination of his service as a director) at any
time within three months after such termination. In the event that any holder
who has served as a director for a period of three consecutive years or more
shall cease to be a director for any reason, the Option (to the extent it was
exercisable at the termination of the director's service) shall remain
exercisable until the expiration date of the Option (i.e. ten years after the
grant date).
(b) Other than as provided in Paragraph 11(a), Options granted
under the Director Plan shall not be affected by any change of duties or
position so long as the holder continues to be a director of the Company.
(c) Nothing in the Director Plan or in any Option granted
pursuant to the Director Plan shall confer upon any individual any right to
continue as a director of the Company, or affect the right of the Company or its
shareholders to terminate his directorship at any time.
(d) Upon removal for cause, an Option shall terminate
immediately.
12. Death or Disability of Holder.
If a person to whom an Option has been granted under the
Director Plan shall:
(a) die (i) while serving as a director of the Company or (ii)
within three months after the termination of such position (other than
termination for cause or, voluntarily on his part and without the consent of the
Company, he terminates his director position with the Company, which consent
shall be presumed in the case of retirement), or
(b) become permanently and totally disabled within the
meaning of Section 22(e)(3) of the Code while serving as a director,
then if the Option was otherwise exercisable at the time of the happening of
such event, such Option may be exercised as set forth herein by the holder or,
in the event of death, by the person or persons to whom the holder's rights
under the Option pass by will or applicable law, or if no such person has such
right, by his executors or administrators, the period for exercise to the extent
provided in Paragraph 11 shall be extended to one year in the case of the
permanent and total disability or two years in the case of the death of the
holder, but not more than 10 years after the date such Option was granted.
Notwithstanding the above, in the event that any holder who has served as a
director for a period of three consecutive years or more shall cease to be a
director for reasons of death or disability, the Option (to the extent it was
exercisable at the termination of the director's service) shall remain
exercisable by the holder or his lawful heirs, executors or administrators until
the expiration date of the Option (i.e. ten years after the grant date).
13. Adjustments upon Changes in Capitalization.
Notwithstanding any other provision of the Director Plan, each
agreement setting forth the grant of an Option hereunder may contain such
provisions as the Committee shall determine to be appropriate for the adjustment
of the number and class of shares of Common Stock covered by such Option, the
Option prices and the number of shares of Common Stock as to which Options shall
be exercisable at any time, in the event of changes in the outstanding Common
Stock of the Company by reason of stock dividends, split-ups, split-downs,
reverse splits, recapitalizations, mergers, consolidations, combinations or
exchanges of shares, spinoffs, reorganizations, liquidations and the like. In
the event of any such change in the outstanding Common Stock of the Company, the
aggregate number of shares of Common Stock as to which Options may be granted
under the Director Plan to any director shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. In the event of the
dissolution, liquidation, merger or consolidation of the Company or a sale of
all or substantially all of the assets of the Company, or upon any other Change
in Control Event, then the Committee shall determine, in its sole discretion,
either (i) to provide for the immediate exercisability of all outstanding
Options (immediately prior to or upon the consummation of the Change in Control
Event) or (ii) to pay the Optionees on the date of the consummation of such
Change in Control Event, in consideration for the cancellation of the Options,
cash equal to the aggregate difference between the Fair Market Value of the
shares of Common Stock subject to the outstanding Options on the date such
Change in Control Event occurs and the exercise price of the outstanding
Options.
14. Effectiveness of the Director Plan.
The Director Plan as amended by the Board on August 6, 1997
shall become effective as of October 1, 1997 subject to approval by the
shareholders within one year of the date of approval by the Board. If any
options are granted under the Director Plan as amended and shareholder approval
is not timely obtained, all options granted hereunder from and after the date of
amendment shall be void. The exercise of the Options under the Director Plan
shall be subject to the condition that at the time of exercise a registration
statement under the Securities Act of 1933 with respect to such shares of Common
Stock shall be effective, or other provision satisfactory to the Committee shall
have been made so that shares of Common Stock may be issued without violation of
such Act. If the shares of Common Stock issuable upon exercise of an Option are
not registered under such Act, and if the Committee shall deem it advisable, the
Optionee may be required to represent and agree in writing (i) that any shares
of Common Stock acquired pursuant to the Director Plan will not be sold except
pursuant to an effective registration statement under such Act or an exemption
from the registration provisions of the Act and (ii) that such Optionee will be
acquiring such shares of Common Stock for his own account and not with a view to
the distribution thereof.
15. Termination and Amendment of the Director Plan.
The Board of Directors of the Company may, at any time prior
to the termination of the Director Plan, suspend, terminate, modify or amend the
Director Plan; provided that any increase in the aggregate number of shares of
Common Stock reserved for issue upon the exercise of Options, any increase in
the maximum number of shares of Common Stock reserved for issue upon the
exercise of Options, any increase in the maximum number of shares of Common
Stock for which Options may be granted to any director, any reduction in the
purchase price of Common Stock covered by any Option, any extension of the
period during which Options may be granted or exercised, or any material
modification in the requirements as to eligibility for participation in the
Director Plan, shall be subject to the approval of stockholders, except that any
such increase, reduction or change that may result from adjustments authorized
by Paragraph 13 shall not require such approval. Notwithstanding the foregoing,
the Director Plan may not be amended more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income Security Act
of 1974, as amended, or the rules promulgated thereunder. No suspension,
termination, modification or amendment the Director Plan may, without the
express written consent of the director to whom an Option shall theretofore have
been granted, adversely affect the rights of such director under such Option.
16. Financing for Investment in Stock of the Company.
The Committee may cause the Company or any Subsidiary to give
or arrange for financing, including direct loans, secured or unsecured, or
guaranties of loans by banks which loans may be secured in whole or in part by
assets of the Company or any Subsidiary or shares of Common Stock, to any
director under the Director Plan who shall have so served for a period of at
least one year at the end of the fiscal year ended immediately prior to
arranging such financing; but the Committee may, in any specific case, authorize
financing for a director who shall not have served for such a period. Such
financing shall be for the purpose of providing funds for the purchase by the
director of shares of Common Stock pursuant to the exercise of an Option and/or
for payment of taxes incurred in connection with such exercise, and/or for the
purpose of otherwise purchasing or carrying a stock investment in the Company.
The maximum amount of liability incurred by the Company and its subsidiaries in
connection with all such financing outstanding shall be determined from time to
time in the discretion of the Board. Each loan shall bear interest at a rate not
less than that provided by the Code and other applicable laws, rules, and
regulations in order to avoid the imputation of interest at a higher rate. Each
recipient of such financing shall be personally liable for the full amount of
all financing extended to him. Such financing shall be based upon the judgment
of the Board that such financing may reasonably be expected to benefit the
Company, and that such financing as may be granted shall be consistent with the
Certificate of Incorporation and By-Laws of the Company or such Subsidiary, and
applicable laws.
17. Severability.
In the event that any one or more provisions of the Director
Plan or any agreement pursuant to which an Option is granted, or any action
taken pursuant to the Director Plan or such agreement, should, for any reason,
be unenforceable or invalid in any respect under the laws of the United States,
any state of the United States or any other government, such unenforceability or
invalidity shall not affect any other provision of the Director Plan or of such
or any other agreement but in such particular jurisdiction and instance the
Director Plan and the affected agreement shall be construed as if such
unenforceable or invalid provision had not been contained therein or if the
action in question had not been taken thereunder.
18. Conditions Upon Issuance of Shares.
Shares of Common Stock shall not be issued with respect to any
Option granted under the Plan unless the issuance and delivery of such shares
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law and the requirements of any
stock exchange upon which the shares may then be listed or any national
securities association maintaining a market in which the shares are then
included.
The inability of the Company to obtain any approval or consent
from any regulatory body or authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares of Common Stock
hereunder shall relieve the Company of any liability in respect of the
non-issuance or sale of such shares.
As a condition to the exercise of any Option, the Company may
require the person exercising the Option to make such representations and
warranties, and to agree to any restrictions with respect to the sale of the
shares of Common Stock issuable upon the exercise, as may be necessary to assure
the availability of an exemption from the registration requirements of federal
or state securities law.
19. Sunday or Holiday.
In the event that the time for the performance of any action
or the giving of any notice is called for under the Plan within a period of time
which ends or falls on a Sunday or legal holiday, such period shall be deemed to
end or fall on the next day following such Sunday or legal holiday which is not
a Sunday or legal holiday.
20. Governing Law.
The Plan shall be governed by and construed in accordance with
the laws of the State of Delaware.
PROXY
CONSOLIDATED DELIVERY & LOGISTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, JUNE 16, 1999
The undersigned hereby appoints Albert W. Van Ness, Jr. and William T.
Brannan, and each of them, attorneys and proxies with power of substitution, to
vote for and on behalf of the undersigned at the Consolidated Delivery &
Logistics, Inc. Annual Meeting of Stockholders to be held on June 16, 1999 and
at any adjournments or postponements thereof (the "Meeting"), upon the following
matters and upon any other business that may properly come before the Meeting,
as set forth in the related Notice of Meeting and Proxy Statement, both of which
have been received by the undersigned.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned stockholder. If this proxy is executed but no
direction is made, this proxy will be voted FOR the board's nominees for
director, FOR the amendment to the 1995 Stock Option Plan for Independent
Directors and FOR the ratification of the Company's Independent accountants.
PLEASE INDICATE YOUR VOTE ON THE OTHER SIDE.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)
[X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3
Against all nominees
For all *(except as marked to
nominees the contrary below)
1. Election of 4 Directors. [ ] [ ]
* To withhold authority for any individual nominees, print nominee's name on the
line below.
- ---------------------------------------------------------------------------
Nominees:
Class I
Thomas E. Durkin III
John A. Simourian
Albert W. Van Ness, Jr.
Class II
Randall Catlin
2. Ratification of amendment to the 1995 Stock Option Plan for
Independent Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of Arthur Andersen LLP as independent public
accountants for 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
If you have noted an address change or comments
on either side of this card, mark here. [ ]
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
Signature(s) _______________________________ Dated __________________, 1999
NOTE: Please sign this proxy and return it promptly whether or not you expect
to attend the Meeting. You may nevertheless vote in person if you
attend. Please sign exactly as your name appears hereon. Give full
title if an Attorney, Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or
if one signs, he or she should attach evidence of authority.