Exhibit (d)(xiv)
[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 fifty percent (50%) of the after tax 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 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/ David Haedicke
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Name: David Haedicke
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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2
MANAGEMENT INCENTIVE COMPENSATION
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Provision Agreement
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Participants Management Group other than Vincent Wolfington and Don
Dailey.
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Effective Date Closing of Merger.
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Annual Bonus Participants will participate in the Company's 2% EBITDA
Bonus Pool Plan along with Mr. Wolfington, at such levels as
are determined by Messrs. Berman and Wolfington.
"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 and Ford or any of its affiliates
thereafter.
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Equity Incentives The Company will establish a stock option plan which will
reserve 10% of the Company's stock for grant thereunder.
Fifty-percent (50%) of the option pool will vest 25% per
year for 4 years following grant. The remaining 50% of the
option pool will vest if the net internal rate of return
("IRR") realized by the Investors on its total investment in
the Company after dilution from options on shares held by
the Company's management) is 28% or more on the closing date
or such other time as the Investors receive cash payments
for its interests in the Company (the "Performance
Options"). If the IRR is 25%, but less than 26%, 25% of the
Performance Options shall vest, if the IRR is 26%, but less
than 27%, 50% of the Performance Options shall vest and if
the IRR is 27%, but less than 28%, 75% of the Performance
Options shall vest.
Each Participant will rollover at least 50% of the after-
tax spread on his or her stock options held in CI for a
common equity interest in VIP in accordance with the Letter
Agreement from each Participant to Aluwill Acquisition
Corp., dated July 18, 2000.
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IN WITNESS WHEREOF, the undersigned agree on this 19/th/ day of July,
2000, to negotiate in good faith to provide the benefits set forth herein to
the Participants by the Effective Date.
COMPANY
By: /s/ Vincent Wolfington
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Vincent Wolfington