-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UmZsv4KPCMBFfhJ2X2mk0FlxwWJl6ar/G+Ew2DpDLZxe+zcLcn8qrinCjzyLe3Zm pVRGssBhdZW5Agap7251PQ== 0001016843-01-000299.txt : 20010410 0001016843-01-000299.hdr.sgml : 20010410 ACCESSION NUMBER: 0001016843-01-000299 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010430 FILED AS OF DATE: 20010406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL EUROPEAN DISTRIBUTION CORP CENTRAL INDEX KEY: 0001046880 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-BEER, WINE & DISTILLED ALCOHOLIC BEVERAGES [5180] IRS NUMBER: 541865271 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-24341 FILM NUMBER: 1597462 BUSINESS ADDRESS: STREET 1: PALM TOWER BUILDING STREET 2: 1343 MAIN STREET SUITE 301 CITY: SARASOTA STATE: FL ZIP: 34236 BUSINESS PHONE: 9413301558 MAIL ADDRESS: STREET 1: PALM TOWER BUILDING STREET 2: 1343 MAIN STREET SUITE 301 CITY: SARASOTA STATE: FL ZIP: 34236 DEF 14A 1 0001.txt 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. -----END PRIVACY-ENHANCED MESSAGE-----