SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
CENTRAL EUROPEAN DISTRIBUTION 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:
-----------------------------------------------------------------------
[LOGO OF CEDC]
APRIL 6, 2001
Dear Stockholder:
On behalf of the Board of Directors of Central European Distribution
Corporation ("the Company"), it is my pleasure to invite you to the 2001 Annual
Meeting of Stockholders (the "Annual Meeting"). The Annual Meeting will be held
on Monday, April 30, 2001 at 10:00 a.m., local time, at the offices of Hogan &
Hartson L.L.P., 885 Third Avenue, 26th Floor, New York, New York.
The Annual Meeting has been called for the following purposes: (1) to
elect seven directors to serve on the Board of Directors, each for a one-year
term; (2) to ratify the Board of Directors' appointment of Ernst & Young Audit
Sp. z o.o. as the Company's independent public auditors for the 2001 fiscal
year; and (3) to transact such other business as may properly come before the
Annual Meeting or any adjournment thereof, all as more fully described in the
accompanying Proxy Statement. Management will also review 2000 results and
respond to stockholder questions.
The Board of Directors has approved the matters being submitted by the
Company for stockholder approval at the Annual Meeting and recommends that
stockholders vote "FOR" such proposals. It is important that your views be
represented at the Annual Meeting. Whether or not you plan to attend the Annual
Meeting, please complete, sign and date the enclosed Proxy Card and promptly
return it in the prepaid envelope.
Sincerely,
/s/ WILLIAM V. CAREY
--------------------
William V. Carey
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
CENTRAL EUROPEAN
DISTRIBUTION CORPORATION
1343 MAIN STREET, SARASOTA, FLORIDA 34236
(941) 330-1558
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 2001
NOTICE IS HEREBY GIVEN that the 2001 annual meeting of stockholders
(the "Annual Meeting") of Central European Distribution Corporation, a Delaware
corporation (the "Company"), will be held on Monday, April 30, 2001 at 10:00
a.m., local time, at the offices of Hogan & Hartson L.L.P., 885 Third Avenue,
26th Floor, New York, New York, for the purpose of considering and voting upon
the following matters:
1. To elect seven (7) directors to serve on the Board of
Directors, each for a one-year term and until their respective
successors are elected;
2. To ratify the Board of Directors' appointment of Ernst & Young
Audit Sp. z o.o. as the Company's independent public auditors
for the 2001 fiscal year; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this notice.
Pursuant to the Company's Bylaws, the Board of Directors has fixed
March 30, 2001 as the record date for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting and at all adjournments thereof.
Only stockholders of record at the close of business on that date will be
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. A list of all stockholders entitled to vote at the Annual Meeting will
be open for examination by any stockholder for any purpose germane to the Annual
Meeting during ordinary business hours for a period of ten (10) days before the
Annual Meeting at the offices of the Company located at 1343 Main Street,
Sarasota, Florida 34236.
By Order of the Board of Directors
/s/ JEFFREY PETERSON
--------------------
Jeffrey Peterson
VICE-CHAIRMAN AND SECRETARY
Sarasota, Florida
APRIL 6, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE. IF YOU SIGN AND RETURN YOUR PROXY CARD WITHOUT
SPECIFYING A CHOICE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS. YOU MAY, IF YOU WISH, REVOKE YOUR
PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED BY FILING WITH THE SECRETARY OF
THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE
OR BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
CENTRAL EUROPEAN
DISTRIBUTION CORPORATION
1343 MAIN STREET, SARASOTA, FLORIDA 34236
(941) 330-1558
---------------------------
PROXY STATEMENT
2001 ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 2001
---------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement and the accompanying Proxy Card are furnished to
stockholders of Central European Distribution Corporation, (the "Company") in
connection with the solicitation by the Company's Board of Directors (the "Board
of Directors" or the "Board") of proxies to be used at the 2001 annual meeting
of stockholders (the "Annual Meeting"), to be held on Monday, April 30, 2001, at
10:00 a.m., local time, at the offices of Hogan & Hartson L.L.P., 885 Third
Avenue, 26th Floor, New York, New York and at any adjournments thereof.
This Proxy Statement, the Notice of Annual Meeting of Stockholders, the
Proxy Card and the Company's Annual Report to Stockholders were first mailed to
stockholders on or about April 6, 2001.
ABOUT THE ANNUAL MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Annual Meeting, stockholders will act upon the matters outlined
in the accompanying notice of meeting, including the election of directors and
the ratification of the Company's independent auditors. In addition, the
Company's management will report on the performance of the Company during 2000
and respond to appropriate questions from stockholders.
WHO IS ENTITLED TO VOTE?
Only stockholders of record at the close of business on the record
date, March 30, 2001, are entitled to receive notice of the annual meeting and
to vote the shares of common shares that they held on that date at the meeting,
or any postponement or adjournment of the meeting. Each outstanding share
entitles its holder to cast one vote on each matter to be voted upon.
Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring appropriate
documentation from your broker or nominee to vote personally at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 4,329,456 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the
number of shares considered to be present at the meeting for purposes of
determining the presence of a quorum. A "broker non-vote" occurs when a broker
or other nominee indicates on the proxy card that it does not have discretionary
authority to vote on a particular matter.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and
return it to the Company, it will be voted as you direct. If you are a
registered stockholder and attend the meeting, you may deliver your completed
proxy card in person. "Street name" stockholders who wish to vote at the meeting
will need to obtain and vote a proxy from the institution that holds their
shares. The Company has made proxy statements, proxies and annual reports
available to the nominee institutions for delivery to "street name"
stockholders.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote
at any time before the proxy is exercised by filing with the secretary of the
Company either a notice of revocation or a duly executed proxy, bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendation is set
forth together with the description of each item in this proxy statement. The
Board recommends a vote:
o for election of the nominated slate of seven directors (see page 4),
and
o for ratification of the appointment of Ernst and Young Audit Sp.
z o.o. as the Company's independent auditors (see page 16).
With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board of Directors
or, if no recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one
or more directors will not be voted with respect to the director or directors
indicated, although it will be counted for purposes of determining whether there
is a quorum. Abstentions and broker non-votes will have no legal effect on the
election of directors. The Certificate of Incorporation does not provide for
cumulative voting in the election of directors.
RATIFICATION OF INDEPENDENT AUDITORS AND OTHER ITEMS. For the
ratification of the Company's independent auditors and any other item voted upon
at the Annual Meeting, assuming that a quorum is present, the affirmative vote
of the holders of a majority of the shares represented in person or by proxy and
entitled to vote on the item will be required for approval. Abstentions will not
be voted for any such matter. Accordingly, abstentions will have the same legal
effect as a negative vote. Broker non-votes will not be counted as a vote cast.
-3-
WHO WILL BEAR THE COSTS OF SOLICITING PROXIES FOR THE ANNUAL MEETING?
The cost of soliciting proxies for the Annual Meeting will be borne by
the Company. In addition to the use of the mails, proxies may be solicited
personally or by telephone, by officers and employees of the Company who will
not receive any additional compensation for their services. Proxies and proxy
material will also be distributed at the expense of the Company by broker,
nominees, custodians, and other similar parties.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Certificate of Incorporation provides that the Board of Directors
shall consist of not fewer than two directors nor more than nine directors and
that the number of directors, within such limits, shall be determined by
resolution of the Board of Directors at any meeting, approved by two-thirds of
the directors then in office. The Board of Directors currently consists of seven
directors, each serving a one-year term. At the Annual Meeting, seven directors
will be elected, each for a one-year term. The Board of Directors has nominated
for director William V. Carey, Alan Dickson, James T. Grossmann, Tony Housh, Jan
W. Laskowski, Jeffrey Peterson and Joe M. Richardson, to be elected at the
Annual Meeting.
Unless otherwise specified on the proxy, it is the intention of the
persons named in the proxy to vote the shares represented by each properly
executed proxy for the election as directors of Messrs. Carey, Dickson,
Grossmann, Housh, Laskowski, Peterson and Richardson. The Board of Directors
believes that such nominees will stand for election and will serve if elected as
directors. However, if any person nominated by the Board of Directors fails to
stand for election or is unable to accept election, the proxies will be voted
for the election of such other person or persons as the persons named in the
accompanying proxy shall determine in accordance with their best judgment.
Pursuant to the Bylaws, directors are elected by plurality vote. The Certificate
of Incorporation does not provide for cumulative voting in the election of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ITS
NOMINEES FOR DIRECTORS.
INFORMATION AS TO NOMINEES FOR DIRECTORS
NAME AGE POSITION(S)
---- --- -----------
William V. Carey............. 36 Chairman, President and Chief
Executive Officer
Jeffrey Peterson............. 50 Vice Chairman
Alan Dickson................. 65 Director
James T. Grossmann........... 60 Director
Tony Housh................... 34 Director
Jan W. Laskowski............. 44 Director
Joe M. Richardson............ 48 Director
-4-
Directors and executive officers of the Company are elected to serve until
they resign or are removed, or until their successors are elected. All directors
of the Company are elected annually at the Annual Meeting of stockholders.
Executive officers of the Company generally are appointed at the board's first
meeting after each annual meeting of stockholders.
WILLIAM V. CAREY has served as Chairman, President and Chief Executive
Officer of the Company since its inception. Mr. Carey began working for the
Company's wholly owned Polish subsidiary, Carey Agri International Poland Sp. z
o.o. ("Carey Agri") in 1990, and in 1993, Mr. Carey instituted and supervised
the direct delivery system for Carey Agri's nationwide expansion. Mr. Carey, a
1987 graduate of the University of Florida, played briefly on the professional
golf circuit before joining the Company. Mr. Carey is a member of the American
Chamber of Commerce in Poland.
JEFFREY PETERSON has served as Vice Chairman, Executive Vice President and
a Director of the Company since its inception. Mr. Peterson was a co-founder of
Carey Agri in 1990, and is a member of the management board of that entity.
Prior thereto, Mr. Peterson contracted with African, Middle Eastern, South
American and Asian governments and companies for the supply of American
agricultural exports and selected agribusiness products, such as livestock, feed
supplements and veterinary supplies. Mr. Peterson has worked with international
banks and United States government entities to facilitate support for exports
from the United States.
ALAN DICKSON began his career in the United Kingdom in banking and finance
for 10 years before joining Procter and Gamble in the European finance group.
After moving through several positions of increasing responsibility he
transferred to the Far East where he was appointed Finance Director of the Asia
Pacific Division of P&G based in Hong Kong. On his retirement from P&G, Mr.
Dickson joined Lion Nathan, a New Zealand based brewer as Chief Financial
Officer following that company's acquisition of major holdings in the Australian
beer market. In this position he was involved in upgrading the financial
expertise of that company and in establishing a major new brewery in China. Mr.
Dickson is now retired and lives in Scotland
JAMES T. GROSSMANN, a retired United States Foreign Service officer, has
served as a Director of the Company since its inception. With the United States
Agency for International Development ("U.S.A.I.D."), during the years 1977 to
1996, Mr. Grossmann served in emerging markets in Central Europe, Central
America, Africa and Asia with a concentration on developing private sector
trading and investment through United States government-sponsored aid programs.
Immediately prior to his retirement in 1996, he managed a $300 million mass
privatization and capital markets development program that assisted 14 former
state-controlled countries in Central Europe transition to market economies.
TONY HOUSH was first elected to the Board in May 23, 2000. He is a Director
at the Warsaw, Poland based investment company Millennium Capital, focusing on
capital development, strategic advisory and new technology projects. Prior to
his position with Millennium Capital, Mr. Housh was with the American Chamber of
Commerce in Poland, where he served as a government relations and investment
advisor to over three hundred U.S. companies operating in that market. Mr. Housh
previously served as a US Department of the Treasury banking and tax analyst at
the Polish Ministry of Finance, and provided advice and expertise to the Slovak
and Czech government as needed. He has extensive experience throughout the
region as a business and regulatory advisor as well as a Board member of
multinational organizations such as the Fulbright Commission. He is a double
major B.A. graduate of the University of Kansas and the University of Essex
(U.K.) in Soviet/East European Studies and Political Science.
JAN W. LASKOWSKI has served as a director of the Company since its
inception. Mr. Laskowski has lived and worked in Poland since 1991 where since
1999 he has a Consultancy and Investment Banking practice. He was the Vice
President and member of the management board of American Bank in Poland
("Amerbank") until February 1999, a position he had held since 1996, where he
was responsible for
-5-
business development. Before joining Amerbank in 1991, Mr. Laskowski worked in
London for Bank Liechtenstein (UK) Ltd from 1989 to 1991. He began his career
with Credit Suisse, also in London, where he worked for 11 years.
JOE M. RICHARDSON has served as a director of the Company since its
inception. Since October 1994, Mr. Richardson has served as the Director of
Sales and Marketing Europe of Sutter Home Winery Inc., where he is responsible
for developing and managing the importation, distribution and sales of Sutter
Home Wines within Europe. From October 1993 until October 1994, Mr. Richardson
assisted Carey Agri in marketing development. Prior thereto, Mr. Richardson had
19 years experience in the wine industry.
Each of the two representatives in the Company's initial public offering
has the right, through July 31, 2003, to designate one person for election to
the Board of Directors. Neither representative has designated a board member. In
the event that one or both of the representatives elects not to exercise this
right, then a person may be designated by each of the representatives to attend
all meetings of the Board of Directors for such period of time. Such person will
be entitled to receive all notices and other correspondence as if such person
were a member of the Board of Directors and to be reimbursed for out-of-pocket
expenses incurred in connection with attendance of meetings of the Board of
Directors.
Brean Murray and Co., Inc., one of the representatives, has not designated
a person as a member of the Board of Directors of the Company or to attend
meetings of the Board. The other representative, Fine Equities Inc., designated
William Jolly to attend board meetings.
THE BOARD AND ITS COMMITTEES
The Board held six meetings in 2000 in addition to acting by unanimous
written consent twice. Each Director attended at least 75 percent of all
meetings of the Board and committees of the Board to which he was assigned that
were held during the portion of fiscal year 2000 as to which such director was a
member of the Board or applicable committee.
The Board has two standing committees, an audit committee and a
compensation committee. The Company does not have a separate nominating
committee for recommending to stockholders candidates for positions on the
Board.
THE AUDIT COMMITTEE
The Audit Committee oversees management's fulfillment of its financial reporting
and disclosure responsibilities and its maintenance of and appropriate internal
control system. It also recommends the appointment of the Company's independent
public accountants and oversees the activities of the Company's internal audit
function. All members of the Audit Committee are non-employee directors. The
Committee's responsibilities also include reviewing (i) the scope and findings
of the annual audit, (ii) accounting policies and procedures and the Company's
financial reporting and (iii) the internal controls employed by the Company.
To insure independence, the Audit Committee also meets separately with the
Company's independent public accountants, internal auditor and other members of
management.
The Audit Committee has a charter that specifies its responsibilities and the
Committee believes it fulfills its charter. The Board of Director's, upon the
recommendation of the Audit Committee, approved a charter in response to the
Audit Committee requirements adopted by the Securities and Exchange Commission
in December 1999.
-6-
The Audit Committee met with the Company's independent public accountants four
times during 2000. These meetings were separate from full Board meetings and the
Committee discussed matters required to be discussed by SAS 61. The Audit
Committee members are Tony Housh and Jan Laskowski. The Audit Committee has
received the written disclosures and the letter from the independent public
auditors required by Independence Standards Board Standard No1. Based on its
review and discussion with the Independent public auditors, the Committee has
recommended to the Board that the audited financial statements be included in
the Company's annual report on Form 10-K. The late filers on Form 3 during the
year 2000 were William V. Carey, James Grossmann, Jan Laskowski, Jeffrey
Peterson and Joe Richardson, all for options. (See Security Ownership of
Principal Stockholders and Management).
THE COMPENSATION COMMITTEE
The Compensation Committee, which held two meetings during 2000, consists
of Joe Richardson and Jan Laskowski. The Committee's responsibilities include
(i) making recommendations to the Board on salaries, bonuses and other forms of
compensation for the Company's officers and other key management and executive
employees, (ii) administering the 1997 Stock Incentive Plan (the "Plan") and
(iii) reviewing management recommendations for grants of stock options and any
proposed plans or practices of the Company relating to compensation of its
employees and directors.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has prepared the
following report on the Company's policies with respect to the compensation of
executive officers for 2000.
The Board of Directors appointed the Compensation Committee in November
1997. Since that time, decisions on compensation of the Company's executive
officers have been made by the full Board of Directors or by the Compensation
Committee. No member of the Compensation Committee is an employee of the
Company. Prior to July 1997, there were no Board committees.
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS
The following criteria are being used to evaluate compensation policies
toward executive officers.
The compensation policies of the Company are designed to (i) attract,
motivate and retain experienced and qualified executives, (ii) increase the
overall performance of the Company, (iii) increase stockholder value, and (iv)
increase the performance of individual executives. The Compensation Committee
seeks to provide competitive salaries based upon individual performance together
with annual cash bonuses awarded based on the Company's overall performance
relative to corporate objectives, taking into account individual contributions,
teamwork and performance levels. The Compensation Committee believes that the
level of base salaries plus bonuses of executives should generally be managed to
compete in the Central European geographical area with other public and private
companies. In addition, it is the policy of the Company to grant stock options
to executives upon their commencement of employment with the Company and
annually thereafter in order to strengthen the alliance of interest between such
executives and the Company's stockholders and to give executives the opportunity
to reach the top compensation levels of the competitive market depending on the
Company's performance (as reflected in the market price of the common stock).
The following describes in more specific terms the elements of
compensation that implement the Compensation Committee's compensation policies,
with specific reference to compensation reported for 2000:
BASE SALARIES. Base salaries of executives are initially determined by
evaluating the responsibilities of the position, the experience and knowledge of
the individual, and the competitive marketplace for executive talent, including
a comparison to base salaries for comparable positions at peer
-7-
public and private companies in the Company's Central European geographic
region. Base salaries for executive officers are reviewed annually based upon,
among other things, individual performance and responsibilities.
Annual salary adjustments are recommended by the Chief Executive
Officer and the Executive Vice-President by evaluating the performance of each
executive officer after considering new responsibilities and the previous year's
performance. Individual performance ratings take into account such factors as
achievement of specific goals that are driven by the Company's strategic plan
and attainment of specific individual objectives. The factors impacting base
salary levels are not assigned specific weights but are subject to adjustments
by the Compensation Committee and the Board.
BONUSES. The Company's annual bonuses to its executive officers are
based on both corporate and individual performance, as measured by reference to
factors which reflect objective performance criteria over which management
generally has the ability to exert some degree of control. These corporate
performance factors consist of revenue and earnings targets established in the
Company's annual budget. The Compensation Committee is in the process of
formulating an annual bonus scheme to be approved and implemented in the current
year. It will reward executive officers in relation to set performance targets.
STOCK OPTIONS. A third component of executive officers' compensation is
the 1997 Plan pursuant to which the Company grants executive officers and other
key employees' options to purchase shares of common stock.
The Compensation Committee or the full Board of Directors grants stock
options to the Company's executives in order to align their interests with the
interests of the stockholders. Stock options are considered by the Compensation
Committee to be an effective long-term incentive because the executives' gains
are linked to increases in the stock value, which in turn provides stockholder
gains. The Compensation Committee generally grants options to new executive
officers and other key employees upon their commencement of employment with the
Company and annually thereafter. The options generally are granted at an
exercise price equal to the market price of the Common Stock at the date of the
grant. Options granted to executive officers typically vest over a period of one
to five years following the date of grant. The maximum option term is ten years.
The full benefit of the options is realized upon appreciation of the stock price
in future periods, thus providing an incentive to create value for the Company's
stockholders through appreciation of stock price. Management of the Company
believes that stock options have been helpful in attracting and retaining
skilled executive personnel.
Stock option grants made to newly hired executive officers and other
employees in 2000 reflect the significant individual contributions they are
expected to make to the Company's operations and implementation of the Company's
development and growth programs. During 2000, the Company granted stock options
covering a total of 47,000 shares of common stock.
Respectfully submitted,
Compensation Committee
Jan Laskowski
Joe Richardson
COMPENSATION COMMITTEE INTERLOCKS
Joe Richardson is a Director for Sutter Homes Wines Europe, which supplies
wine to the Company. See ,"Certain Transactions".
-8-
DIRECTOR COMPENSATION
Each director receives annual directors' fees of $2,000. Additionally,
Mr. Carey and Mr. Peterson annually receive $10,000 and $5,000, respectively,
for serving as Chairman and Vice-Chairman of the Board of Directors. Members of
the Board of Directors have received grants of stock options under the Plan
described below. The Company reimburses directors for out-of-pocket travel
expenditures relating to their service on the Board of Directors.
EXECUTIVE OFFICERS
The names, ages, current positions held and date from which the current
position was held of all executive officers of the Company as of April 6, 2001
are set forth below.
NAME AGE POSITION(S) POSITION SINCE
----- --- ----------- --------------
William V. Carey............... 36 Chairman, President and 1997
Chief Executive Officer
Jeffrey Peterson............... 50 Vice Chairman and
Executive Vice President 1997
Evangelos Evangelou............ 33 Chief Operating Officer 1998
Neil Crook..................... 38 Vice President and Chief Financial Officer 2000
The following sets forth the business experience, principal occupations
and employment of each of the executive officers who do not serve on the Board.
NEIL CROOK joined the Company in February 2000 as Vice President and
Chief Financial Officer. From April 1996 to January 2000, he held the position
of Financial Controller in Xerox Polska Ltd, the autonomous subsidiary of Xerox
(Europe) Ltd in Poland. Prior thereto, he worked with Continental Can Polska
where he oversaw the financial operation of the construction of an aluminum can
manufacturing plant. Mr. Crook has six years experience in Poland and is a
United Kingdom registered F.C.M.A
EVANGELOS EVANGELOU joined the Company in September 1998. From October
1993 until July 1998, Mr. Evangelou was both Assistant Manager and General
Manager of Louis Poland Sp. z o.o. where he was responsible for the day-to-day
operations of all food and beverage outlets within Warsaw International Airport.
Prior to coming to Poland for Louis, Mr. Evangelou was in food and beverage
management in the United Kingdom.
EXECUTIVE COMPENSATION
The following table shows, for the periods indicated, compensation awarded
or paid by the Company to its Chief Executive Officer (the highest compensated
employee of the Company).
-9-
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION YEAR SALARY OTHER(1)
William V. Carey 1999 $ 148,333 35,000
Chairman, President 2000 $ 165,000 35,000
(1) During 1999 and 2000, Carey Agri provided Mr. Carey with the free use of an
automobile and housing valued at $35,000.
COMPENSATION PLANS
EMPLOYMENT AGREEMENTS. Mr. Carey has entered into an employment contract
with the Company, which commenced on July 31, 1998 and ends July 30, 2001. Mr.
Carey is paid an annual base salary at the rate of $165,000 per year, $66,000
payable by Carey Agri and $99,000 by the Company. If Mr. Carey is not elected
the Chairman of the Board of Directors in accordance with the Bylaws, his base
salary paid by the Company will be increased by $10,000. Mr. Carey's base salary
is to be reviewed no less frequently than annually.
Additionally, as partial consideration for the execution of the continuing
employment agreement, the Company has granted to Mr. Carey options to purchase
34,500 shares of Common Stock at the time of the Initial Public Offering with an
exercise price of $6.50, 16,500 options with an exercise price of $6.875 granted
in 1999, and 1,500 options with an exercise price of $4.00 granted in 2000. Such
options are granted under the Plan and will vest and become exercisable on May
23, 2000. For options granted Mr. Carey because of his work on the board of
directors of the Company and Carey Agri, see "1997 Stock Incentive Plan."
Mr. Carey may terminate his employment agreement only for "good reason,"
which includes the Company's' failure to perform its obligations under the
agreement. The Company may terminate the agreement for "cause" as defined, which
includes Mr. Carey's willful refusal to follow written orders or willful
engagement in conduct materially injurious to the Company or continued failure
to perform his required duties. If the Company terminates the agreement for
cause or Mr. Carey terminates it without good reason, Mr. Carey's salary and
benefits will be paid only through the date of termination. If the Company
terminates the employment agreement other than for cause or if Mr. Carey
terminates it for good reason, the Company will pay Mr. Carey his salary and
benefits through the date of termination in a single lump sum payment and other
amounts or benefits at the time such amounts would have been due.
Pursuant to the agreement, Mr. Carey has agreed that during the term of
employment, and for a one-year period following a termination of employment, he
will not compete with the Company. The ownership by Mr. Carey of less than five
percent of the outstanding stock of any corporation listed on a national
securities exchange conducting any competitive business shall not be viewed as
competition.
Jeffrey Peterson has entered into an employment contract with the Company,
which commenced on July 31, 1998 and ends on July 30, 2001. Mr. Peterson is paid
$39,000 by the Company and $36,000 by Carey Agri for serving on the Management
Board. For options granted to Mr. Peterson as a member of the Board of Directors
of the Company and Carey Agri, see "--1997 Stock Incentive Plan."
-10-
1997 STOCK INCENTIVE PLAN
The Company's 1997 Stock Incentive Plan, as amended (the "Plan"), provides
for the grant of incentive stock options within the meaning of Section 422 of
the Code, non-qualified options, stock appreciation rights, restricted stock and
restricted stock units to directors, executives and other employees of the
Company and any of its subsidiaries or of any service provider, as defined,
whose participation in the Plan is determined to be in the best interest of the
Company. The Plan authorizes the issuance of up to 750,000 shares of Common
Stock (subject to anti-dilution adjustments in the event of a stock split,
recapitalization or similar transaction).
The Board of Directors has the full power and authority to take all actions
and to make all determinations required under the Plan, but has currently
delegated that authority to its Compensation Committee, which has the authority
to interpret the Plan and to prescribe, amend and rescind rules and regulations
relating to the Plan. The Compensation Committee's interpretations of the Plan
and its determinations pursuant to the Plan will be final and binding on all
parties claiming an interest under the Plan. The Plan was adopted by the Board
of Directors on November 27, 1997, which is the effective date of the Plan, and
approved by the Company's stockholders in December 1997. The term of the Plan is
ten years from its effective date, and no grants may be made under the Plan
after that date.
Automatic grants to purchase 1,500 shares of common stock are made to
outside directors of the Company. These grants are made upon initial election to
the board. Commencing at the upcoming annual meeting, grants to purchase 1,500
shares will be made to each independent director upon his or her reelection to
the board. Further grants for 4,500 shares will be made annually to the Chairman
of the Board and grants for 2,500 shares annually to the Vice Chairman of the
Board.
The option exercise price for incentive stock options granted under the
Plan may not be less than 100% of the fair market value of the Common Stock on
the date of grant of the option. Options may be exercised up to 10 years after
grant, except as otherwise provided in the particular option agreement. Payment
for shares purchased under the Plan shall be made in cash or cash equivalents.
With respect to any participant who owns stock possessing more than 10% of the
voting power of all classes of stock of the Company, however, the exercise price
of any incentive stock option granted must equal at least 110% of the fair
market value on the grant date and the maximum term of an incentive stock option
must not exceed five years.
The Plan also authorizes the grant of stock appreciation rights whereby the
grantee of a stock option may receive payment from the Company of an amount
equal to the excess of the fair market value of the shares of Common Stock
subject to the option surrendered over the exercise price of such shares. A
particular award agreement may permit payment by the Company either in shares of
Common Stock, cash or a combination thereof.
Options granted under the Plan are generally not transferable except that
non-qualified options may, in certain circumstances, be transferred to family
members of the grantee. If any optionee's employment with the Company or a
service provider terminates by reason of death, options will fully vest and may
be exercised within 24 months after such death. If the optionee's employment
terminates by reason of disability, options will continue to vest and shall be
exercisable to the extent vested for a period of one year after the termination
of employment. If the optionee's employment terminates for any other reason,
options not vested will terminate and vested options held by such optionee will
terminate 90 days after such termination.
The Plan also authorizes the grant of restricted stock or restricted stock
units, which are rights to receive shares of Common Stock in the future. Both
the restricted stock and restricted stock units will be subject to restrictions
and risk of forfeiture. Such restriction may include not only a period of time
of
-11-
further employment or service to the Company or Carey Agri or a service provider
but the satisfaction of individual or corporate performance objectives.
Performance objectives may include, among others, the trading price of the
shares of Common Stock, market share, sales, earnings per share and return on
equity. Unless the particular award agreement states otherwise, the holders of
restricted stock shall have the right to vote such shares of Common Stock and
the right to receive any dividends declared and paid with respect to such stock,
but the holders of restricted stock units shall have no such rights.
If the grantee's employment with the Company or Carey Agri or a service
provider terminates by reason of death, all restricted stock and restricted
stock units granted under the Plan shall fully vest. If the grantee's employment
terminates by reason of disability, the grantee's restricted stock or restricted
stock units shall continue to vest for a period of one year. If the grantee's
employment is terminated for any other reason, the restricted stock or
restricted stock units shall be forfeited.
In the event of the dissolution or liquidation of the Company or upon a
merger, consolidation or reorganization of the Company in which the Company is
not the surviving entity, or upon a sale of substantially all of the assets of
the Company or upon any transaction (including one in which the Company is the
surviving entity) approved by the Board of Directors that results in any person
or entity owning eighty percent or more of the combined voting power of all
classes of securities of the Company, outstanding restricted stock and
restricted stock units shall vest and all options become immediately
exercisable, within a stated period, unless provision is made in writing in
connection with such transaction for the continuation of the Plan or the
assumption or substitution of such options, restricted stock and restricted
stock units.
The Board of Directors may amend, suspend or terminate the Plan with
respect to the shares of Common Stock as to which grants have not been made.
However, the Company's stockholders must approve any amendment that would cause
the Plan not to comply with the Code.
OPTION GRANTS AND EXERCISES. The following table sets forth information with
respect to grants of stock options to the Company's Chief Executive Officer
during the year ended December 31, 2000.
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
POTENTIAL
REALIZED
PERCENT OF VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL
SECURITIES OPTIONS RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION
OPTIONS EMPLOYEES IN EXERCISE GRANT EXERCISE EXPIRATION FOR OPTION TERM
NAME GRANTED FISCAL YEAR PRICE DATE DATE DATE 5% 10%
---- ------- ----------- ----- ------ -------- ---------- ---- -----
WILLIAM V. CAREY 1,500 3.2% $4.00 5/23/00 May 23 2000 May 23 2010 $0 $0
The market price of the Common Stock at December 31, 2000 was lower than the
exercise price. No stock options were exercised in 2000.
-12-
CERTAIN TRANSACTIONS
The Company distributes Sutter Home wines in Poland. Mr. Richardson, a
director of the Company, is Director of Sales and Marketing Europe of Sutter
Home Winery, Inc. The total value of Sutter Home wines sold by the Company in
2000 was approximately $0.6 million.
-13-
COMPARATIVE STOCK PRICES
The following chart sets forth comparative information regarding the Company's
cumulative stockholder return on its common stock since its Initial Public
Offering completed in July 1998. Total stockholder return is measured by
dividing total dividends (assuming dividend reinvestment) plus share price
change for a period by the share price at the beginning of the measurement
period. The Company's cumulative stockholder return based on an investment of
$100 at July 28, 1998, when the common stock was first traded on the NASDAQ
market, at its closing price of $6.50 is compared to the cumulative total return
of the CRSP Total Return Index for the NASDAQ Market (US and Foreign) and the
NASDAQ Non-Financial Stocks Index, comprised of publicly traded companies which
are principally in Non-Financial business during that same period.
Comparison of the Ten Quarter periods Cumulative Total Return*
Among the Company, the NASDAQ Market
And NASDAQ Non-Financial Stocks
[GRAPH OMITTED]
-14-
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
JUN-98 SEP-98 DEC-98 MAR-99 JUN-99 SEP-99 DEC-99
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
CEDC 100 550 613 700 850 625 500
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
CRSP Total Return Index for the 100 551 715 802 878 897 1334
Nasdaq Market (US & Foreign)
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
Nasdaq Non-Financial Stocks 100 551 730 830 906 939 1427
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
MAR-00 JUN-00 SEP-00 DEC-00
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
CEDC 538 438 400 200
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
CRSP Total Return Index for the 1501 1301 1201 805
Nasdaq Market (US & Foreign)
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
Nasdaq Non-Financial Stocks 1621 1399 1278 833
----------------------------------- ------------ ---------- ---------- ------------ ---------- ---------- ----------
o $100 invested on July 28, 1998, including reinvestment of dividends.
Ten-quarter periods ending December 31, 2000.
-15-
RATIFICATION OF THE APPOINTMENT
OF THE COMPANY'S INDEPENDENT PUBLIC AUDITORS
(PROPOSAL 2)
On March 2, 1993, the Company engaged the accounting firm of Ernst &
Young Audit Sp. z o.o. as the Company's principal independent auditors.
Stockholder ratification of Proposal 2 is not required by the Bylaws or
otherwise. However, the Board of Directors is submitting Proposal 2 to the
stockholders for ratification as a matter of good corporate practice. If the
stockholders fail to ratify Proposal 2, the Board of Directors will reconsider
whether or not to retain Ernst & Young Audit Sp. z o.o. Even if Proposal 2 is
ratified, the Board of Directors in its discretion may direct the appointment of
a different independent accountant at any time during the year if the Board of
Directors determines that such a change would be in the best interests of the
Company and its stockholders.
Representatives of Ernst & Young Audit Sp. z o.o. will not be present
at the Annual Meeting.
Assuming the presence of a quorum, the affirmative vote of a majority
of the votes cast at the Annual Meeting is required to approve Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
-16-
SECURITY OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the outstanding Common Stock as of March 31, 2001: (i) by each
person who is known by the Company to beneficially own more than 5% of the
common stock; (ii) by each director and nominee for director of the Company;
(iii) by each of the executive officers of the Company; and (iv) by all
directors and executive officers of the Company as a group. All information in
this section is given on the basis of outstanding securities plus securities
deemed outstanding under Rule 13d-3 of the Securities Exchange Act of 1934, as
amended. Except as otherwise noted, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown as
beneficially owned by them.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ----------------------------------------------------------------------------------------------
William V. Carey (1) 1,187,880 27.4%
1602 Cottagewood Drive
Brandon, FL 33511
William V. Carey Stock Trust (1) 503,740 11.6%
1602 Cottagewood Drive
Brandon, FL 33511
Jeffrey Peterson (2) 623,740 14.4%
1707 Waldemere Street
Sarasota, FL 34239
Neil Crook (3) 15,000 *
Ul Cybernetyki
02-677 Warsaw
James T. Grossmann (4) 24,500 *
805 S. Fairfax Street
Alexandria, VA 22314
Jan W. Laskowski (5) 13,000 *
10/16 Marszatkowska m.6
00-102 Warsaw Poland
Joe M. Richardson (6) 11,340 *
Ul. Europejska 32A
Warsaw, Poland
Evangelos Evangelou (7) 40,200 *
Ul Fosa 37B M.45
02-768 Warsaw, Poland
- ----------------------------------------------------------------------------------------------
-17-
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ----------------------------------------------------------------------------------------------
Tony Housh (8) 6,000 *
Bracka 25
00-028 Warsaw, Poland
Alan Dickson 0 *
All Directors and Officers as a Group 1,921,660 44.4%
(nine persons)
- ---------------------------------------------------------------------------------------------
* LESS THAN 1%
(1) Includes 684,140 shares beneficially owned by Mr. Carey (52,500 shares of
common stock can be acquired upon the exercise of currently exercisable
options or within 60 days as of March 31, 2001, and 59,400 shares held of
record) and 503,740 shares held in the name of the William V. Carey Stock
Trust. . Mr. Carey is the beneficiary of the shares of the Common Stock
held in the William V. Carey Stock Trust, and he will become the sole owner
of these shares and may terminate the trust on December 11, 2005. Mr. Carey
administers the trust, which includes the power to vote the securities held
and make any investment decisions, with one other trustee, Remy Hermida,
1707 West Reynolds Street, Plant City, Florida 33567. The trust instrument
permits one trustee to delegate any and all power, duties or directions to
the other trustee, although this action has not been taken.
(2) Represents 13,500 shares of Common Stock that can be acquired upon the
exercise of currently exercisable options or within 60 days as of March 31,
2001.
(3) Represents 10,000 shares of Common Stock that can be acquired upon the
exercise of currently exercisable options and 5,000 shares held on record.
(4) Represents 23,500 shares of Common Stock that can be acquired upon the
exercise of currently exercisable options and 1,000 shares held of record.
(5) Represents 13,000 shares of Common Stock that can be acquired upon
exercising currently exercisable options.
(6) Represents 7,500 shares of Common Stock that can be acquired upon
exercising currently exercisable options and 3,840 shares held of record.
(7) Represents 39,000 shares of Common Stock that can be acquired upon
exercising currently exercisable options and 1,200 shares held on record.
(8) Represents 6,000 shares of Common Stock that can be acquired upon
exercising currently exercisable options.
-18-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers and beneficial
owners of more than 10% of the Common Stock to file with the SEC initial reports
of ownership of the Company's equity securities and to file subsequent reports
when there are changes in such ownership. Officers, directors and beneficial
owners of more than 10% of the Common Stock are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR ANNUAL MEETINGS
Any proposal or proposals by a stockholder intended to be included in
the Company's proxy statement and form of proxy relating to the 2002 annual
meeting of stockholders must be received by the Company no later than December
18, 2001, pursuant to the proxy solicitation rules of the SEC. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 2002 annual meeting of stockholders any
stockholder proposal which may be omitted from the Company's proxy materials
pursuant to applicable regulations of the SEC in effect at the time such
proposal is received.
Under the Company's Bylaws, to be timely, a stockholder's notice must
be delivered to or mailed and received at the principal executive office of the
Company not less than 60 days and not more than 90 days prior to the meeting;
provided, however, that in the event that less than 75 days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the 15th day following the day on which such notice of the
date of the annual meeting was mailed or such public disclosure was made. Since
the first notice of the Annual Meeting has been given through this Proxy
Statement, a stockholder's notice must be delivered to the Company no later than
April 21, 2001.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Company's books, of the stockholder proposing
such business, (c) the class and number of shares of the Company's stock which
are beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business.
-19-
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company does not know of any other
matters to be presented for a vote at the Annual Meeting. If, however, any other
matter should properly come before the Annual Meeting or any adjournment
thereof, the persons named in the accompanying proxy will vote such proxy in
accordance with the directions of the Board, or in the absence of such
Directors, in their own best judgment.
By Order of the Board of Directors
/s/ WILLIAM V. CAREY
--------------------
William V. Carey
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Sarasota, Florida
APRIL 6, 2001
A COPY OF THE ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED DECEMBER
31, 2000 ACCOMPANIES THIS PROXY STATEMENT. THIS REPORT IS A COMBINED REPORT WITH
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY WILL PROVIDE
COPIES OF THE EXHIBITS TO THE FORM 10-K UPON PAYMENT OF A REASONABLE FEE, UPON
RECEIPT OF A REQUEST ADDRESS TO THE CORPORATE SECRETARY, CENTRAL EUROPEAN
DISTRIBUTION CORPORATION, 1343 MAIN AVE., SUITE 301, SARASOTA, FLORIDA 34236.
THIS FEE WILL BE LIMITED TO THE COMPANY'S REASONABLE EXPENSES IN PROVIDING THE
EXHIBITS.
-20-
Please date, sign and mail you
proxy card back as soon as possible!
Annual Meeting of Stockholders
Central European Distribution Corporation
April 30, 2001
Please Detach and Mail in the Envelope Provided
A[X] Please mark your
votes as in this example.
FOR all nominees WITHOLD THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MATTERS(1)
listed at right AUTHORITY AND (2) LISTED BELOW. TO COME BEFORE THE ANNUAL MEETING.
(except as to vote for all
marked to nominees listed
. the contrary at right
below)
For Against Abstain
1. Election of [ ] [ ] Nominees: WILLIAM V. CAREY 2. To ratity the Board of Directors [ ] [ ] [ ]
seven (7) ALAN DICKSON appointment of Ernst & Young
directors, to JAMES T. GROSSMANN Audit SP. zo.o as the Company's
serve until TONY HOUSH independent public auditors for
2002 Annual JAN W. LASKOWSKI the year 2001.
Meeting of Stockholders JEFFREY K, PETERSON
FOR, except withheld from the following nominee(s): JOE M. RICHARDSON 3. To transact such other business as may properly come
_____________________________________ before the Annual Meeting of any adjournment
thereof.
This proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR the matters described in paragraphs (1) and (2) unless the
shareholder specifies otherwise, (in which case it will be voted as specified).
SIGNATURE___________DATED______, 2001 SIGNATURE _______________DATED ______,2001
NOTE; Please sign exactly as name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized partner.