Exhibit (d)(xi)
[LETTERHEAD OF TSUMURA INTERNATIONAL INC]
July 19, 2000
Aluwill Acquisition Corp.
c/o Chartwell Investments II LLC
717 Fifth Avenue
23rd Floor
New York, New York 10022
Gentlemen:
Reference is made to the Agreement and Plan of Merger dated as of July 19,
2000 (the "Merger Agreement") among Carey International, Inc., a Delaware
corporation (the "Company"), Limousine Holdings, LLC, a Delaware limited
liability company ("Parent"), Aluwill Acquisition Corp., a Delaware corporation
and a wholly-owned subsidiary of Parent ("Acquisition Company"), and Eranja
Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
Acquisition Company ("Acquisition Company Sub"). Capitalized terms used herein
but not otherwise defined herein shall have the meanings set forth in the Merger
Agreement.
The undersigned (the "Optionee"), being a holder of certain stock options
to purchase Shares (the "Options") of the Company pursuant to the one or more of
the Company's 1987 Stock Option Plan, 1992 Stock Option Plan, 1997 Equity
Incentive Plan, and 1998 Non Qualified Stock Option Plan (collectively, the
"Plans"), acknowledges that:
(a) pursuant to Section 3.4(b) of the Merger Agreement, upon the
Effective Time, each Option that has not been previously exercised shall be
cancelled and, in exchange therefor, the Optionee will receive an amount in cash
in respect of each Option equal to the excess, if any, of the Offer Price
(currently $18.25) over the per Share exercise price thereof (such payment to be
net of applicable withholding taxes); and
(b) pursuant to Section 3.1(a) of the Merger Agreement, if an Option
is validly exercised in accordance with the Plans, and the Shares received upon
such exercise are validly tendered in accordance with the Merger Agreement or
converted upon consummation of the Merger, each such Share will be converted
into the right to receive, in cash, the Offer Price (currently $18.25).
In connection with the foregoing, and in order to facilitate the
consummation of the transactions contemplated in the Merger Agreement, the
Optionee agrees to exercise the Options (including incentive stock options) in
accordance with the Plans immediately prior to the Merger. The Optionee will be
permitted to exercise the Options with the use of notes as set forth in and in
accordance with the terms of the Option Exercise/Cancellation Agreement,
substantially in the form attached hereto, which the undersigned agrees to
execute upon request of the Company. If requested by Acquisition Company in
order to accomplish the Short Form Merger, the Optionee agrees to sell the
Shares acquired upon exercise of the Options to Acquisition Company (or its
designee) at the Offer Price. The Optionee also agrees to vote all Shares owned
by Optionee in favor of the Merger.
In addition, the Optionee agrees to rollover Shares having a value of not
less than the gross proceeds from the exercise of the Options into Surviving
Corporation Common Shares at the Offer Price. The Optionee shall enter into a
definitive stock subscription agreement in connection therewith. The Optionee
also agrees to rollover all Shares presently owned by him. The Optionee shall
receive with regard to his rolled over Shares standard shareholder rights and
shall be subject to standard shareholder obligations customarily provided in
similar transactions (e.g., calls, puts upon termination of employment other
than for "Cause" or without "Good Reason", rights of first refusal, drag-along
rights, and registration rights (subject to lock-up)), in all cases, subject to
financing and recap accounting restrictions; such rights to be set forth in
documentation reasonably satisfactory to the Optionee. The Shares and Options
listed as being held by the Optionee on Schedule 3.1(b) to the Merger Agreement
are the Shares and Options referred to herein and shall be subject to this
Agreement. Share valuation for put and call exercises will be made by the Board
of Directors, subject to the Optionee's right to request an independent
appraisal. Optionees will be permitted to transfer Shares to other rollover
Optionees.
Anticipated future management compensation is set forth on the attached
"Management Incentive Compensation" Term Sheet.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof. This Agreement
may not be amended, modified or supplemented without the written consent of the
Optionee and Acquisition Company. This Agreement shall become effective upon
such time, if any, as the Merger Agreement shall be executed and delivered by
the parties thereto and shall terminate upon the termination of the Merger
Agreement.
Very truly yours,
/s/ Vincent A. Wolfington
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Name: Vincent A. Wolfington
ACKNOWLEDGED AND AGREED TO:
ALUWILL ACQUISITION CORP.
By: /s/ Todd Berman
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Name: Todd Berman
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Title: President
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Dated: 7/19/00
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EMPLOYMENT AGREEMENT TERMS
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Provision Agreement
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Executive Vincent A. Wolfington
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Effective Date Closing of Merger, except as otherwise provided below.
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Term Four (4) years, automatically renewed for additional one (1)
year periods upon the fourth (4th) anniversary of the
Effective Date and each anniversary thereafter, unless
either party provides one hundred twenty (120) days advance
written notice of non-renewal.
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Position, Reports Chairman of the Board and CEO. Report solely and directly to
and Duties the Board. Executive shall have those powers and duties
normally associated with his position.
Executive shall be permitted to appoint one member of the
Board (in addition to himself).
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Place of Company's principal executive offices in Washington, D.C.
Performance
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Base Salary $500,000 per year.
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Annual Bonus Will participate in the Company's 2% EBITDA Bonus Pool Plan;
provided, that, Executive shall be entitled to a minimum
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bonus to be mutually agreed upon.
"EBITDA" shall be calculated in accordance with generally
accepted accounting principles, excluding extraordinary and
nonrecurring items, as well as fees, expenses and
commissions payable in connection with the Merger or fees
paid to Chartwell or Ford or any of their affiliates
thereafter.
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Equity Incentives Will be granted a stock option to acquire 6% of the Company
on the Effective Date with an exercise price per share equal
to the fair market value per share of the underlying stock
on the Effective Date. The option will vest 33-1/3% on the
date of grant and as to an additional 22.2% on each of the
first, second and third anniversaries of the Effective Date.
Options will vest upon termination of employment by the
Company without, Cause, for disability or due to death,
termination of employment by Executive for Good Reason or
upon a Liquidity Event (e.g., an IPO, sale of all or
substantially all of the assets of the Company or a sale
of all or substantially all of the common stock of the
Company). In addition, the Company will maintain adequate
life insurance for the benefit of Executive to pay the
aggregate exercise price of the option in the event of his
death.
Executive will rollover his current equity ownership in CI
for a common equity interest in VIP in accordance with the
Letter Agreement from you to Aluwill Acquisition Corp.,
dated July 18, 2000.
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Loan Company will make a $4,000,000 non-recourse loan available
to Executive which shall be secured by Executive's equity in
the Company on a dollar for dollar basis (i.e., the loan
will initially be secured with $4,000,000 of stock in VIP
which will be adjusted downward as the value of the stock
increases, but not upwards if the value of the stock
decreases (based on a value of the Company of 6 X EBITDA)).
The loan shall bear interest equal to the cost of funds in
the Term Loans which
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shall accrue annually, but shall not be paid until the Loan
matures. The Loan shall mature on the earlier of (i) the end
of the lock-up period following an IPO when Executive can
freely sell his shares (ii) a sale of all or substantially
all of the assets of the Company or a sale of all or
substantially all of the common stock of the Company, or
(iii) a termination of employment by the Company for Cause.
The Loan may be prepaid without penalty at anytime.
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Benefits and Same as he is currently receiving from CI or as may be added
Perquisites from time to time.
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Termination - Company shall pay Executive his accrued, but unpaid Base
Cause or by Salary, through the date of termination, as soon as
Executive without practicable following the date of termination.
Good Reason
In general, "Cause" and "Good Reason" shall have the same
meaning as provided in Executive's Employment Agreement (as
defined below); provided, that, Good Reason shall include a
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Change in Control of the Company.
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Termination - Same as current Employment Agreement.
Disability.
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Termination - Company shall pay in a lump sum to Executive's beneficiary
Death an amount equal to the remaining Base Salary that would have
been paid to Executive had he remained employed through the
current Term.
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Termination Company shall (A) continue to pay Base Salary for the
Without Cause or remaining current Term and (B) continued health benefits for
for Good Reason the remaining current Term; provided, that, in the event of
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(A) or (B), such period is no less than three (3) years.
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Termination - Company shall continue to pay Executive his Base Salary for
Failure to re-new two (2) years following his termination of employment.
by the Company
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Non-compete In consideration of Executive's continued employment with
Covenant the Company, during the employment period and for three (3)
years following termination of employment for any reason
(two (2) years in the event his employment terminates due to
a failure of the Company to renew the Term) (the "Restricted
Period"), Executive may not directly or indirectly compete
with the Company without the Company's prior written
consent.
Confidentiality During the Term and following termination of employment,
Covenant Executive shall not disclose any confidential information or
trade secrets without the Company's written consent (other
than such information which becomes public knowledge by
means other than Executive's breach of this provision or as
otherwise may be required by legal process) and he shall
return of all Company property upon termination of
employment.
Nonsolicitation During the Restricted Period, Executive will not attempt to
solicit any employee or customer or client of the Company.
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Legal Fees Executive shall be reimbursed for all reasonable legal and
accounting fees incurred in the preparation and negotiation
of the new employment agreement up to an amount not to
exceed $30,000. In the event of any dispute under the
Agreement, each party shall pay its own legal fees
regardless of outcome.
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Entire Agreement Upon execution of a definitive employment agreement, all
prior agreements and understandings shall be superceded
including, without limitation, the Employment Agreement, by
and between CI and Executive, dated as of May 12, 2000 a
copy of which in its current form has been provided to
counsel for Chartwell (the "Employment Agreement");
provided, that, Executive shall still be entitled to the
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payment under Section 6 of the Employment Agreement, as
amended, in accordance with the terms and conditions
thereof. In addition, unless otherwise specifically provided
for in this Term Sheet, any other rights or benefits to
which Executive may be entitled to under the Employment
Agreement shall be incorporated into the new employment
agreement (other than Section 6 of the Employment Agreement
relating to the payment of $1,250,000 on a Change in
Control).
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Governing Law Delaware.
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IN WITNESS WHEREOF, the undersigned agree on this 19th day of July,
2000, to negotiate in good faith to enter into a definitive employment agreement
with terms and conditions which are consistent with the terms and conditions set
forth above by the Effective Date.
COMPANY
By: /s/ Vincent A. Wolfington
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Vincent A. Wolfington
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